Chrysalis Scotland Ltd v Clydesdale Bank Insurance Brokers Ltd [2008] ScotCS CSOH_144 (14 October 2008)

Chrysalis Scotland Ltd v Clydesdale Bank Insurance Brokers Ltd [2008] ScotCS CSOH_144 (14 October 2008)

The court found that the defenders, through Mr Lind, failed to provide adequate advice to the pursuers regarding the risk and operation of a Market Value Adjustment (MVA) on early encashment of the bond. The advice given did not bring home to the pursuers the potential impact of an MVA, and the pursuers would not have invested in the bond had they been properly advised. The defenders were therefore liable in professional negligence for the loss suffered.

Citation
[2008] ScotCS CSOH_144
Parties
Pursuer: Chrysalis Scotland Limited; Defender: Clydesdale Bank Insurance Brokers Limited
Jurisdiction
Scotland
Judgment Date
14 October 2008
Procedural Posture
Civil / First Instance Judgment
Outcome
judgment for the pursuer
Legal Topics
Investment Advice, Duty of Care, Market Value Adjustment, With Profits Bond, Damages
Professional Negligence Financial Services Law Investment Advice Duty of Care Market Value Adjustment With Profits Bond Damages

Case Brief

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Parties

Chrysalis Scotland Limited

Pursuer

Clydesdale Bank Insurance Brokers Limited

Defender

Procedural Posture

Civil / First Instance Judgment

Legal Issues

  1. 1 Whether the defenders, through their employee, failed to exercise reasonable skill and care in investment advice by not adequately advising the pursuers of the risk and operation of a Market Value Adjustment (MVA) on early encashment of the bond.
  2. 2 Whether the pursuers would have invested in the bond had proper advice about the MVA been given.

Ratio Decidendi

The court found that the defenders, through Mr Lind, failed to provide adequate advice to the pursuers regarding the risk and operation of a Market Value Adjustment (MVA) on early encashment of the bond. The advice given did not bring home to the pursuers the potential impact of an MVA, and the pursuers would not have invested in the bond had they been properly advised. The defenders were therefore liable in professional negligence for the loss suffered.

Court Disposition

judgment for the pursuer

Orders

  • Defenders found liable to the pursuers in damages for professional negligence.
  • Damages to be assessed by reference to the difference between the amount realised on encashment of the bond and the sum which would have been obtained had the money been placed on deposit.