Emptage v Financial Services Compensation Scheme Ltd [2013] EWCA Civ 729 (18 June 2013)

Emptage v Financial Services Compensation Scheme Ltd [2013] EWCA Civ 729 (18 June 2013)

The loss suffered by Ms Emptage flowed from negligent mortgage advice, a regulated activity, and FSCS had power and duty to compensate for that loss. FSCS erred in excluding losses arising from the investment as it failed to recognise the indivisible nature of the advice and the risk created by the unsuitable mortgage. Compensation must reflect the loss caused by the breach of regulated mortgage advice duties, not be limited to additional mortgage costs.

Citation
[2013] EWCA Civ 729
Parties
Claimant/respondent: Charmaine Emptage; Defendant/appellant: Financial Services Compensation Scheme Limited
Jurisdiction
England and Wales
Judgment Date
18 June 2013
Procedural Posture
Appeal (civil) / Court of Appeal Judgment on Appeal From High Court (administrative Court)
Outcome
Appeal dismissed
Legal Topics
Compensation Scheme, Regulated Activities, Mortgage Advice, Judicial Review, Assessment of Damages
Financial Services Law Administrative Law Compensation Scheme Regulated Activities Mortgage Advice Judicial Review Assessment of Damages

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Parties

Charmaine Emptage

Claimant/respondent

Financial Services Compensation Scheme Limited

Defendant/appellant

Procedural Posture

Appeal (civil) / Court of Appeal Judgment on Appeal From High Court (administrative Court)

Legal Issues

  1. 1 Whether FSCS was required or entitled to exclude losses arising from investment in Spanish property when assessing compensation for negligent mortgage advice
  2. 2 Proper assessment of compensation under the Financial Services Compensation Scheme for breach of regulated mortgage advice duties

Ratio Decidendi

The loss suffered by Ms Emptage flowed from negligent mortgage advice, a regulated activity, and FSCS had power and duty to compensate for that loss. FSCS erred in excluding losses arising from the investment as it failed to recognise the indivisible nature of the advice and the risk created by the unsuitable mortgage. Compensation must reflect the loss caused by the breach of regulated mortgage advice duties, not be limited to additional mortgage costs.

Court Disposition

Appeal dismissed

Orders

  • FSCS's assessment of compensation quashed
  • FSCS required to reassess compensation in accordance with the judgment