In this case, the claimants sued Lloyds Bank over a GBP 700,000
investment. The claimants met with Lloyds in 2006 and January 2007
and based on Lloyds' assessment of their attitude to risk,
various "balanced/medium risk" investments were
Thereafter, the claimants signed Lloyds' standard terms and
conditions, stating that Lloyds would periodically check for
changes in the claimants' circumstances that could affect their
In March 2008, Lloyds conducted a review meeting. Despite the
value of the initial investment dropping due to the financial
crisis, Lloyds advised the claimants to retain their investment.
The claimants eventually instructed Lloyds to liquidate their
portfolio in July 2008 and sustained a loss of GBP 43,000 on the
original amount invested.
In March 2013, the claimants issued proceedings claiming Lloyds
acted negligently, in breach of contract and its statutory duties
(under s.150 FSMA 2000 and breaches of FSA conduct rules) regarding
the initial investment advice. They argued the investment was not
suited to their appetite for risk - which they submitted was
While conceding their causes of action concerning the alleged
negligent advice given in January 2007 had expired, they argued
Lloyds were under a continuing duty of care to re-consider the
advice (and correct it) at the subsequent review meeting.
The court held the initial advice was not negligent, meaning
Lloyds could not be deemed negligent for subsequently failing to
correct it. The Judge held that the duty arose at the point of the
original advice; once that advice was given, the duty of care was
discharged. Further, the duty would only be continuing if the
claimants were able to identify a contractual obligation that
remained unperformed (distinguishing it from Midland Bank Trust
Co Ltd v Hett, Stubbs & Kemp ).
This case provides welcome news for the finance industry and
insurers. It also provides useful guidance to other professionals
who may face similar arguments from claimants.
The Financial Conduct Authority FCA has published the interim feedback to the call for input to the post-implementation review of the FCA's crowdfunding rules (FS16/13) (the Interim Feedback Report)...
On 11 October 2016 the FRC published its advice to audit committee chairs and finance directors of listed companies, highlighting key issues and improvements it considers can be made to annual reports in the 2016 reporting season.
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