Court of Appeal narrows scope of contingent liability in confirming pensions claim statute-barred

In Shore v Sedgwick Financial Services Limited [2008] EWCA Civ 863, the Court of Appeal dismissed Mr Shore's appeal. His claims against SFS for breach of duty regarding transfer of pension benefits in an occupational scheme to a personal pension income withdrawal scheme were statute-barred. However, the Court of Appeal's reasons were different to those of the judge at first instance. The Court held that Mr Shore suffered loss for the purposes of section 2 of the Limitation Act 1980 immediately upon the transfer. It was a transaction under which Mr Shore obtained a bundle of rights which were, from the outset, less advantageous to him. This was therefore a transaction case and not a contingent liability case to which Law Society v Sephton and Co applied and it was not necessary to wait to see what happened to determine whether he was worse off under the new scheme than the old. In addition, applying Haward v Fawcetts, the Court agreed with the judge that Mr Shore had sufficient knowledge for the purposes of section 14A of the Limitation Act more than three years before proceedings were commenced.

This decision should be noted by those involved with claims against financial advisers.