Act now on mis-sold endowments: new article

The_Eye_Of_Sauron

Sorry for boring everyone, but these are the relevant statutory provisions

Overriding time limit for negligence actions not involving personal injuries.


14B. — (1) An action for damages for negligence, other than one to which section 11 of this Act applies, shall not be brought after the expiration of fifteen years from the date (or, if more than one, from the last of the dates) on which there occurred any act or omission—

(a) which is alleged to constitute negligence; and

(b) to which the damage in respect of which damages are claimed is alleged to be attributable (in whole or in part).


(2) This section bars the right of action in a case to which subsection (1) above applies notwithstanding that—

(a) the cause of action has not yet accrued; or

(b) where section 14A of this Act applies to the action, the date which is for the purposes of that section the starting date for reckoning the period mentioned in subsection (4)(b) of that section has not yet occurred;


before the end of the period of limitation prescribed by this section."

(You can ignore refs to section 11- they relate to injury claims)

References to section 14A refer to 3 year 'date of knowledge' cases, meaning 3 years from when you realised (or should have realised) that you had a claim; fine and dandy if that 3 year period can run and you are still within your 15 years. If not- stuffed. Can't imagine anyone, unless they are mental patients (which stops time running under the Latent Damage Act) being able to get back in time where an endowment was sold pre December 1992 (and running)

dreamylittledream

The_Eye_Of_Sauron wrote: »

In fact, so low that it's non-existent. Over 15 years ago, the Latent Damage Act applies (you can't bring a claim for negligence against eg a solicitor or an accountant or other types of professional advisor more than 15 years from the act or omission complained of).

So basically, if someone was sold an endowment by such a person before (as at today) 20th December 1992, they are out of time.

And endowment complaint is not treated as a negligance claim by the Legal Complaints Service but a complaint for Inadequete Professional Service, under the Solicitors Investment Business Rules.

Equally a complaint about the suitability of advice is also not treated as a negligance complaint by the FOS, and as such IFA's can not invoke the 15 year long stop in the regulated complaints process.

Therefore any reference made to the latent damage/limitations act in a solicitors response can be safely ignored if you are pursuing a complaint on a non contentious basis (i.e not through court).

However the LCS only have jurisdiction over investment complaints for solicitors for policies sold after 01/04/1991 (this is 'A day' for solicitors effectively). If your policy was sold prior to this point, you can not use the Legal Complaints Service is you are unhappy with the solicitors response.

I am assuming here of course this is an English solicitor, if its a Scottish one, the Law Society of Scotland never held any power to make awards for Inadequete Professional Service, and thus all policies sold pre FSA regulation in 2001 are effectively out of jurisdiction to the complaints system.

So the long and short of the matter is the OP is very unlikely to have any luck pursuing the matter with the solicitor, as there are no referral rights to the firms regulator.

Any claim in court would probably have to be on a negligance basis and as such could be 'timebarred' under the 15 year long stop...

The_Eye_Of_Sauron

Fair point about the inadequate professional services, yes I agree for policies sold after 1-4-91. In this particular case it was 1988, so the only remedy could have been Court proceedings, and that door closed in 2003 (15 years from 1988).

However, there are clear indications that if a solicitor is brought to book via the Legal Complaints Service in respect of something that he could not be sued in Court upon (eg an endowment sale in 1991), the Law Society will be looking for a test case to take to the Court Of Appeal on the basis that a system of professional regulation which allows claims to be made via the LCS after 15 years, is unlawful on the grounds of public policy ie that it effectively overrides the Latent Damage Act. Secondly, that there are Human Rights aspects about allowing claims arising out of advice given over 15 years ago in through the back door. The insurance industry will also be taking a keen interest- they set premiums for professional advisors on the basis that after 15 years, claims are barred.

There is an eminent QC's advice floating around on the net somewhere, which says that if the Law Society challenged this on behalf of solicitors, they would be very likely to succeed, and the only thing which could then be done would be for the Latent Damage Act to be amended in Parliament, and of course Parliament is notoriously loath to legislate with retrospective effect.

If the Law Society do this, then a lot of other professional bodies eg accountants, surveyors, IFAs will probably piggyback on the test case. Probably the life companies wouldn't as of course they are not insured against endowment claims- they meet them themselves out of their profits.

The watchword, regardless of who sold your endowment, is to act quickly if you are running up against a 15 year time limit, so as to keep your options open.

mayb_2

I hope I followed all of that - thanks it was very interesting. It actually does break your heart when you consider that it is possible under a law, for that law to bar anyone from a just complaint about poor advice which has cost them dearly. In many cases there will be someone who has benefited throughout its life from commission for that sale - but can't be held to account.

Do you think they will also bring in a law that, when accused of theft or of defrauding someone out of their money, if you have got away with it for 15 years they can't touch you under the law? How about tax evasion is there a 15 year rule on that one I wonder?

Why does the government always work so hard to protect the financial institutions from the results of their own actions? Isn't the FSA doing the job quite well for them, withthout having to bring in these rules?

The current financial muddle - which has yet to reach its peak - came as a direct result of lending money to people who couldn't afford to pay it back, whether it be mortgages at 5 or 7 times income, subprime mortgages or vast amounts of credit on cards. The brakes are on now but its far too late and the people without financial accumen will be the ones to carry the brunt, not the companies whose policies these were and who knew they were guilty of not giving the best advice to the consumer.

sheilavw

thank you for all your replies. I will keep you posted . I have now decided to have a go at a letter for my sister and partner. They took out an endowment in 1992 and like me were told that they would have money left. Due to poor performance and worries about short fall letters they were getting they cashed it in and changed to a repayment, paying 10k off which they had just inherited. The endowment was with N and P now Abbey, who they still have a fixed rate repayment with. Address at time was 2 Roughler st York. Does anyone know if still same and what Abbey are like paying up?

The_Eye_Of_Sauron

Mayb

There is no statute of limitations in respect of criminal behaviour (eg fraud, tax evasion- as contrasted with legitimate tax avoidance)- as opposed to civil liability. The true killer of Lesley Moleseed was convicted on the basis of DNA evidence from 30 odd years ago recently. Just a shame that Stefan Klitsko served about 15 years inside for her murder before Rough Justice secured his release, and he died before they found the real murderer.

The 15 year rule doesn't just apply to endowment sales. If you sold a house 15 years ago with asbestos in the roof which you didn't know about- would it be fair if after 16 years the bloke you sold it to came knocking on your door asking for reimbursement of a £20k bill for resolving the asbestos problem? That is the basis of the Latent Damage Act.

The problem with endowments is that these were, in the main, 25 year products, and the Latent Damage Act wasn't designed with them in mind, but its provisions allow professionals to plead a limitation defence.

mayb_2

I understand what you are saying here and you see this sort of thing all the time. Thing is we consumers do not have a great big FSA looking after our interests and the financial companies are being allowed to get away with too much - hence current problems with subprime and all that jazz. If I had someone chasing me for compensation on their asbestos roof I would, under the same law, be able to chase the person who sold it to me I presume - all the way back to the builder - who would then probabaly be covered by some law or other not available to the consumer!

ruthyb_3

Can any one help with this for me.
I split from mu husband 5 years ago and we still had a mortgage with an endowment at this time. The house eventually went up for sale and the endowments were cashed in about three years ago. the house did sell after some battle, May 2006, but the money for it is still held on deposit with the solicitor as my ex wont agree to it being split.
My question is can I still claim on the shortfall the endowment was going to cause or because its been cashed in then its lost.

smigger15

Hi, I had 2 endownment policies that I felt were mis-sold to me. One was through Scottish Amicable (now Prudential) and the other was through Standard Life. I successfully got compensation from Standard Life but Prudential disputed the claim I put in. This then went to the FSA, they have looked at my claim and have said that they will be ruling in my favour but the last word has to be by the Ombudsman him/herself. I have waited for approx 2-3 years for this final decision to be made and keep getting letters from them every couple of months stating that the workload the Ombudsman has is preventing them making a final decision and that I will hear from them asap. I'm fed up waiting now and wondered if anyone else has found themselves in this situation ? What is a reasonable time-scale to give them ? Cheers Vicky.

dunstonh

This then went to the FSA, they have looked at my claim and have said that they will be ruling in my favour but the last word has to be by the Ombudsman him/herself.

The FSA dont handle complaints. I assume you mean FOS.

I'm fed up waiting now and wondered if anyone else has found themselves in this situation ? What is a reasonable time-scale to give them ?

Up to 2 years although 6-12 months is more common.

To be honest, I doubt you will get any redress or if you do it will be very low. Scot Am policies are doing very nicely and most are back on track to pay a surplus. I wouldnt be surprised if you get complaint upheld but no redress as you are financially better off.