Successful judicial review for financial advisors

Successful judicial review for financial advisors

Colman Coyle were recently instructed by a firm of independent financial advisors to challenge a final decision issued by the Financial Ombudsman Service (“the FOS”).

The complaint brought before the FOS concerned the setting up of a Self-Invested-Personal Pension by the firm to facilitate the transfer of some of their client’s personal pension plans into an overseas Caribbean complex on an insistent client basis.

The overseas scheme since fell into trouble and the client complained to the FOS that the firm should compensate him for his loss.

The complaint alleged serious failings on the part of the firm all of which the firm strenuously denied. Despite this the FOS upheld the complaint and the firm was ordered to compensate their client the value of his loss.

Unlike a Court, a determination made by the FOS does not need to be in accordance with the law of England provided its “fair and reasonable” and the FOS now has the power to make awards up to £350,000 for complaints which took place on or after 1st April 2019. These awards are then enforceable as if a Court Judgment.

This decision had serious implications for the advisors.

The firm approached Adam Palmer to take the case on. Mr Palmer engaged with the FOS and requested that it quash its final decision. It soon became clear, however, that the FOS would not quash its decision so judicial review proceedings were commenced in the High Court.

Despite the FOS initially refusing to quash its decision, soon after the proceedings were served the FOS indicated that it did not intend to contest the claim.

The decision was subsequently quashed and after reconsidering the complaint we are pleased to say the FOS has not upheld it.

If you are considering a judicial review of a decision issued by the FOS it is important that you act quickly because the claim must be filed ‘promptly’ and in any event not later than three months of the final decision having been made.

If you have a dispute with a financial advisor and require advice or you are a financial advisor requiring advice about a complaint brought by a client please contact Adam Palmer on 0207 704 3418 or enquiries@colmancoyle.com for information on how we can assist.

Adam Palmer

Adam Palmer

Solicitor

Coronavirus Act 2020 – Business Tenancies

Coronavirus Act 2020 – Business Tenancies

The government have now enacted provisions to prevent forfeiture claims being brought against businesses as a result of the crisis.

From the 26 March 2020 to 30 June 2020 (the “relevant period”), a landlord’s right of re-entry or forfeiture arising from non-payment of rent cannot be enforced. The relevant period can be extended beyond 30 June 2020 by the Secretary of State.

Conversely, during the relevant period, a landlord cannot be said to have waived his or her right of re-entry or forfeiture, unless it is done expressly in writing.

The result of these provisions is that from 26 March 2020 until 30 June 2020, no order for possession can be enforced and any order for possession made during that period must take effect after 30 June 2020.

During the relevant period, businesses affected by the crisis may be unable to pay their rent. Previously, under the Landlord and Tenant Act 1954, landlords could oppose the grant of a new lease protected by that Act by asserting the ground under section 30(1)(b) i.e. that there has been a  persistent delay in paying rent which has become due. The Coronavirus Act provides that any failure to pay rent during the relevant period is to be disregarded under the Landlord and Tenant Act 1954.

While the proposals grant tenants welcome protection during these difficult times, it does leave landlords with mounting rent arrears which may affect their ability to pay their own mortgages and outgoings. The Government has said that a mortgage holiday will be provided by lenders and the Financial Conduct Authority has produced guidance on this issue.

Coronavirus Act 2020 – Residential Tenancies

Coronavirus Act 2020 – Residential Tenancies

On 18th March 2020, the Government issued a press release stating that emergency legislation would be introduced to “suspend new evictions from social or private rented accommodation while this national emergency is taking place” and “no new possession proceedings through applications to the court to start during the crisis”.

The Coronavirus Act (“the Act”) entered into force on 25 March 2020. The Act refers to a relevant period within which these provisions will apply. That period is defined as beginning on 26 March 2020 and ending on 30 September 2020.

The Act applies to a variety of tenancies: Protected and Statutory; Secured; Flexible; Assured; Assured Shorthold; Introductory; and Demoted. For all these the Act extends the notice period for commencing possession proceedings to three months.

The three-month notice period can be extended to up to six months, but not above six months. This period can be changed multiple times.

A possible issue with this variation is that if the notice period is changed to six months, there is no provision for varying notices already served using the three-month period. It seems likely that such a notice would still be valid. In that case, proceedings would commence at the end of the three-month period but would still be within the now six-month notice period.

During the three-month notice period, any rent arrears that accrue can still be used as grounds for possession proceedings once the relevant period comes to an end. The Act merely changes when these proceedings can take place. Tenants who have lost their income due to the crisis will still be the subject of a possession claim.

This is particularly notable as the Act provides a solution to this issue for business tenancies. For the purposes of making out the ground of persistent delay in paying rent which has become due under the Landlord and Tenant Act 1954, any failure to pay rent during the relevant period is to be disregarded.

On top of this, the Act makes no provision for notices validly served prior to the passage of the Act. A notice validly served prior to the Act becoming law will be valid and will lead to new proceedings during the relevant period. Some of which, no doubt, will have been caused by the Coronavirus crisis. This is, of course, subject to Courts being able to hear such claims.

Ozone’s spectacular Emma Street opening!

Ozone’s spectacular Emma Street opening!

Harry Dronfield, Nathalie White and Adam Palmer attended the opening of Ozone Coffee’s Emma Street, Bethnal Green roasting house and eatery on Wednesday 9th October 2019.

It was a really enjoyable event, with tasty coffee-based cocktails, excellent craft beer and delicious food.  We toured the roasting facilities and were shown how the coffee beans are prepared and roasted.

Thank you to Ozone for inviting us and hats off for creating an impressive space to enjoy great coffee and food!

Ozone photo

Proposed reforms to enfranchisement: better deals for leaseholders?

Proposed reforms to enfranchisement: better deals for leaseholders?

As a lead member of the Association of Leasehold Enfranchisement Practitioners (ALEP) Colman Coyle has been invited to attend a discussion on the reforms recently proposed by the Law Commission which aims to provide better deals for leaseholders who want to purchase their freehold or to extend the lease of their home.

The consultation paper stretches to over 500 pages and proposes a new regime which no longer turns on the distinction between houses and flats but instead proposes the following rights:

  • A universal right to a lease extension which is available to all leaseholders, whether they own a house or flat;
  • A right for leaseholders to acquire the freehold of a building individually, or of a building or estate collectively; and
  • A new right for leaseholders who did not participate in a previous collective freehold acquisition to do so at a later date

If you are a leaseholder or a landlord and require any advice about your rights and or obligations you should contact Mr Adam Palmer on +44(0)20 7354 3000 or adam.palmer@colmancoyle.com.

Adam Palmer

Adam Palmer

Solicitor

Success for the Crown Estate Commissioners

Success for the Crown Estate Commissioners

The judgment recently handed down by the Court of Appeal in Whitehall Court London Limited v The Crown Estate Commissioners will be of interest to anyone in the field of leasehold enfranchisement because it provides, amongst other things, clarity as to the extent of the valuation provisions in the Leasehold Reform, Housing and Urban Development Act 1993 (“the Act”).

In this particular case the valuation process for a lease extension was complicated because the headlease required payment of a rent to the freeholder worked out as a percentage of the headlessee’s total income from the block above a certain fixed sum.

The rents on all unextended leases of flats in the building doubled in 2029 taking the total income above the fixed sum.

When valuing the loss in value to the freehold and headlease respectively resulting from the grant of a new lease of the subject flat, the valuers needed to know if they were to treat as certain that the rents of all the other flats would double in 2029, or should allow for potentially diminishing rents due to future lease extensions under the Act.

The Court of Appeal therefore had to decide the extent of the no-Act assumption.

Deciding the issue in the freeholders favour the Court held that the “no-Act” assumption on lease extensions extends not only to the flat but the block containing the flat.

The Court also considered whether the headlessee had to include payments received from transactions entered into in breach of covenant when accounting for income received.

Giving the lead judgment Lord Justice Floyd answered this issue in the affirmative. The Court held that the parties would have understood that, where a breach of covenant occurred, the freeholder could waive the breach, thereby making the transaction lawful.

Adam Palmer

Adam Palmer

Solicitor

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