Home income plans were sold to many hundreds of elderly investors in the late 1980s as a means of boosting their income by releasing the capital tied up in their houses. The plans left many investors facing the loss of their homes.
In a judicial review, Lord Justice Mann and Mr Justice Tuckey decided it was unjust of the ICS to disallow claims arising from investors who had died. The claim could be passed on to the investors' representatives.
However, the judges decided the ICS was entitled to refuse awards for damages to cover distress and anxiety suffered or to recompense investors for money they spent when they believed their home and their finances were secure.
The ruling means the amount of compensation a home income plan investor will receive still depends upon which body considers the claim. The Insurance Ombudsman Bureau, which can adjudicate for investors who dealt with the tied agents of insurance companies, offers more generous compensation than the ICS.
Richard Barnett, the solicitor whose firm, Barnett Sampson, sought the judicial review, said he would consider an appeal. 'It is very unfortunate that the investor has entered a lottery. If his adviser happened to be tied to a particular insurance company . . . the ombudsman may well make an award for distress and for monies spent which are not recoverable from the ICS.'
An ICS spokeswoman said this was not a fair comparison. The ombudsman operates a voluntary arbitration system for the insurance companies, while the ICS makes awards to investors who dealt with financial advisers whose firms have since failed.
The ICS has so far paid out pounds 4.8m to 286 home income plan investors.Reuse content