The Financial Ombudsman Service (FOS) has ruled against self-invested personal pension (Sipp) provider, Liberty, in a “landmark pensions decision”.

The FOS found that Liberty had “breached its duty of care” after it failed to act in clients' best interests' in preventing “significant consumer detriment" by accepting Ethical Forestry into the Sipp.

They also failed to identify the “significant risk” posed by Avacade giving advice and conducting regulated activities, despite not having authorisation.

Both clients were advised by Avacade after receiving a cold call recommending they move their pension.

The FOS stated that it’s unlikely the clients would have invested if Liberty had treated them both fairly and responsible, and therefore would not have suffered these losses.

The ombudsman has now given the same response in two separate decisions for clients of APJ Solicitors, both of whom invested a total of £37,500 into the Ethical Forestry Scheme through Liberty.

APJ Solicitors also have 800 similar cases currently lodged with FOS against Liberty, with a collective value of more than £31m, potentially representing a bill of “tens of millions” for the Sipp firm.

APJ Solicitors solicitor, Glyn Taylor, commented: “We’re delighted that the FOS has recognised and supported our argument that Liberty had a responsibility to carry out greater due diligence on the business it accepted from Avacade and in failing to do this, and agreeing to accept such a large amount of questionable business from Avacade, it is liable for their clients losses.”

“We’re confident that the FOS will now issue similar decisions on behalf of many more of our clients who have lost money after putting their trust in Avacade and Liberty.”

Liberty has been ordered to compensate each of the clients to put them in the position they would have been, had they not transferred, including any gains they would have made.

They have also been ordered to pay a “nominal” sum of £500 to each client, for the “trouble and upset” caused.

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