Investors suing for compensation over Arch cru are writing to up to 40 wraps and platforms including Scandia and Canada Life asking them to pass on details of their action to all clients who were also invested in the failed funds.
Any investor who has not accepted a compensation offer made by Arch cru authorised corporate director Capita Financial Managers Limited can join the case launched by solicitors Harcus Sinclair on behalf of 900 claimants.
It is estimated that there are as many as another 2,000 investors with £30 million in Arch cru between them who have not yet signed up to the action.
The Capita offer of 14p in the pound closed on December 31 last year and investors who have not accepted it have until the end of March to join the litigation against them.
Harcus Sinclair obtained an order from the court compelling Capita to provide the register of investors in Arch cru and permitting them to write to investors listed on the register. However, it does not include the names and contact details of individuals who invested through a wrap or platform.
“There are many investors in Arch cru out there who have no idea that this litigation is an option for them. There may even be investors who do not know that they are actually invested in these funds,’ said Arch cru Litigation Committee chairman John Hawkes.
‘Others investors may have been contacted but not fully understood the choices on offer at the time. But now only one choice remains if they want to get back more than whatever small value remains in the funds: Sue Capita.”
Mr Hawkes believes Wraps and Platforms have a moral and possibly a legal obligation to contact their clients. ‘If I were a client who only found out about our legal action when it was too late to join I know whom I would blame for not telling me. It is in their best interests to tell clients about the action for the sake of their own credibility,’ he said.
The litigation is free to join and legal expenses will be deducted from any award only in the event of success. If the case fails, litigants are insured against costs.
Full details of the Arch cru Litigation Campaign case and procedures for joining can be found on its website www.archcruclaims.org.
1. Arch cru Litigation Committee is a steering group appointed to represent the interests of investors in Arch cru funds who are suing Capita Financial Managers, as Operational Director of the funds, for compensation following catastrophic losses to the investment.
2. Around 900 investors are taking legal action against Capita FM. They are represented by Damon Parker, head of litigation as solicitors Harcus Sinclair of 3, Lincoln’s Inn Fields, London WC2A 3AA.
3. A Group Litigation Order was granted by the High Court in November enabling Harcus Sinclair to contact all 20,000 investors whose funds were invested in Arch cru and who have suffered loss.
4. Capita FM has made a no-fault offer of compensation to investors amounting to 15 per cent of funds invested plus interest. A deadline has been set at December 31, 2013 to join the scheme.
5. Arch cru Litigation Committee believes this offer to be inadequate compensation. It estimates that investors who go to court will achieve around 70 per cent of their investment net of court costs if their action succeeds.
6. The legal action against Capita FM is being funding by a litigation fund. As a result investors are not required to make any up front payment for court costs which will be deducted from any award made by the courts.
7. The investors’ case against Capita FM is that it failed to exercise proper control of the funds in which their money was invested.