Golding v Financial Services Compensation Scheme Ltd: High Court clarifies limitation period for FSMA section 27 claims

The Administrative Court has dismissed a judicial review brought by three lead claimants against the Financial Services Compensation Scheme, confirming that a claim for compensation under section 27 of the Financial Services and Markets Act 2000 constitutes a single cause of action that accrues on the date a consumer's funds are transferred, rather than separate claims with different limitation periods.

The judgement, handed down by Mrs Justice Hill on 11 September 2026 in the Manchester Administrative Court, concerned claims by Ian Golding, Karen Cumming and Peter Davies, selected as lead claimants representing a further 48 stayed cases. Each had transferred an existing pension into a Liberty SIPP on advice from an unauthorised adviser, Avacade Ltd, before investing the funds in high-risk forestry schemes that subsequently failed. Having initially compensated the claimants for losses arising from Liberty SIPP's negligent due diligence, the FSCS later re-examined their claims following the Court of Appeal's decisions in Adams v Options UK Personal Pensions and Financial Conduct Authority v Avacade Ltd, which established that claims of this kind could fall within section 27 of FSMA. The FSCS rejected the reformulated claims on the basis that the six-year limitation period under section 9 of the Limitation Act 1980 ran from the date of transfer into the SIPP, meaning the claims were out of time.

The claimants argued that section 27(2) creates two distinct causes of action, a restitutionary claim under section 27(2)(a) for recovery of the transferred funds, which accrues on transfer, and a separate compensatory claim under section 27(2)(b) for resulting losses, which they said could not accrue until an actual loss was sustained, potentially years later. On that analysis, their claims for lost investment returns would not yet have been time-barred.

Mrs Justice Hill rejected this construction. She found that the natural reading of section 27, introduced by the single phrase "entitled to recover" and linking its two limbs conjunctively, indicated a single cause of action with cumulative remedies rather than separate rights of action. She placed particular weight on the Supreme Court's recent decision in Zedra Trust v THG, which had criticised the reasoning in Rahman v Sterling Credit relied upon by the claimants and endorsed the Court of Appeal's reluctance in British Coal Corporation v Ellistown Pipes to read a single statutory provision as generating multiple limitation periods. She also rejected the argument that FSMA's consumer protection purpose required a more generous construction, noting that protection under the Act is expressly qualified and that limitation serves its own legitimate policy function.

In the alternative, the judge held that even if the claimants were right that section 27(2)(b) created a separate cause of action, the outcome would not have differed. Applying the Court of Appeal's reasoning in Shore v Sedgwick Financial Services, she found that the claimants had in fact suffered loss immediately upon transfer, having exchanged more advantageous pension arrangements for a materially worse position from the outset, meaning any such claim would still have been out of time. Relief would therefore have been refused in any event under section 31(2A) of the Senior Courts Act 1981.

The judge also admitted evidence from the FSCS describing the practical difficulties of identifying a later accrual date, treating it as factual evidence of the scheme's administrative processes rather than inadmissible expert opinion, and noted that the impracticality of the claimants' proposed approach reinforced her conclusion on the correct interpretation of the statute. Had she not found accrual occurred at the point of transfer, she indicated she would have identified the date of investment in the underlying high-risk scheme as the next most likely accrual point. The claims were dismissed.