Recovering losses due to ‘market turmoil’
5 October, 2012
The economic woes of the last few years have seen an increase in the number of professional negligence claims where claimants seek to recover market losses.
Often, courts are reluctant to make awards in circumstances where losses result from market fluctuations. However, the case of Rubenstein v HSBC Bank PLC is an example where the claimant was successful. Here, a financial adviser gave advice that an insurance based bond carried the same risk as a cash deposit. The claimant subsequently invested, and lost money after a period of market turmoil.
Because of the specific advice he was given about the risk of this investment, the claimant was able to recover his losses. The circumstances are somewhat ususual, as one would normally expect investment advice to be full of caveats about the possiblity of markets rising or falling.