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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 48167
Experience:  Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
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Dear Sirs, I am a self employed Independent Protection Adviser

Resolved Question:

Dear Sirs,
I am a self employed Independent Protection Adviser and part of a company called Positive Solutions. They pay us on a daily basis, until last week when they have decided to stop paying me because they want me to repay a debt which is NOt my fault. I have done nothing wrong. Can an organisation like Positive Solutions deny someone the right to earn money to live? I have no income coming in yet all the bills to pay for. Any help or guidance would be much appreciated. XXXXX XXXXX IPA. 01726 71011.
Submitted: 3 years ago.
Category: Employment Law
Expert:  Ben Jones replied 3 years ago.

Ben Jones :

Hello, my name is XXXXX XXXXX it is my pleasure to assist you with your question today. Who is the debt with?

Customer:

The debt is with Positive Solutions. Positive Solutions paid the FSCS (Financial Services Compensation scheme) and now they are claiming monies off us. The sum they require is £33,000 and if I resign it goes up to £71,000 approx. If I had done something wrong then I could accept it but I have not along with many other IFA's across the UK!

Ben Jones :

And what is the debt for?

Customer:

Many IFA 's across the country sold Investment products for a company called Keydata Investment Services Limited. Keydata was placed in administration by the FSA (Financial Services Authority).five years ago. Many of the investment cases I arranged for my clients were approved by a compliance officer at Positive Solutions, so what due diligence did they do yet are being asked to pay. They want me to sign a repayment plan for the £33,000 but I cannot do this because I know its not right!

Ben Jones :

ok but what specifically is the debt supposed to cover in this case?

Customer:

Its part of our professional indemnity insurance. We must pay an amount for each client case .

Ben Jones :

ok ignoring the moral aspects of this, do you agree that contractually the money is owed?

Customer:

Yes the money is owed but Positive Solutions is responsible for the advice given.

Ben Jones :

ok but under the terms of the contract you had with them are you specifically responsible for these costs, regardless of who gave the advice?

Customer:

They say I am and have quoted this in the part of the contract too much to type here!

Customer:

Also, I do not have the means to pay this sum as I am part time now and do not have savings to cover it. I also have a similar liability with another firm called The Whitechurch Network (£37,000 approx). As I am not authorised by them they have paid this amount to the FSCS and the only way they can claim this sum is through the Courts which would be too costly for them because we are to many of us across the UK.

Ben Jones :

and finally, is there anything in the contract that says they can terminate it or stop paying you?

Customer:

To recover their costs Positive Solutions can take it from our client trail fee income and this what thye have done. No one has asked about my financial position! But why should the clients have their trail fee income used for this purpose ie to a clear a debt which is nothing to do with them.

Ben Jones :

ok let me get my response ready please

Customer:

Thank you Ben.

Customer:

I have just read a note from a Mr Evan Owen, he is seeking the adviec of a barrister, as he believes in many cases there is nothing in adviser's contracts to suugest they are liabel for advice on Keydata given while they were appointed reps of the networks. Does this help?

Ben Jones :

The issue in this case is that there appears to be an overlap in what you believe your position is from a moral and legal point of view. Unfortunately, the law will not really look at what you consider is morally right and the important factors would be what your contract says and what you had signed up for when you started this relationship with the company.


 


So the key is whether the debt they are pursuing you for is something which they can attribute to you under the terms of the contract that is in place. You need to forget whether you believe it is right or wrong and carefully check the contract terms to see if you have done anything that can attribute these costs to you. It really is something that would depend on the specific terms that deal with this situation.


 


Assuming the company can show that the debt is something that can be attributed to you, then they can consider pursuing it further. There are a couple of options in that case – one is either to offset it against income they owe you, or they could make a separate claim in the county court against you.


 


To be able to offset the money against any fees they owe you, they need to have a specific contractual right to do so. In your case you mentioned that they can offset it against the client trail fee and if there is a specific clause allowing them to do so they may do it, even if you believe it is not correct. There is no requirement on them to check if you can afford it or not, it really depends on the contract that exists in place.


 


You mentioned that it is unlikely that they would be taking you to court for this so this is good news but it would not prevent them from taking off any money already owed to you, as long as it is allowed by contract.


 


The fact someone is taking advice from a barrister would not mean much for the time being because until they read the contracts in detail and determined whether the clauses within them are relevant or not. It is therefore best to keep an eye on any progress on that front. You may even find that if you join forces with the many other IPAs affected, you can get formal legal advice for much better value as you can split the costs between you, rather than seeking individual advice, which would inevitable cost a lot more.

Customer:

Thank you Ben.

Ben Jones :

You are welcome

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