Legalese in Terms & Conditions

I joined some time ago now and posted in the Welcome forum about being the victim of a pension scam. I didn't expand on that because the firm of unlicensed advisers orchestrating the scam set their lawyers onto me for defamation when I expanded it on another forum.

They also threatened the other forum owners who then took down the thread.

However trying to recover my pension fund from the trustees (facilitating the scam) is an uphill struggle. My pension fund was invested in high risk unregulated collectives wholly unsuitable for a pension, which were deceptively described as medium risk suitable for retail clients.

Ok, that's the preamble.

I recently got "threatened" by the lawyers of the trustees (that's in addition to the lawyers of the firm of unlicensed advisers mentioned above) because they "didn't like my tone" (sic) in my complaints - I threatened to go to the press. They basically threatened to use my members fund to recover any costs they incur in their defence of any action I take against them.

They referred to their trust deed (which I had never been given btw) and the offending clause goes like this (I've deliberately kept the trustees name out for fear of further reprisals):-

".. the Member indemnifies and agrees to hold harmless and will keep indemnified and hold harmless [the trustee] from all actions, suits, claims, demands, proceedings, liabilities, costs and expenses whatsoever which may be taken or made against [the trustee] in respect of the Services provided that [the trustee] shall be responsible where such liability arises as a result of [the trustees] fraud, wilful default or negligence."

What does this mean in English?

It looks to me like they can do whatever they want and if I take any legal proceedings and they incur costs as a result of any action I take, they will use my pension fund to recover those costs. Is this for real?

However, their lawyer seems to think that's not what it says, claims it is quite clear what it means but won't explain further. They are constantly threatening me with this now saying things like "we don't want to use your member funds but ... " to every complaint I make.

It seems like I have no rights whatever.

[wales01man]

Re: Legalese in Terms & Conditions

Is there anything that can be done as they were unlicensed or against their Solicitors ? are they regulated in any way that can be used against them.

[mk14steve]

Re: Legalese in Terms & Conditions

It's a very long story and much is actually being done. I am quite far along in recovering my pension. I don't really want to get into telling the story or I will again be threatened by solicitors from all parties. Been there, done that, got the scars.

What I am after is what does that clause actually mean? It's just legal mumbo jumbo to me, doesn't even read like English!

[Amethyst]

Re: Legalese in Terms & Conditions

Basically you agree to indemnify the trustees for any actions (so you bear the costs) except where the action has arisen from the fraud, wilful default or negligence of the trustees, the trustees are responsible ( bear the costs)

Fraud, Wilful Neglect or Negligence would need to be proven for that part of the indemnity to kick in.

As it is quite an important clause I would though go and see a solicitor with the full contract and check exactly what your liabilities may be in proceeding with action against the trustees.

[mk14steve]

Re: Legalese in Terms & Conditions

Great! Thanks that makes sense. However, I do think I have a very strong case for "negligence"; Fraud might be more difficult because I feel the trustees unwittingly fell into this scam orchestrated by their business partner (the unlicensed firm) so I don't feel the trustees set out to defraud but their negligence with the due diligence in approving assets to the Scheme meant they have facilitated the transfer of UK pension funds from retail clients into high risk, illiquid unregulated collectives that are wholly unsuitable for a pension. I also have documentary evidence the trustee knew absolutely nothing of these collectives, (which were set up in 2013 and ytd never published audited accounts!). So I feel negligence is easy to show.

The question is can they dip into the fund before I prove negligence, because that is what they are threatening - dipping into the fund before repatriating it to a regulated UK scheme?

[R0b]

Re: Legalese in Terms & Conditions

The question is can they dip into the fund before I prove negligence, because that is what they are threatening - dipping into the fund before repatriating it to a regulated UK scheme?

Well, that question will depend on the rest of the terms of the contract and as Amethyst has said seeking legal advice from a solicitor is probably best to get an understanding.

".. the Member indemnifies and agrees to hold harmless and will keep indemnified and hold harmless [the trustee] from all actions, suits, claims, demands, proceedings, liabilities, costs and expenses whatsoever which may be taken or made against [the trustee] in respect of the Services provided that [the trustee] shall be responsible where such liability arises as a result of [the trustees] fraud, wilful default or negligence."

If they are trying to allege that the clause above allows them to recover their costs from your fund if you bring a claim against them for negligence then I would say this clause as it stands does not allow them to do so (unless it is qualified elsewhere in the contract). Any claims against the trustees alleging fraud, wilful conduct or negligence means they will have to fund themselves to defend it and not rely on any members of the pension fund.

Equally, if they were to bring a defamation claim against you then I also do not think that this clause allows them to use your funds to bring the claim. Because the wording of the clause says "... hold harmless from all actions ... which may be taken or made against the trustee" that would only cover claims which are being brought against the trustees and not claims they are bringing against another person.

Even if a claim being brought against the trustees for anything outside of negligence, wilful default or fraud would be questionable because the clause itself appears to allow them to recover their costs whether successful or unsuccessful in defending the claim, which could more or less restrict a member from bringing an action against them. Perhaps it could be construed as a penalty clause in so far as it deters a member from bringing a claim at all as any claim would not be worth bringing if a member has to repay them the damages won as well as legal fees and other expenses - though I am not a pension expert but just merely looking at it from a perspective of whether it is a reasonable clause.

[mk14steve]

Re: Legalese in Terms & Conditions

Aha. So that seems even better.
BTW, I do have lawyers reviewing my case (I am a member of a Class Action group - who will remain nameless because I DO NOT want any of the parties discovering this post and identifying me or they bully me with legal action!) because even if I get some of my pension back, I am still suffering a significant loss on what was transferred into their Scheme and I want recompense for the losses and for the cost of a new Scheme and a new (properly regulated adviser).
The issue was the trustees making these threats and making out if I take action they are going to dip into my fund (which they still have their sweaty mits on btw). I felt like I had been snookered; we'll see what the lawyers come up with.
Great help!