An IFA has lost his court case against his former employer and Capital Home Loans (CHL) over ‘lost’ fees, writes Ben Marquand.
The case was brought following a dispute when the IFA alleged that a business development manager at CHL gave assurances a loan on five buy-to-let properties would be considered using normal underwriting procedures.
But three months after the initial application, the loan was turned down. The properties were occupied by a charity using them as rehabilitation centres for drug and alcohol abusers.
Chris Herbert, the Bristol-based IFA who brought the case, then sought to recover his costs of £4,830 from CHL.
The lender subsequently made a payment of £320 to his then employer, Chancery Asset Management, which Herbert alleged was never offered to him as recompense.
Herbert claimed that his registration was subsequently terminated with no warning, although CHL deny any collusion with Chancery,
The case was heard at Bristol County Court, and the judge dismissed the case having found there was no case to answer for either Chancery or CHL.
Herbert said: ‘It came down to an interpretation of contract law. The judge ruled that I had no contract with Capital Home Loans, so they had no liability. My contract was with Chancery Asset Management.
The judge also ruled that until a contract existed then the business development manager had no responsibility for a duty of care. I now want to warn other advisers who may find themselves in my position.’
However, Bob Young, sales and marketing director at CHL said: ‘His case was naive and completely baseless. It was dismissed completely and we are pleased it is over and we have both been vindicated. The whole matter has caused everyone involved unnecessary work. The judge did not agree with Mr Herbert’s points and made that clear during the hearing.’