Mark Grogan v IG Index Ltd

For leveraged spread betting and CFDs, the Conduct of Business Sourcebook appropriateness assessment concerns whether the client has the knowledge and experience to understand the product’s risks. It is ordinarily an initial assessment, not a continuing obligation triggered by later trading, an account change or an application for professional status. A separate, narrow protective duty may arise where vulnerability or problem gambling is known, or reasonably apparent from information disclosed to the provider; losses alone do not create a broad duty to prevent self-harm. The best-interests obligation would apply to positively known vulnerability, but no such knowledge was established. A fiduciary relationship also requires an undertaking of loyalty. The claim was dismissed.

This was a first-instance claim by a retail spread bettor against a regulated provider. The claimant had deposited and lost substantial sums over several years and alleged that the provider should not have opened his account or should have closed it earlier. He relied on the appropriateness rules in the Conduct of Business Sourcebook, the best-interests rule, alleged vulnerability and problem gambling, common-law duties and fiduciary obligations. The court had to decide whether any duty was breached and, if so, whether the losses were caused by that breach. The claim was dismissed.

The claim was dismissed. The court found no breach of regulatory, common-law or fiduciary duty.

1. Appropriateness. The COBS 10A inquiry concerned the client’s knowledge and experience relevant to understanding the risks of the product, rather than whether later conduct showed that the client was generally unsuitable to access it. The claimant understood the risks, and the initial assessment was not shown to be defective. Following Quinn v IG Index Ltd [2018] EWHC 2478 (ChD) and Day v Forex [2023] EWHC 1349, there was no continuing duty to reassess appropriateness on each transaction, after an application for professional status or merely because the account type changed. Any initial breach would also have failed on causation.
2. Vulnerability. The court followed Calvert v William Hill [2008] EWCA Civ 1427 in rejecting a general duty to prevent a person harming himself. A narrow protective duty may arise where a provider knows or ought reasonably to know that a client is vulnerable or a problem gambler, particularly where the provider has assumed control or responsibility. The inquiry is objective and confined to material actually drawn to the provider’s attention. The claimant’s losses, deposits, wealth information, gambling history and failed professional-client application did not, without more, make vulnerability apparent. The 2021 guidance did not create an automatic duty to stop trading.
3. Best interests and fiduciary duty. The best-interests obligation would have been breached if the defendant had positive knowledge of the claimant’s vulnerability, addiction or gambling problems, but that factual foundation was absent. Applying Hopcraft v Close Brother Limited [2025] UKSC 33, the court held that vulnerability or power-dependency alone did not create fiduciary obligations; an undertaking of loyalty was required and none existed.
4. Causation and other matters. Causation required proof on the balance of probabilities that the loss would have been avoided but for a breach. The court declined to determine causation for the undefined vulnerability and best-interests breaches. If breach had been established, it would not have accepted that the claimant would probably have suffered the same losses elsewhere. Contributory negligence was not determined in the abstract.