Donegan & Ors, R (On the Application Of) v Financial Services Compensation Scheme Ltd [2021] EWHC 760 (Admin) (29 March 2021)

Donegan & Ors, R (On the Application Of) v Financial Services Compensation Scheme Ltd [2021] EWHC 760 (Admin) (29 March 2021)

The LCF bonds were not 'transferable securities' within the meaning of MiFID II and the RAO because they were expressly non-transferable and not negotiable on the capital market. The no-transfer clauses, even if unfair under the Consumer Rights Act 2015, did not render the bonds transferable for regulatory purposes....

Source-derived case information.

Citation
[2021] EWHC 760 (Admin)
Parties
Claimant: Emmet Donegan; Claimant: Joanne Ellis-Clarke; Claimant: Alan Considine; Claimant: Nathan Brown; Defendant: Financial Services Compensation Scheme Limited
Jurisdiction
England and Wales
Judgment Date
29 March 2021
Procedural Posture
Judicial Review / Final Judgment
Outcome
Claim dismissed
Legal Topics
Transferable Securities, FSCS Compensation Eligibility, Unfair Contract Terms, Mi FID II Interpretation, Consumer Rights Act 2015
Financial Services Law Consumer Protection Law Administrative Law Transferable Securities FSCS Compensation Eligibility Unfair Contract Terms Mi FID II Interpretation Consumer Rights Act 2015

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Summary, issues, holding and outcome

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Parties

Emmet Donegan

Claimant

Joanne Ellis-Clarke

Claimant

Alan Considine

Claimant

Nathan Brown

Claimant

Financial Services Compensation Scheme Limited

Defendant

Procedural Posture

Judicial Review / Final Judgment

Legal Issues

  1. 1 Whether LCF bonds were 'transferable securities' under MiFID II and the RAO
  2. 2 Whether no-transfer clauses in the bonds were unfair under the Consumer Rights Act 2015 and thus ineffective
  3. 3 Whether LCF agreed to deal in transferable securities under Article 64 RAO

Ratio Decidendi

The LCF bonds were not 'transferable securities' within the meaning of MiFID II and the RAO because they were expressly non-transferable and not negotiable on the capital market. The no-transfer clauses, even if unfair under the Consumer Rights Act 2015, did not render the bonds transferable for regulatory purposes. Therefore, the Defendant's decision to deny FSCS compensation to the majority of LCF bondholders was lawful.

Court Disposition

Claim dismissed