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High Court orders FSCS to pay more

Sarah Davidson

October 12, 2012

In a landmark ruling yesterday a High Court judge said the FSCS had failed to compensate Charmaine Emptage sufficiently for bad mortgage and investment advice she received before the credit crunch.

Berkeley Independent Advisers mortgage broker Peter Sharratt advised Emptage to switch a £40,000 repayment mortgage for an interest-only mortgage of more than £111,000 and in January 2010 the FSCS awarded Emptage £11,522.98 compensation relating to this claim.

But they refused to compensate her for bad investment advice that saw her invest over £70,000 in Spanish property before the bubble burst.

Mr Justice Haddon-Cave ruled Sharratt’s advice was “drastically incorrect” and the payout was not “fair compensation”.

He ruled that Emptage be paid enough to put her back in the financial position she was in prior to Sharratt’s advice.

He said: “This case raises issues regarding the approach taken by the FSCS to assessing claims for compensation. This case may have implications for other similar cases.”

He ordered the FSCS to pay Emptage’s £150,000 legal costs and suggested they give her full compensation.

A lawyer involved in the case told The Daily Telegraph the FSCS was investigating similar claims cases since 2010 and that others were in the pipeline.

An FSCS spokesman said: “We based our decision in this case on a detailed analysis of the legal and factual position. The FSCS determines each claim on its own merits according to the available information and by the application of the rules that are set for us.

“We are now considering our position following the judgment and cannot comment further at this stage.”

The judge granted the FSCS permission to appeal given the potential impact of the ruling.


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