[Weekly wrap] A new precedent
Two of the cases are those of Hamilton AFA Rodney Hartles, who was sued by a former client who lost money in Bridgecorp, and Jacqui Bradley, a former financial adviser who has begun her trial on charges brought by the SFO, which alleges she and her late husband ran a multi-million dollar Ponzi scheme.
But despite the vastly different sums involved ($90,000 compared to $15 million), it is the Hartles case that is more relevant to most advisers going about their day-to-day business. The High Court's decision in the Hartles case, following appeals from both sides against the District Court's judgment, contains some interesting findings.
Justice Mark Woolford, who is well-regarded in the business community, ruled that in certain circumstances advisers can be personally liable for advice even when operating under a limited liability company structure. This will be of particular relevance to one-man-band advisers.
Another key finding was that this case was different to the Armitage v Church because the client in this instance had less knowledge about finance companies and didn't have a view on them, therefore was more reliant on the adviser's advice. The damages award was increased based on this.
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