- 1,400 investors forced to wait a decade for compensation after collapse of Custom House Capital
- Oxera submits Expert Report on behalf of investors
A new landmark ruling by the Irish High Court has determined that almost 1,400 investors who had been left out of pocket by Custom House Capital must be paid compensation, despite attempts from the Investor Compensation Company DAC to block payment.
Oxera, the leading economics consultancy that submitted an Expert Report on behalf of the investors, says that the ruling sets a precedent for investor compensation schemes in Ireland.
Custom House Capital was liquidated in 2011 after senior directors were discovered to have misappropriated €66.5m in investors’ funds. A decade later, 1,400 investors are still awaiting compensation.
The Investor Compensation Company, a state-backed rescue fund, had attempted to block compensation on the grounds that investors might recoup more money than they had lost.
Oxera was hired as experts on behalf of the cohort of investors who had not received payment. The consultancy’s expertise in the field of investor compensation schemes was key to its appointment. Oxera’s past work in this field includes a 2005 reference study for the European Commission, which continues to be used as reference material. Oxera has also provided research for the Financial Services Compensation Scheme.
Dr Luis Correia da Silva presented the expert testimony on behalf of the Oxera team, receiving notable praise in the judgment from Justice Heslin: ‘Having regard to Dr da Silva’s qualifications and experience, none of which is in dispute, it is fair to say that few people could be more qualified than Dr da Silva to comment on the consequences of the interpretations of the 1998 Act contended for by the ICCL’.
Jonathan Haynes, Oxera Senior Consultant, says: ‘This test case will set a precedent for future investor compensation scheme cases in Ireland’.
‘Many pensioners have lost large sums of money and/or have been left without access to their pension pots for over ten years as a result of this case. We hope that this judgment will enable these individuals to receive some compensation for their losses.’
‘The ruling highlights the importance of quick and speedy compensation payments. The key objective of any investor compensation scheme is to maintain market confidence. If a compensation scheme is to be a success, it must pay compensation quickly.’