Anderson & Ors v Sense Network Ltd

Anderson & Ors v Sense Network Ltd

Sense Network Limited was not liable under section 39(3) FSMA because its written acceptance of responsibility for Midas's activities was expressly limited to business using a Company Agency, which did not include the scheme; Sense was not vicariously liable at common law as Midas operated a recognisably independent business; the scheme constituted a collective investment scheme, but this did not affect the outcome as Sense's liability was contractually and statutorily limited.

Parties
Appellants/claimants: Adam Anderson & Others; Respondent/defendant: Sense Network Limited
Jurisdiction
England and Wales
Judgment Date
31 July 2019
Procedural Posture
Civil Appeal / Appeal From Dismissal of Claims at First Instance
Outcome
Appeal dismissed
Legal Topics
Appointed Representatives, Vicarious Liability, Collective Investment Schemes, Statutory Interpretation, Ponzi Schemes
Financial Services Law Tort Law Contract Law Appointed Representatives Vicarious Liability Collective Investment Schemes Statutory Interpretation Ponzi Schemes

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Parties

Adam Anderson & Others

Appellants/claimants

Sense Network Limited

Respondent/defendant

Procedural Posture

Civil Appeal / Appeal From Dismissal of Claims at First Instance

Legal Issues

  1. 1 Whether Sense Network Limited is liable under section 39(3) of the Financial Services and Markets Act 2000 for the acts of Midas Financial Services (Scotland) Limited as its Appointed Representative
  2. 2 Whether Sense Network Limited is vicariously liable at common law for the tortious acts of Midas and its advisors
  3. 3 Whether the scheme operated by Midas constituted a collective investment scheme under section 235 of FSMA

Ratio Decidendi

Sense Network Limited was not liable under section 39(3) FSMA because its written acceptance of responsibility for Midas's activities was expressly limited to business using a Company Agency, which did not include the scheme; Sense was not vicariously liable at common law as Midas operated a recognisably independent business; the scheme constituted a collective investment scheme, but this did not affect the outcome as Sense's liability was contractually and statutorily limited.

Court Disposition

Appeal dismissed