A High Court judge has ruled against a UK financial planning firm’s bid to have a negligence claim tossed out, which was brought by former Premier League football players over a failed film tax relief scheme.
Judge Christopher Nugee dismissed the claims from advice firm Carpenter Rees that the investors, which include ex-footballers Andy Cole, Robbie Savage and Danny Murphy, waited too long to file the law suit.
On 30 April 2020, he denied the summary judgment application filed by the business because it had not proven the investors knew as far back as 2012 that they were losing money as a result of the tax schemes but waited until outside a three-year statute of limitations to bring their claims to court.
The judge said he was persuaded by the footballers’ legal team “that there is a reasonable prospect of the claimants establishing that they did not have the requisite constructive knowledge”, as a result of the letters they were sent in 2012 by companies that promoted the schemes.
“That is sufficient to mean that the application for summary judgment fails,” the judge said in his ruling.
Details
According to court filing; the investors, made up of mostly former English football stars, put their money into film schemes promoted by investment firm Scion and other similarly named corporate entities between 2005 and 2007.
They were persuaded to invest in the Scion Premier film finance schemes, which were promoted as tax efficient, by their IFAs.
These IFAs worked for now-defunct Formation Asset Management, called at the time Kingsbridge Asset Management, which had a particular focus on clients in professional sports.
Between 2005 and 2007, Formation/Kingsbridge were the authorised representatives of IFA firm Carpenter Rees and it is on this legal basis that the footballers’ claims are being made against the business.
Their law suit in 2015 states that they were financially disadvantaged as a result of the advice provided by Formation, and Carpenter Rees was responsible for its actions as an appointed representative.
In December 2019, four of the footballers failed in a bid to pursue two banks which approved loans, ranging between £175,000 and £1.1m, enabling them to invest in the film scheme.
But the judge in that case ruled that they had little chance of success.
Letters
Some of the investors said they did not receive letters during the assumed time period, and those who did said they did not contain enough information to take expert advice.
The judgment said that this meant their “date of knowledge” of the scheme’s failings was less than three years before they filed suit.
In his ruling on 30 April 2020, judge Nugee found in favour of the footballers on all points.
He said: “CRL has not established that there is no reasonable prospect of success on the claims against it, and I will dismiss the application for summary judgment.
“For reasons already given, that means that I will also dismiss the application to strike the claims out.”
Seek financial redress
Jonathan Tickner, partner at Peters & Peters Solicitors, the law firm representing the investors, said: “The decision of Mr Justice Nugee is welcomed as the court held in favour of the claimants on all issues.
“The claimants now welcome the opportunity to advance the claims to trial to vindicate their interests and seek financial redress”.
International Adviser has contacted financial planning firm Carpenter Rees and DAC Beachcroft, the law firm defending the company, for a comment.
