The claimant had on her mortgage adviser’s advice charged her existing property to purchase property in Spain. After the investment failed, she lost the house. On the financial failure of the adviser without being insred, she claimed against the Compensation scheme, but now complained that the claim had been dealt with on the wrong basis, and not as a failure of mortgage advice.
Held: The principles applicable to the assessment of compensation were straightforward: FSCS had a broad discretion to pay compensation to claimants with valid claims to the extent that it considered that essential in order to provide fair compensation; it had a discretion to decide which elements of the claim should be accepted in order to achieve that; in this context fair compensation meant compensation which fairly compensated for the loss caused by the particular breach of duty; fair compensation for negligent or bad advice required that the claimant be restored as far as possible to the position she would have been in if the advice had not been given.
FSCS had failed to apply those principles properly because it had considered that Ms Emptage’s claim related to advice in connection with an unregulated activity, namely investment in property, and because it had approached her claim as having both protected and unprotected elements and had failed to view Mr Sharratt’s negligent advice as an indivisible package which included investment advice as an essential element, given that the mortgage was not feasible without it.
Judges:
Haddon-Cave J
Citations:
[2012] EWHC 2708 (Admin)
Links:
Citing:
Cited – Regina v Investors Compensation Scheme Ltd, ex Parte Bowden and Another HL 18-Jul-1995
A regulated firm, Fisher Prew-Smith, ran a scheme whereby elderly homeowners were persuaded to invest money in equity-linked funds by mortgaging their homes on terms that the interest would roll up unless and until the total mortgage debt reached a . .
Cited by:
Appeal from – Emptage v Financial Services Compensation Scheme Ltd CA 18-Jun-2013
The claimants had acted on mortgage advice given by a company regulated by the FSA, as a result of which, on the collapse of the property market in Spain, they had lost their investment and their home which had been charged to assist in the purchase . .
Lists of cited by and citing cases may be incomplete.
Financial Services, Negligence
Updated: 05 November 2022; Ref: scu.464962
