There are estimates that the FSCS could pay out more than a hundred million pounds in compensation.
1,474 claims have been filed against Berkeley Burke, the now defunct SIPP provider. The FSCS confirmed last week that it will pass the claims on to its claims processing teams after it found at least one of them to eligible.
Berkeley Burke was put into default on April 1st 2020, and claims will now be focussed around due diligence failings before allowing clients to make unregulated payments with their pensions.
It is not yet known how much this compensation will amount to, but the administrator of Berkeley Burke’s SIPP arm, Adrian Allen, has previously estimated the FSCS could end paying a claims bill of £158m.
What happened to Berkeley Burke?
The cause of these claims was the SIPP provider accepting high-risk, unregulated investments, many of which have caused large investor losses, between 2010 and 2012.
The embattled SIPP firm has faced claims from a group of over 177 investors, of which over 30 were Smooth Commercial clients, over losses they incurred from these high-risk investments. The investments ranged from forestry in Australia to holiday apartments in Grenada, a court document has revealed.
In a separate case, Berkeley Burke was fighting a 2014 FOS decision which stated that it had to compensate a client after it failed to perform necessary due diligence on the client’s investment.
The investment revolved around an unregulated investment scheme, Sustainable Agro Energy, which sold plots of land in Cambodia where trees would be planted to create bio-fuel.
The Berkeley Burke administrators dropped their appeal case earlier this year after their funds would have been short of the "total potential legal costs" faced if the SIPP provider lost its appeal.
What is the FSCS?
The Financial Services Compensation Scheme (FSCS) is a statutory deposit insurance and investor compensation scheme. It can compensate clients if a financial firm is unable to. It has often been described as a “lifeboat” fund.
It is independent of the government and the financial industry, and was set up under the Financial Services and Markets Act 2000, becoming operational on 1 December 2001. They do not charge individual consumers for using our service.
Smooth Commercial Law work alongside the FSCS to get clients the compensation they deserve. The FSCS have protected more than 4.5m people and paid out £26bn in compensation.
The scheme pays a maximum of £85,000 on individual investment claims, which will amount to £125m if all Berkeley Burke claims received to date are eligible for the maximum pay-out.
How can Smooth Commercial Law help?
Smooth Commercial Law have been a driving force throughout the Berkeley Burke saga. We are one of the law firms representing clients in the ground-breaking Group Litigation Order – with 33 clients in total.
At Smooth Commercial Law, our team of experts have extensive experience in dealing with a whole manner of claims that arise from negligent and/or unsuitable financial advice. We are seeing more and more mis-sold SIPP claims, and have managed to secure compensation for many of our clients.
Should you have a claim, we can deal with your case and look to recover compensation for not just your loss of investment but also any adverse tax liabilities that you may now be facing as well.
You can contact our experienced team by calling *Ruler Number* or by emailing firstname.lastname@example.org