[2008] EWCA Civ 863  

This decision will be of interest to those involved in claims against financial advisers several years after the advice in question was provided. Generally, claimants have six years to pursue negligence claims and time starts to run from the date on which the damage is suffered.  

Mr Shore pursued a claim against Sedgwick Financial Services Limited (SFS) for breach of duty in relation to advice given regarding the transfer of his benefits from an occupational scheme into an income drawdown scheme. Shore claimed to have suffered loss as a result of the transfer.  

In the original High Court hearing, the judge held that Shore had not suffered immediate damage on transferring his benefits into the income drawdown scheme but had exposed himself to the risk of loss in the future - a “contingent loss”. Shore’s claim was held to be time barred because, although his income drawdown had become less valuable than an annuity would have been had he bought it at the time of transfer, the falls in annuity rates had actually happened more than 6 years before the claim was commenced.  

The Court of Appeal agreed the claim was time barred but not for the same reasons. The Court of Appeal did not consider the case to be one of contingent loss. Instead it held that the damage had actually been suffered at the time of transfer and that the possibility of actual financial harm constituted the loss.  

Comment: although analysis of this sort of issue is likely to depend on the facts of each case, the judgment offers some useful guidance for pension transfer claims where claimants are arguing that any damage occurred at a later date in order to avoid limitation problems. It will be a welcome decision for professional advisers in that it may limit the circumstances in which claimants may be allowed to pursue claims in relation to advice provided several years previously.