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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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Hi, I am an independent financial advisor and have a client

Resolved Question:

Hi,

I am an independent financial advisor and have a client who has asked me to sign a stand still agreement in the event that a claim against another regulated company which has defaulted because it cannot pay its liabilities fails to be upheld by the Financial Services Compensation scheme.
The reason for his request is because the 6 yr time-frame is nearly up and he wants to make sure he does not run out of time to go to court, I understand this and have no qualms about it, however, he is insisting that the standstill agreement includes myself as a private individual even though the initial advice was given as the advisor in our Limited company.

I obviously do not want this matter to involve me as a private individual and have said as such but the client has had advice the a standstill agreement with just the ltd company named as the other party is not worth the paper it is written on.

He has now informed me that he will take out a protective Writ if I do not sign the standstill agreement and I am not sure whther this would also involve me as an individual.

My questions is if the advice was given by an employee of a limited company, even if I sign the standstill agreement would it enable any court to take my private assets into consideration and if so, would a protective writ be preferential to the standstill agreement as the seems adamant to push ahead with one or the other.

It would also be good to know what I could do to combat either option if possible.
Submitted: 2 years ago.
Category: Law
Expert:  Ash replied 2 years ago.
Hello my name is XXXXX XXXXX I will help you with this. Please note that I am a working Solicitor and may be on and offline as I have to attend Court and meet with clients, even at weekends. As such you may not get an instant response when you reply as this is not an ‘on demand’ live service, but rest assured I will be giving your question my immediate attention upon return. There is no need to wait here, you will get an email when I reply.

Why does he just not issue proceedings to stop the clock and then that gives him a further 4 months to serve particulars of claim?

Customer: replied 2 years ago.


The FSCS often takes up to 6 months or more to decline or uphold a claim, his justification for the standstill agreement is to gain him an aditional 60 days to decide whether to take me to court after the FSCS make their judgement. If the FSCS rules in his favour then this will be the end of the matter, if not, he will no doubt come for me.

Expert:  Ash replied 2 years ago.
But why are you being asked to sign this form? Did you provide advice?

Customer: replied 2 years ago.


Yes, I provided advice and a complaint has been upheld by the ajudicator, however the complaint has now been forwarded to the Ombudsman as I am appealing as I feel it unjust. The complaint was lodged with us in June 2013 and we responded turning down his claim well within the 8 weeks we are allowed. In September last year the other FCA authorised company were found liable for producing and distributing missleading literature to IFAs and the public regarding the investment and the FSCS have invited investors to make claims to them citing the company at fault.


 


Assuming my client is awarded compensation form the FSCS then as far as he is concerned this will be the end of the matter, however, if his claim fails then he will require re-imbursement elsewhere

Expert:  Ash replied 2 years ago.
Do you work for a firm or self employed? Do you have insurance?

Customer: replied 2 years ago.


Work for a firm, director/owner, P.I insurance is an annual renwable insurance and all insurers refused to cover this type of investment after at the Oct 2011 renewal, this is the same for all P.I insurers and the advisors they cover, so we were covered up to 2011 but not after. The complaint is the car crash in our industry so the insurer who took the risk whaen the advice was given has no liability,

Expert:  Ash replied 2 years ago.
Ok - but you worked for a firm?

Customer: replied 2 years ago.


Yes, I still work for/own the same firm

Expert:  Ash replied 2 years ago.
Ok - then you don't need to worry, you won't be sued individually.

Your employer is vicariously liable. But they need to make the decision whether or not to sign the document. They could refuse and risk proceedings, but I do not know whether the client is likely to issue.

But you could pad it out and see why the client does not issue direct against the other firm.

But you wont be used, this is a business matter.

Can I clarify anything for you?

Alex

Customer: replied 2 years ago.


Hi, so you are clarrifying that if I sign the stand still agreement that has a space for me to sign as a director of the firm and with my individual name then I will not be held personally liable, see the clients e-mail, he seems to think different:


 


Dear XXXXX,


 


Thank you for your telephone call yesterday.


 


You are quite right that you are personally joined in this agreement.


This is because you have advised that you no longer have insurance cover.


 


You also advise that you will be the sole director in two weeks time.


If we were to apply to the court for a protective writ, we would seek to include you in this writ. The standstill agreement seeks to avoid the not insubstantial costs involved in obtaining the writ.


 


I have had a word with my barrister, and he says that by signing the standstill agreement you will not be admitting any liability for the advice or my losses. The purpose of the agreement is simply to keep the matter open until the agreement is terminated in accordance with its terms. In other words, if it ever becomes necessary to bring the case to court, you will still be able to rely on all the defences and arguments now open to you.


 

Expert:  Ash replied 2 years ago.
I wouldn't sign the agrewment, if it was in business then your firm should be liable.

I would not sign anything without having it checked first.

Alex

Customer: replied 2 years ago.


If I dont sign the agreement then the client will issue a protective Writ regardless, what does this mean to:


 


A: My company


B: Me personally


 


And is it a better option than signing the standstill agreement

Expert:  Ash replied 2 years ago.
Have you spoken to your company or is it just you?

Customer: replied 2 years ago.


Hi,


 


I am the director/owner of the limited company, therefore I would be speaking to myself, I have 6 other advisers/staff. I am an employee of my own limited company

Expert:  Ash replied 2 years ago.
To be honest a protective writ is the same as him issuing proceedings and not serving particulars.

The only adverse affect if you refuse to sign is that he can try and issue proceedings, either way with a protective writ this only buys 4 months to serve particulars.

If you sign you agree that in futUre he could serve proceedings against you both. If you refuse now you force him into a corner and call his bluff.

Alex

Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience: Solicitor with 5+ years experience
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