NG claims and why you should submit them (TC)

There have been some encouraging developments on this. 

The information is for lenders only so I've posted it on the private forum, see p2pindependentforum.com/post/429836/thread

Is there a deadline for submitting a claim, where one does not want to be part of the creditors' committee?

Regrettably I fear that I was mistaken in holding out hope that the FSCS might entertain claims where BLN is found to have been negligent.

In my OP I noted the case of London Capital & Finance (LCF), which failed a few years ago leaving investors in its unregulated (and essentially fraudulent) mini-bonds seriously out of pocket. Mini-bonds, like p2p, are outside the scope of the FSCS. However, LCF was regulated as an adviser. Any investors able to provide evidence that they had been advised by LCF to invest in the minibonds were able to claim under the FSCS, because the advice was regulated and it was misleading. Investors were not required to prove that they had relied upon the advice, merely that they had received it.

I argued that if BLN had been negligent in its performance of a regulated activity (the operation of the p2p platform), which was the grounds on which NG lenders had received awards from the FOS, then this would be enough to provide a prima facie case for claiming compensation from the FSCS.

What I missed was that not all regulated activities are within the scope of the FSCS.  Advice is within the scope, but operating a p2p platform is not.  So I'm afraid that there is no prospect of compensation from that quarter.  I'm sorry if I've got people's hopes up.

I still think it's worth making a negligence claim against BLN, where you have a strong case. If and to the extent that such claims are upheld, claimants will become creditors of BLN.  Although the Estimated Outcome Statement presented to the Court projects that there will be no funds available to pay creditors, this could change.  So it's worth a go, even if the likelihood of a significant payout is modest.

I don't think it will help you. So just FYI

Here is another mini bond case I was involved with. All investors got their money back via the FSCS (as long as they applied) due to the negligence of a 3rd party company.

www.thisismoney.co.uk/money/investing/article-7447777/SEB-mini-bond-investors-win-5m-payout-FSCS.html

www.fca.org.uk/news/news-stories/secured-energy-bonds-plc-options-investors


www.fscs.org.uk/making-a-claim/failed-firms/independentportfolio/


This occurred prior to the LCF case.

That isn't correct. But I still don't think it helps you

Our barrister never claimed we were given advice. The actual claim we submitted was the promotional material we were given to read was flawed and the material was signed off as OK by a regulated company in a regulated activity rather than the unregulated mini bond company. I was never given advice by Independent Portfolio Managers or Secured Energy. We never included the word advice in our claims to the FSCS.

That is why we went after Independent Portfolio Managers rather than Secured Energy.


The FSCS claims followed some successful test cases to the FOS. The FOS specifically say we were not given any advice. This is what they said

"Most investment complaints the ombudsman service receive are about advice - but Mrs B was not advised by IPM"

You can look at the sample FOS claim on the FOS website. "Juristriction" was the biggest challenge. Obviously the FOS doesn't apply in your case.

Once the test cases with the FOS were upheld, we took IPM to court to enforce the FOS ruling knowing they couldn't pay, they then folded after action from the FCA and we put in claims to the FSCS on exactly the same basis. Nothing to do with any advice some of us may have been given

One of the challenges in the LCF case was the standard material given to investors wasn't bad enough in the eyes of the FSCS so the FSCS trawled through individual recorded phone calls to investors etc. looking for anything dodgy that was said to individual investors.