Imperial investors in landmark advice win

Insurer and adviser ordered to pay £500,000 to couple in ruling that could open the floodgates after collapse of finance firm
Click to follow
The Independent Online

Zurich Financial Services and an independent financial adviser (IFA) are to pay substantial damages after a farming couple from Wiltshire won a landmark decision in the High Court on Friday. The couple had lost their savings in one of the most notorious UK investment scandals of recent years.

Zurich Financial Services and an independent financial adviser (IFA) are to pay substantial damages after a farming couple from Wiltshire won a landmark decision in the High Court on Friday. The couple had lost their savings in one of the most notorious UK investment scandals of recent years.

Edward and Pauline Seymour invested £500,000 with the Lincolnshire-based Imperial Consolidated Group on the advice of their IFA. Imperial then went into liquidation in 2002 owing £200m to investors. The Serious Fraud Office (SFO) is investigating its collapse.

A High Court judge ruled that Mr and Mrs Seymour had won their case against their former financial adviser and family friend, Caroline Ockwell. Mark Havelock-Allen QC ordered Ms Ockwell to pay the full amount in compensation to the Seymours. But he also ruled that Zurich, due to its "contrib- utory negligence" to her poor advice, would have to provide Ms Ockwell with two-thirds of the half a million pounds plus lost income and legal costs.

Mr Seymour said after the judgment: "Everyone round here is smiling so it looks like good news, although it will take time to sink in. I just hope the rest of the people get their money back."

The couple's lawyer, James Taylor, at Bristol-based Bevans, said: "Anyone who has lost money in the Imperial fiasco should take professional advice on recovering money from a financial adviser or financial services provider."

Ms Ockwell, a well-known accountant and IFA in the Swindon area, had recommended in 2000 that the couple invest in Alpha Plus, an offshore collective investment scheme run by Imperial.

But her defence to the Seymours' claim of professional negligence was in turn to sue Zurich IFA, a subsidiary of Zurich.

She claimed she had only recommended the so-called guaranteed product, offering returns of 15 per cent per year, because the insurer had said it had checked the product and said it was suitable for extremely low-risk investors.

The judge ruled that the Zurich group's negligence and omission of important information was partly responsible for Ms Ockwell breaching her duty of care to the Seymours.

A Zurich spokesman said: "We are both disappointed and surprised at the judgment in this case. We will obviously study the detail of the judgment carefully to decide whether we will take the matter further."

Ms Ockwell was unavailable for comment.

The case has removed a key legal defence used by financial services providers - that they do not provide advice and so cannot be held liable for claims after investors have lost money though an IFA's recommendations. The case will open the legal floodgates to a number of other claims as dozens of IFAs and around 14 life assurers have been affected by the collapse of Imperial.

The SFO's investigation has been inching slowly forwards. The former chief executive of Imperial was arrested last month and held for questioning.

Bill Godley, 57, is the seventh former Imperial insider to have been arrested by the SFO in the UK over the past 14 months. Mr Godley, a South African national who is believed to reside in Portugal and South Africa, was picked up by detectives in London. He was later released.

Comments