In a telling reminder to amateur investors that they should seek legal advice straight away if they feel let down by their financial advisers, a woman who lost a chunk of her life savings in a misguided bid to make them grow will go uncompensated after she left it too late to sue.
The woman had in 2005 invested £65,000 – 75 per cent of her life savings – in a property fund recommended by her financial adviser. The fund went through a roller-coaster ride over the next few years – it lost 30 per cent of its value in one year alone – and, by 2012, her investment was still worth less than she paid for it.
She sued the firm for which the adviser worked, claiming that he had negligently recommended a fund which was wholly unsuitable for her. She had little idea about finance, never having made such an investment before, and alleged that he had told her that she was ‘guaranteed’ at least her £65,000 back after five years.
The firm denied liability and argued that the woman’s claim in any event fell foul of the three-year time limit contained within the Limitation Act 1980 and that the proceedings had been lodged too late. A judge permitted her to continue with her claim, but the firm argued that that decision was wrong in law.
In allowing the firm’s appeal, and dismissing the woman’s claim, the Court of Appeal found that, despite her naivety and lack of investment experience, she should have realised by July 2009 that she had suffered a loss. The value of the fund had fallen catastrophically in that year and a simple inquiry of the firm, or reference to ‘plain English’ documentation, would have revealed to her that there was no assurance that she would get her money back.