Cricketer Paul Collingwood warned to settle court case with financial advisors

37-year-old cricketer Paul Collingwood is one of a group of sports stars suing their financial advisors over allegations of negligent financial advice

Durham cricketer Paul Collingwood
Durham cricketer Paul Collingwood

Durham cricket captain Paul Collingwood has been warned to come to an out-of-court deal in his case against his financial advisers or risk being left empty-handed even if he wins.

The former England star is one of a group of sports stars embrawled in a high court battle to sue their financial advisers for £3m over allegations of negligence.

Along with the 37-year-old, Test cricketer James Anderson, former Everton footballer, Craig Short, ex-Blackburn striker Matt Jansen, former Norwich defender Simon Charlton and former England cricketer Matthew Maynard, are among those bringing 14 separate cases alleging negligence against Cheshire-based Sigma Wealth Management Ltd.

They claim they received negligent advice to put money into risky, unregulated investment funds, while being assured during “patter” by Sigma’s former directors, Roderick Langham and Lee Hughes, “that there was no risk to their capital involved.”

But this week Deputy Master Mark, a top High Court official, warned the 14 claimants they should reach out-of-court settlements, saying that, even if they successfully fought their cases to the bitter end, they could find “the pot is empty” with the whole of the company’s assets swallowed by legal fees.

Master Mark said: “It is likely that, if all of the claimants go to trial and win, there will be insufficient in the pot to pay each of them what they are due in damages and costs.”

He added: “I find the assertion that they were not prepared to tolerate any risk to their capital somewhat surprising.

“No sane investor would believe that advice – there is always a risk.”

However, the master acknowledged that the claimants were “not necessarily articulate and intelligent individuals.”

“It would be insane to say there was no risk to the capital” he said, adding that it was not disputed that documentation provided to clients by Sigma stated that there was a risk.

“There is an issue as to whether that was ever read or explained,” he said.

He has set a window for a 30 to 40-day hearing of the case, to commence in June 2015 at the earliest. Sigma and its former directors deny liability.

Joseph Sullivan, representing the claimants – who collectively say they lost millions, said: “This is a claim in connection with alleged negligent financial advice advanced to each of the claimants.

“A lot of these people are sportsmen. There were some cricketers who played for the same team and some footballers who knew each other.

“The defendants essentially had a patter, a spiel, that they gave to these clients. Our case is that they were essentially told that there was no risk to the capital involved.

“It would be a question for the trial judge as to whether the financial advisers failed to communicate properly with the clients.

“The claimants are saying that the financial advisers are not telling the truth about the advice given. Similarly the defendants are saying that all of these clients are not telling the truth.”

Derek Holwill, for Sigma, confirmed that the company and its former directors deny saying there was no risk to the sums invested.

Master Mark added: “I hope some sense is seen in these things and it doesn’t go any further.

“Before all the money is dissipated, the parties should get together and try to sort out some sort of deal between them that is not going to lead to fruitless litigation which is going to be very expensive and, even if the clients succeed, is going to be pretty unproductive for them.”

 

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