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Alice H
Alice H, Solicitor/Partner
Category: Law
Satisfied Customers: 2847
Experience:  Partner in national law firm
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If a Financial Ombudsman had made a monetary award to the clients

Resolved Question:

If a Financial Ombudsman had made a monetary award to the clients of an IFA in recognition of the fact that he made an error of judgement when advising them re a specific investment in CFDs and the IFA has subsequently ceased trading recently will his indemnity insurers at the time he made this error be liable to pay the compensation that has been awarded by the Ombudsman to his former clients? Thanks *****
Submitted: 2 years ago.
Category: Law
Expert:  Alice H replied 2 years ago.
Alex Hughes : My name is***** and I'm happy to help with your question today. I need to ask you some preliminary questions to be able to help you.
Alex Hughes : When was the award made and for how much please?
Alex Hughes : Good evening. Do you still need help?
Customer:

Sorry for the delay in replying. The compensation has yet to be worked out so, in effect, my question is a hypothetical one. My husband, Ian, and I just want to know who will be responsible for paying us as the IFA has ceased trading. Thanks *****

Alice H, Solicitor/Partner
Category: Law
Satisfied Customers: 2847
Experience: Partner in national law firm
Alice H and 2 other Law Specialists are ready to help you
Expert:  Alice H replied 2 years ago.
Good morning.
Even though the IFA has stopped trading under his professional rules of conduct he must ensure that he has 'run off cover' for 6 years to cover any claims made against him or his business. So the fact that he is no longer trading is irrelevant for your purposes - if the FOS makes an award he will still be liable to pay. Without looking at his indemnity cover I cannot say whether your claim will be paid out by his insurer but if it relates to conduct/advice/negligence then it should so and the same rules about run off cover apply. Therefore, you should go ahead with your FOS application.
Alex
Alice H, Solicitor/Partner
Category: Law
Satisfied Customers: 2847
Experience: Partner in national law firm
Alice H and 2 other Law Specialists are ready to help you
Customer: replied 2 years ago.

Thanks Alex. The FOS has made a final decision in our favour against the IFA (Steven Blofield of SBA Financial Ltd on 30/06/2014 and we have to accept or reject it before 30/07/2014. It has taken a long time to reach this point and in the meantime SBA informed the FOS in writing on 02/06/2014 that SBA Financial ltd had been forced to cease trading as a financial advisory firm since 25 April 2014 because the company's professional indemnity insurance expired at midnight on 25/04/2014 and the insurer declined to renew the company's insurance. The professional insurance broker they used was unable to obtain terms for professional indemnity cover from any other source. There is a complicated calculation the Ombudsman wants to be used to calculate our award and we are hopeful that Radcliffes (IFAs) will be able to calculate it for us to give us an idea of what we might expect to get or is this something that you or one of your colleagues can do for us? Thanks *****

Expert:  Alice H replied 2 years ago.
Unfortunately this is not something we can help you with because the amount of work involved is time consuming and would be difficult to follow in a Q&A session. If you have an IFA working in the calculation then that should be all you need; employing a solicitor will simply add to the cost and reduce your award further.
Expert:  Alice H replied 2 years ago.
Hi

I am following up our conversation to see how you got on with the issue. If you need any further help then please let me know - remember I am a qualified UK Solicitor and able to help on most aspects of English Law. I am London based and usually able to respond to your query very quickly.

Regards
Alex Hughes

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