Ian Golding & Ors, R (on the application of) v Financial Services Compensation Scheme Limited

Section 27(2) of the Financial Services and Markets Act 2000 creates a single cause of action. Recovery of transferred money or property and compensation for resulting loss are remedies within that cause of action. The cause accrues when the statutory conditions are met and the transfer occurs, rather than when a later investment loss becomes apparent. Loss may be sustained on transfer where a claimant exchanges advantageous pension rights for a less advantageous SIPP arrangement. Limitation policy, statutory coherence and practical workability support that construction. Even if separate causes were assumed, relief may be refused under section 31(2A)(a) of the Senior Courts Act 1981 where the outcome would highly likely have been the same.

The claimants sought judicial review of decisions by the Financial Services Compensation Scheme rejecting claims under section 27 of the Financial Services and Markets Act 2000 on limitation grounds. Their pension funds had been transferred into SIPPs following advice from an unauthorised adviser and were then invested in high-risk schemes.

The defendant had compensated the claimants for lost funds and certain fees, but not for lost returns. Three lead claims were selected. The central issue was whether section 27(2)(a) and (b) created separate causes of action and, if so, when the compensation cause accrued.

1. The claims were dismissed. Section 27(2) of the Financial Services and Markets Act 2000 created one cause of action with different remedies. The statutory wording, the reference in section 28(2) to the amount of compensation, and the need to avoid incompatible limitation periods supported that conclusion. British Coal Corporation v Ellistown Pipes Ltd (Hepworth Building Products) [1994] RVR 81, as endorsed in Zedra Trust v THG [2026] UKSC 6, provided persuasive support. The cause accrued when the section 27(1) conditions were met and the pension funds were transferred.
2. Consumer protection was an important but qualified statutory objective. It did not justify an interpretation producing anomalous or incompatible limitation periods. The proposed alternative, based on identifying a later point of loss by comparing fluctuating pension values, was also practically unworkable and uncertain.
3. Alternatively, if section 27(2)(b) created a separate cause, loss could be suffered on the transfer. The claimants had exchanged more advantageous pension rights for less advantageous SIPP arrangements. Equal nominal value did not prevent loss. Costs of restoring the earlier position and contractual SIPP fees could also be relevant. The transfer and planned investment formed an indivisible scheme, and loss could occur simultaneously with the transfer.
4. On that alternative basis, the court would have refused relief under section 31(2A)(a) of the Senior Courts Act 1981, since it was highly likely that the outcome would not have been substantially different. If the transfer date were rejected, the investment date would have been the accrual date.
5. Evidence from the defendant’s professional witness about operational difficulties in calculating counterfactual pension values was factual evidence, not expert opinion. It was therefore admitted.