“Dishonest” and “manifestly incompetent” Roger Allanson struck off as solicitor after investment scheme collapse

Roger Allanson, owner of the eponymous Allansons LLP unregulated litigation funding investment scheme, has been struck off as a solicitor and ordered to pay the Tribunal’s costs of £103,868.

The scheme claimed to deliver a potential return of 50% in a timeframe of 6-18 months.

Third-party unregulated introducers soliciting investment into the scheme claimed that the investment was covered by the Financial Services Compensation Scheme, thanks to a complex structure involving an insurance broker offering an unauthorised credit default swap and an “After The Event” insurer in Bermuda. Exactly who dreamt up this claim is unclear as it never formed part of Allansons’ own marketing (only their introducers’); while the Tribunal case does centre on misleading claims of “no risk” made in Allansons’ marketing, the FSCS coverage claim is not one of them.

The allegations against Allanson were:

  • That the marketing material used to solicit investment into the scheme was misleading.
  • That the monies invested were “misused”, with either 24% or 4% of each investment retained by Allansons, and a total of £347,000 of payments made either to introducers or Allanson himself that breached the solicitors’ Code of Conduct.
  • That Allanson failed to monitor the mortgage overpayment claims that underpinned the investment scheme.
  • That Allanson sent “inappropriate” emails to an investor who was querying the status of his investment.
  • That Allanson failed to maintain adequate accounting records and client account reconciliations.
  • That Allanson failed to maintain client ledgers for the over 4,000 clients whose cases against their mortgage lenders underpinned the investment scheme.

Checkered history

The investment scheme centred around mortgage borrowers who had supposedly paid too much in interest to their lenders.

Allansons began taking on a handful of claims in December 2016, but the vast majority of cases were taken on in 2018 after the litigation funding scheme ramped up. Of 7,773 cases taken on by Allansons at 31 January 2019, 99.7% were taken on in the preceding 12 months. (The Allansons scheme was reviewed here in January 2018.)

The cases were heavily reliant on a piece of software called “Checker Reports” developed by a man the Solicitors Tribunal refers to politely as “Mr BT”, director of “MAS Limited”. This would almost certainly be Bryan Turner of Mortgage Audit Services Limited, who featured in Allansons investment literature.

“Checker Reports” was put into action in relation to the “Brothers H” (apparently someone at the Tribunal is a Dostoevsky fan), who had defaulted on a number of commercial mortgages with Santander. Before Checker Reports entered the scene, Santander had already conceded an overpayment of c. £29,000 to the Brothers H as a result of a Financial Ombudsman case.

In late 2012, armed with a printout from “Checker Reports”, Roger Allanson demanded Santander refund a further £114,000. Santander refused, stating “the recalculation method to reach this figure is incorrect”. Nonetheless Santander did reduce its claim “a bit further”, settling for the proceeds of the sale of the Brothers H’s property – but clearly not for a £114,000 repayment.

This single case was trumpeted as a “proven track record” in Allansons’ literature. In the Tribunal’s words, the investment literature claimed that the Checker report had been a “silver bullet which had solved Brothers H’s problems”. In reality, the return of £29,000 by Santander was the work of the Financial Ombudsman, not the Checker report, and the claim for a further £114,000 on the basis of the Checker report had been mostly tossed out by Santander. Plus a negotiated agreement not to pursue the Brothers H for money in excess of the property sale proceeds (i.e. money they probably didn’t have).

The Tribunal rejected a submission by Allanson that a single (shaky) case could constitute a “proven track record”.

This was one of a number of points found to be misleading by the Tribunal. Other points found to be misleading in the investment literature included

  • The impression that the investment carried no risk of loss. A FAQ claimed that the only “risks of investing” were “you might not receive a return on your investment… there is ATE insurance in place in the event a case fails.”
  • The impression that investors’ money would be spent only on an expert audit report, with other costs covered by Allansons, whereas in reality investors’ money was funneled to introducers and Allansons itself.
  • A claim that the chances of success had been reckoned at 75%, without mentioning that this was based on legal advice that had been heavily circumscribed and caveated. One of the lawyers who had been used to back the “75%” claim told Allanson that her advice had been mischaracterised and demanded that he remove reference to her practice from the literature.

Misuse of money and 20% commissions

In an email to a much-abused (in every sense) investor called “Mr AL”, Allanson claimed

No commissions, excessive or otherwise have been paid to agents. I do not have any agents.

In reality Allansons was paying commission to a number of introducers, identified only by initials in the Tribunal report.

The Litigation Funding Agreement signed by investors stipulated that funds would be used “specifically to pay for the Checker expert reports and necessary case costs only”. In reality they were used to prop up the law practice (including to pay off the company credit card) and to pay a number of introducers. The Tribunal found that this was a misuse of investor money and contrary to the investor agreement.

Allanson claimed that introducers were due 20% of investor money “payable at case close”. The SRA’s solicitor pointed out that introducers were unlikely to wait until the closure of the legal cases for their money, given they had no oversight or control over those cases. She also pointed out a number of transfers out of the scheme’s bank account to introducers.

£19m invested, not a penny recovered

A total of £19 million was raised from investors in the Allansons’ scheme, and paid out.

Not a penny was recovered from any mortgage lender as a result.

The case against Allansons details a “litany” of failures in progressing the cases, and delays of up to nine months after a potential client had signed an authority before a “letter before action” was sent to the lender.

None of the case files had an individual Counsel’s opinion assessing its merits.

Mortgage lenders who received claims in respect of Allansons clients were left scratching their heads over what the claim was supposed to be about.

The most common cause of delay was that the letter of claim was insufficiently detailed and the lenders were unable to understand what claims were being made, and how those were supported by any calculations.

The Tribunal noted that in the 18 months that the scheme was running, the Respondent did not recover a penny from any lender. He had not issued any claims, nor had he sent any Part 36 offer letters. He had collected from litigation funders, and paid out, over £19m. In not one case had any lender indicated any intention to do other than reject the claims. In not one case had the Respondent provided a detailed exposition to a lender of why there was a good claim and how it was particularised.The letters before action had not been in the proper form, leading to their rejection.

The Tribunal found that up until 2018, Allanson’s strategy had been to overwhelm lenders with a large mass of claims with the threat of charging them £4,000 for a detailed report which didn’t exist. In 2019 the SRA intervened, as Allansons was preparing to change tack by issuing 20 test cases.

Allanson at this point deployed the familiar “everything would have been fine if the regulator hadn’t shut us down” cliché.

The Tribunal was satisfied that in reality, the Allansons scheme collapsed because Allanson was better at raising money from investors than actually using it to fund cases.

The Tribunal was satisfied on the balance of probabilities that the Respondent had failed to adequately manage the progression of the MMP claims and so found the factual basis of Allegation 1.3 proved.

“It’s better to keep your mouth shut and appear stupid than open it and remove all doubt”

Allanson was also sanctioned for “inappropriate” emails sent to the aforementioned Mr AL, who had become concerned about the progress of his investment and started to regularly contact Allanson. Allanson responded by questioning Mr AL’s intelligence and threatening to sue for defamation.

The fact you make wild assumptions to support your personal hostility towards me makes damages for defamation top of the agenda for the meeting yet to come. Mark Twain once said “it’s better to keep your mouth shut and appear stupid than open it and remove all doubt”. I can’t think why that sprang to mind, but curiously it did. Still want to meet?”

Email by Allanson to one of his investors

The Tribunal rejected a claim by Allanson that the email was jocular in nature and an attempt to defuse the situation. It also noted that the allegation of defamation was nonsense as Mr AL’s allegations had only been made to Allanson himself, not to a wider audience.

(Trained solicitors not understanding the basic requirements for a claim of defamation? Whatever next?)


The Tribunal found:

That Allanson’s systemic failure amounted to manifest incompetence.

The Tribunal considered whetherthe Respondent’s conduct amounted to incompetence that was so clear and obvious as to rise to the level of manifest incompetence. This was not a failure on one or two files but a systemic failure on thousands of files, funded to the tune of over £19m. The failures were basic and repeated, and the Tribunal was satisfied on the balance of probabilities that it clearly amounted to manifest incompetence.

The Tribunal also found that Allanson demonstrated dishonesty in regard to the misleading marketing material and his claims to an investor that no commission had been paid out of their investment.

The various allegations to do with failure to keep adequate accounting records were also found true.

The Tribunal found that Allanson had been motivated by financial gain, contrary to his claims of “a wish to help others”. Which in the context of a £19 million investment scheme which made not a penny in returns is a bit like finding that Casanova had a tendency to think with his wedding tackle.

As a consequence of the Tribunal’s findings, Roger Allanson was struck off as a solicitor and found liable for c. £104,000 in costs.

Allanson pleaded poverty in an attempt to persuade the Tribunal not to apply costs. He claimed that as a result of the Tribunal case he is currently working for a builder at £10 per hour, dependent on his wife, and a self-described “man of straw”.

He also made “a number of personal attacks on the integrity of various individuals involved in the preparation of the case”. The Tribunal paid no attention to his conspiracy theories, dismissing them as “unsubstantiated”.

The Tribunal rejected his plea of poverty, noting that Allanson received “unexplained” funds from his investment scheme and therefore had not proved that he could not afford the costs.

the Tribunal noted that he had received money as a result of the scheme that had not been explained. In the absence of that information the Tribunal could not conclude that the Respondent was unable to pay the costs.

Allansons LLP was put into voluntary liquidation in May 2020. Investors’ money in was reported as a debt and investors’ money out reported as an asset, meaning the liquidator is responsible for recovering any investor funds that can be recovered. (If any.) Progress reports for voluntary liquidations are due annually (unlike administrations where reports are required every six months) so the first should be due soon.

Allansons LLP delays filing accounts again

Allansons investors watching Companies House hoping for some clue as to where £20 million of their money went will have to wait a bit longer, as Allansons LLP again used the one-day-trick to avoid filing accounts within the deadline.

The Companies Act requires private companies to file accounts within nine months of their accounting year ending, but due to a loophole in UK company law, you can extend the deadline by shortening your accounting period by a single day, which gives you an extra three months.

Allansons deployed this trick in August and now again on 18 November, meaning its last published accounts are now almost two years old.

The Allansons unregulated investment scheme promised returns of 50% over 6-18 months for investing in litigation funding. Third-party introducers to Allansons claimed the investment was “100% secure with FSCS” and “Zero risk”.

The scheme collapsed after Allansons LLP was shut down by the Solicitors Regulation Authority. Allansons’ clients were told to find new solicitors. Allansons partner Roger Allanson was previously fined and banned from running his own practice by the SRA over client money breaches unrelated to the investment scheme.

Companies House has confirmed it has no policy to follow when a company ducks its duty to file accounts in a timely fashion by using the loophole.

Mirror coverage

The Daily Mirror has recently covered the scandal, focusing on sales reps who “hid behind fake names” while selling the Allansons investment.

One poor investor I spoke to has lost £60,000.

“I sold the house I owned with my former husband and was looking to invest some money,” she said.

“The Growth Market said the investment was 100% safe and I very naively thought that was true.

“They sent a lot of articles about the courts already ruling that there had been over-charging of mortgage packages and the mortgage companies had set aside millions of pounds for further cases coming up.

“They explained how they’d got this solicitor who was taking up these cases and they were worth a return of 22 to 50% on investment over six to 18 months.

“I’ve been through a very difficult divorce and have been homeless for a while with the children and was just trying to better ourselves.

“I hear on a Facebook action group I’ve joined that some people have put in £100,000 or more.”

Two members of staff listed on The Growth Market’s website are Paul Farhi (who used the name Paul Taylor) and amateur boxer Lee Roberts (using the name Lee Cannon), both of whom served as directors of firms subject to an FCA warnings for allegedly conducting regulated activities without authorisation.

The Growth Market’s website is still up, claiming to offer “investor security in the form of “Asset Backing” or “Insurance Premium” ” and “Low-risk UK-based companies working in a Government Backed Sector”.

The SRA has not yet revealed its reasons for shutting Allansons down, beyond its original notice in May which stated that Roger Allanson had committed unspecified breaches of SRA rules.

In June the SRA’s Intervention Agent informed investors that their contract was still with Allansons (which can no longer acton the cases investors were funding), that they could not offer any assurances that they would be repaid, and that it is unlikely they would be able to claim from the SRA’s Compensation Fund, as this does not cover failed investments in litigation funding.

SRA issues fraud alert to Allansons investors

The Solicitors Regulation Authority has warned investors in the stricken Allansons litigation funding investment scheme that an individual is falsely purporting to represent the SRA as part of a recovery fraud.

Allansons LLP ran a litigation funding scheme offering returns of up to 50% over a 6-18 month term, which third-party introducers claimed was “low risk” and “100% secure”. By September 2018 investors were complaining about the lack of any returns, and in May 2019 the SRA shut Allansons down.

The fraudster, who uses the name “John / Jonathan Holt”, claims to represent the SRA and that investors will get their money back if they hand over 5% of the total invested. Naturally if they hand over their 5% they will never see it again. The individual may be using other aliases.

How “John Holt” obtained the contact details of Allansons investors is unknown.

Also unknown is how Allansons investors’ contact details were also obtained by other unregulated litigation funding investment schemes who have been cold calling them.

Needless to say any approach from someone claiming that you can recover your investment X if you first pay them Y is fraudulent. If it was genuine they would just pay you X minus Y.

Reputable solicitors who actually would charge fees for taking action against a collapsed investment do not cold call, and do not claim to guarantee results.

Roger Allanson hits back at SRA shutdown of Allansons litigation funding scheme

Roger Allanson, former head of Allansons LLP, has hit back against the shut down of his unregulated investment scheme by the Solicitors Regulation Authority.

Allansons ran a litigation funding investment opportunity offering 50% returns which was, according to third-party introducers which solicited investments on Allansons’ behalf, “zero risk” and “100% secure with FSCS”.

Unregulated introducer

DirectorsIn a letter sent to Allansons investors dated 10 June 2019 and on Allansons letterhead, Allanson states:

I am extremely grateful to you for your support and faith in the funding opportunity I have given to you. Unfortunately the SRA have panicked due to the insistence of one of your number that matters are not what they seem.

Matters are and remain exactly as they were.

When he says that “Matters are and remain exactly as they were” Allanson presumably means “apart from the fact that I was banned from running my practice in late 2018 over unrelated client money breaches, and have had my certificate to practice suspended”.

Allansons originally projected that the scheme would deliver 50% returns in 6 to 18 months. The failure of Allansons to meet this timescale is blamed on the lenders stringing the cases out in court.

The lenders have not treated this exposure well and have treated the challenges like a can to be kicked down the road rather than them address the real issues in the cases. This has delayed results and that has added to the concerns that this plan has not yet borne fruit.

As yet the SRA has not yet officially stated its reasons for shutting down Allansons. When it intervened it stated “Mr Allanson, as a manager of the firm has failed to comply with the SRA Principles 2011, the SRA Practice Framework Rules 2011 and the SRA Accounts Rules 2011” but has not elaborated on these compliance failures.

Allanson claims it is because the SRA thought Allansons was too small to handle the 4,500+ cases referred to in his letter.

The SRA cite the lack of results as well as the volume of work involved in the number of cases, which they believe to be beyond the capabilities of a small outfit like mine. They have found an excuse for regulatory intervention and deludedly believe they have acted to protect the public. They have done nothing of the sort.

Allanson insists that the investment scheme is still operating, and that the cases will be passed to larger firms of solicitors.

He also states that the After The Event insurance – which is the bedrock for the claims by third-party introducers that the Allansons scheme is “zero risk” – is still in effect.

I have future-proofed matters to safeguard and ensure the fund route back at the end.

In the immediate aftermath of the Allansons shutdown, the firm that sourced clients for Allansons and analysed whether they had a case for suing their mortgage lender, Mortgage Audit Bureau, displayed this message on their website:

We have been made aware this morning (24th May 2019) of a re-assignment of cases between Allansons and Quanta Law.

This message was however swiftly removed. The MAB website now directs Allansons clients to a FAQ written by Gordons LLP, the SRA’s Intervention Agent.

Gordons LLP’s FAQ states bluntly:

If you were a client, Allansons can no longer act for you. You will need to find another lawyer to act. Gordons are not acting for you.

There is no mention on Gordons’ FAQ of any deal to take on Allansons’ clients.

Allanson finishes by attacking a “claim-farmer” called “MFN” which he says is contacting Allansons investors. Allanson denies MFN’s claims that his investors were “taken advantage of”.

This was not an operation to line the pockets of any of participants who have a role in seeing that the lenders are taken on effectively. Each of us had an important role and outsiders do not know the extent of it nor the amount of work involved nor the science behind the systems, staffing etc involved. It is mischief-making bordering on blackmail.

The letterhead includes the rather curious footer “Tidying up after the Solicitors Regulation Authority”. So far it looks like the other way round, that the Solicitors Regulation Authority is tidying up after Allansons.

This text appears where a solicitor would normally include their SRA registration details, which may explain its placement.

Allansons Solicitors shut down by Solicitors Regulation Authority

Allansons, the solicitor firm behind an unregulated investment scheme offering potential 50% returns within a 6-18 month timescale, has been shut down by the Solicitors Regulation Authority.

According to The Bolton News,

The Solicitors Regulation Authority took the decision to close Allansons Solicitors, which had been operating out of an office Queens Buildings in Central Street, after ruling that its manager, Roger Allanson, had failed to comply with a number of regulations.

A notice from the industry regulator on the door to Allansons’ office states that the firm was shut down on Friday, and that all “practice papers, files and monies held” were now in the possession of the SRA.

Roger Allanson, who late last year was banned from running his practice by the SRA over charges unrelated to the investment scheme, told The Bolton News:

“There was no dishonesty with this scheme, it was an opportunity for people who are not adverse to risk to gain a return on an investment.”

Whatever Allanson may have intended the scheme to be, “for people who are not adverse to risk” was not how the scheme was marketed by third party introducers.

Third party introducers claimed that the scheme was “100% secure with FSCS”. One introducer, Smart Investment Club, told potential investors in March 2018 that the scheme was “exposed to zero risk”. Smart Investment Club appears to have shut down – its website has been replaced by a blank WordPress template.

Allanson also stated:

“We have raised about £20,000,000 to back about 4,000 cases, and have an insurance policy if it goes wrong.

They are all grown ups who are able to make their own decisions.

This decision has been taken because they (the SRA) are worried this will collapse under their watch.”

Allanson is a prominent member of the Bolton community, who until rececntly served on the board of the Bolton Wanderers Supporters Trust.

Where this leaves the investors who invested £20 million to back Allansons’ cases on behalf of people affected by automatic capitalisation of mortgage shortfalls is unclear.

Yesterday a statement on the website of Mortgage Audit Bureau said

We have been made aware this morning (24th May 2019) of a re-assignment of cases between Allansons and Quanta Law.

At this moment we have not been provided with any further information. We hope to be able to provide more information by close of play on Tuesday (28th) through our website.

On Tuesday evening this was amended to say Wednesday 29th. At time of going to press no further information had been provided.

The cases were purportedly covered by After The Event insurance offered by Leeward Insurance in the small island of Bermuda, and it remains to be seen whether Leeward will pay out if the closure of Allansons means these cases are toast.

It also remains to be seen whether, if Leeward Insurance refuse to or are unable to pay out, and the insurance broker Box Legal also does not compensate investors, the Financial Services Compensation Scheme will step in, as was claimed by third party introducers.

My opinion? You’re more likely to see Bolton Wanderers lift the 2021/22 Premier League title.

Roger Allanson fined £17,000 by the Solicitors Regulation Authority and required to cease running his practice

Both partners of Allansons LLP, which runs an unregulated investment scheme offering returns of 50% within 6-18 months for investing in litigation funding, have been fined a combined £27,000 (plus £17,500 costs) and been prohibited from acting as managers or owners of an authorised solicitor, due to client money breaches.

Roger Allanson ran Allansons LLP as a sole practitioner until 2006, when he was joined by Mohamed Patel.

On 19 and 20 December 2018, the Solicitors Disciplinary Tribunal heard a series of allegations against Roger Allanson and Mohamed Patel in regard to their conduct over a period of six years:

  • allowing the client account of Allansons LLP to be used to administer payments in respect of debt management plans when there was no underlying legal transaction
  • allowing improper payments totalling £890.90 to be made out of the client account
  • causing or permitting a sum in excess of £600,000 representing monies paid in settlement of requests for fees for work to be undertaken by the firm to be held in Allanson’s client account and not in the office account
  • paying client money into the office account instead of the client account
  • allowing client ledgers to have an overdrawn balance
  • failing to maintain accounting records properly to show Allansons’ dealings with client and office money
  • failing to conduct client account reconciliations every five weeks
  • failing to manage his business effectively and in accordance with proper governance and sound financial and risk management principles
  • failing to provide information to the Legal Ombudsman as part of an investigation into a complaint against his firm
  • failing to respond when the SRA asked for an explanation of his conduct in failing to cooperate with the Legal Ombudsman.

Both Allanson and Patel admitted all the allegations (after initally denying the first).

The Tribunal noted that these failings occurred through “inadvertance and was not attributable to an improper motive”, and that “no loss was caused to clients as a result of Mr Allanson’s actions”.

It goes on to say however that

his actions in using his client account to administer payments were objectionable in themselves because it is no part of a solicitor’s practice to provide a banking facility to clients through the client account and this is not an activity for which he was regulated.

Allanson was fined £17,000 plus £10,000 costs. Mohamed Patel was fined £10,000 plus £7,500 costs. The tribunal’s published decision notes that Patel resigned from Allansons in 2017. Companies House however shows that Patel was re-appointed to Allansons LLP in October 2018, which is not mentioned in the decision.

As a condition of their certificate to practice for 2018/19, both Allanson and Patel must not:

  1. act as a manager or owner of any authorised body.
  2. act as a compliance officer for legal practice (COLP) or compliance officer for finance and administration (COFA) for any authorised body.
  3. hold, receive, or have access to the client money, or act as a signatory to any client account, or have the power to authorise electronic transfers from any client or office account.

These restrictions were imposed in September 2018, with a three month stay in Allanson’s case (presumably to give him time to step down, whereas Patel had by that time already resigned). Due to these conditions already being in place at the time of the Tribunal’s decision, the Tribunal did not impose a further Restriction Order.

Where these restrictions on Roger Allanson’s ability to run his practice leaves the investment scheme run by Allansons is unclear.

At time of writing, Roger Allanson remains the sole person identified as a Partner on Allansons’ website, and Companies House still identifies Allanson as having a 50-75% controlling stake in Allansons LLP.

Is Allansons / Mortgage Audit Services litigation funding covered by the FSCS?

Earlier today we reviewed the Allansons / Mortgage Audit Services opportunity to invest in litigation funding.

Allansons / MAS project a potential return of 50% should their cases succeed, and your money back if it fails via After The Event insurance – assuming that Leeward Insurance of Bermuda, the ATE insurer, agrees to pay the claim and has sufficient resources to do so.

Allansons’ / MAS’ literature is clear that this investment is not covered by the Financial Services Compensation Scheme.

However, there are unregulated third party introducers promoting this investment as “High Returns with insurance and FSCS protection” and claiming that – via convoluted logic which we will review below – that the investment is covered by the FSCS, contrary to Allansons’ / MAS’ literature.

Unregulated introducer

Allansons / Mortgage Audit Services cannot be held responsible for how unregulated third party introducers promote their investments, hence this point is being covered in a separate blog post to the opportunity itself.

FSCS Box LegalThe justification for the investment being promoted as FSCS-protected is shown above. This appears to be from a “terms & conditions” document but I have not had sight of the full document and do not know where it has come from beyond the unregulated introducer who emailed the above extract to a member of the public as part of their promotion.

In brief, what this extract says is that:

  • Box Legal rightBox Legal has reviewed Leeward’s structure, finances etc, and will continue to do so, and has determined that there is no realistic prospect of Leeward failing to pay any claim.
  • And that if Leeward fails to pay any claim, Box Legal “irrevocably accepts that it will have rendered negligent advice to the solicitor and thereby also to the Client, and agrees to be responsible to both the Solicitor and the relevant Client for all losses and claims arising out of that negligent advice”.
  • And that as Box Legal is regulated by the FCA (not the Financial Services Authority – this was replaced by the FCA five years ago), its advice is covered by the FSCS.

This is a commendably imaginative way of attempting to provide FSCS cover for an investment offering potential returns of 50% over 6-18 months. However, it doesn’t work.

Essentially Box Legal claim that by inserting this clause about how they “irrevocably accept… to be responsible to both the Solicitor and the relevant Client for all losses and claims, including the non-payment of any valid claim” they have unilaterally shifted the risk from the investor onto the FSCS.

Unfortunately, it is not possible to dump liability on the FSCS by inserting clauses in contracts with words like “irrevocably accept”. Whether the FSCS is liable for a loss is governed by the definition of a “protected claim” found in the FCA’s COMP handbook.

If this approach worked, any financial adviser could write to their client saying that they “irrevocably accept that I will be liable if your investment goes down” and by doing so shift the investment risk from the client to the FSCS, while giving the client all the return if the investments go up. This would make them the most popular financial adviser in the country. But no adviser does. Why?

Box Legal would presumably say “because they weren’t clever enough to think of this”. The real reason is that saying “I irrevocably accept that I will be liable if your investments go down” or “I irrevocably accept that if this insurer goes bust I will be liable” and then failing to pay up is not a protected claim under the regulations governing the FSCS.

Box Legal wrongAdvice is defined by the FCA as the provision of “personal recommendations to a client, either upon the client’s request or at the initiative of the firm, in respect of one or more transactions relating to designated investments”. The statement by Box Legal above is not a personal recommendation by any stretch of the imagination. Allansons / MAS investors are not all meeting with Box Legal to have a fact-finding exercise conducted and they are all being insured by the same insurer, so clearly Allansons / MAS investors are not all being provided with a personal recommendation to take out insurance with Leeward Insurance.

What Box Legal has done is broker the insurance contract, and insurance brokers are not automatically liable if their chosen insurer goes bust, any more than an investment adviser is liable if your investment falls.

Box Legal’s statement is in fact contradictory. The fact that they have “investigated and reviewed Leeward’s structure, management; claims payment record and finances…” means that even if Leeward fails, they will not have rendered negligent advice. Negligence would have occurred if Box Legal had brokered the insurance contract with any old insurer from a small island in the Atlantic and not paid any attention to that insurer’s capacity to pay. But Box Legal are specifically saying that they aren’t being negligent. If Leeward subsequently goes bust for reasons that Box Legal could not reasonably have foreseen when reviewing its structure and finances, Box Legal has not been negligent.

By irrecovably undertaking to recompense investors should Leeward Insurance fail, Box Legal may well be creating a legal obligation to do so that would stand up in a court of law. However, what it is not doing is creating a protected claim for the FSCS.

We do have to say that Box Legal’s claim is not a million miles away from the fact that people who are advised by an FCA-regulated adviser, who advises them to invest in unregulated investments, do get compensation from the FSCS when the investment goes bust and so does the adviser.

Same thing here, right? Regulated advice firm gives advice relating to unregulated investments, investments go bust, consumers must have their losses restored by regulated firm, regulated firm goes bust, FSCS must restore investors’ losses instead.

There are two problems with assuming the same will happen here. Firstly, advice to invest in unregulated investments is covered up to £50,000 only, so the FSCS’ liability is limited. Here, Box Legal are claiming that as insurance advice, investors are covered up to 90% of the claim, so the FSCS’ liability is virtually unlimited.

Secondly, as covered above, investors are not in reality being provided with personalised advice by Box Legal. Unlike in cases where a regulated adviser recommends that someone invests X amount of money in an unregulated investment, which is clearly personalised advice and is a protected claim.

(Note: the discrepancy between Box Legal’s claim that the FSCS will cover 90% of the investment and the unregulated introducer’s claim that clients’ money is “100% secure” is not explained. But frankly, if investors are only risking a 10% loss for investing in an unregulated product offering 50% returns over 6-18 months, who cares.)

This is our interpretation. Box Legal will no doubt disagree. Investors should bear in mind that the FSCS only decides whether a loss is a protected claim or not at the point a claim is made to the FSCS. By this time, it is too late for investors to back out. They should not expect the FSCS to state in advance whether they will be protected if the litigation funding investment goes south.

To the best of our knowledge, no company prior to Box Legal has attempted to secure FSCS compensation for an unregulated investment in this particular way, and had investors successfully claim losses from the FSCS. Equally, neither has any such claim failed. So Box Legal’s interpretation of the rules is untested, as is ours.

We will reiterate that these claims regarding Financial Services Compensation Scheme coverage were made by an unregulated introducer, who is also the source of the literature shown at the top of this article. They were not made by Allansons or Mortgage Audit Services Limited, who cannot be held responsible for how third party introducers describe their investment. 

FSCSAllansons / Mortgage Audit Services states in their literature  that this investment is not covered by the FSCS, and we agree with them.

Should I invest with Allansons / Mortgage Audit Services litigation funding?

This blog does not provide financial advice. The following are statements of fact based on publicly available information, or near-universally accepted investment principles; they are not personalised recommendations. Investors should consult a regulated independent financial adviser if they are in any doubt.

As with any unregulated investment, there is potential for up to 100% capital loss should Allansons’ cases against mortgage lenders fail, Leeward Insurance fails to pay out, and the FSCS refuses to consider Box Legal’s “irrevocable undertaking” as a protected claim.

Unregulated investments with potential for 100% capital loss are only suitable for sophisticated and/or high net worth investors who have a substantial existing portfolio.

If you are looking for an investment that provides “100% security” or FSCS protection, you should not rely on novel and untested interpretations of the FSCS compensation rules, and you should not invest in unregulated products with a risk of 100% capital loss.


Box Legal has been in business for nearly 15 years according to Companies House.

In the last accounts (to 31 August 2016) the auditors (UHY Hacker Young) stated:

Emphasis of matter – Going Concern

In forming our opinion on the financial statements, which is not modified in this respect, we have considered the adequacy of the disclosure made in accounting policy 1.2 to the financial statements concerning the company’s ability to continue as a going concern. The company has fallen short of certain regulatory requirements relating to compliance with the FCA rulebook during the year and as at the year end date. Whilst the implications of these instances of non-compliance are uncertain the directors believe they will be resolved without financial impact and have therefore continued to adopt the going concern basis in the preparation of the financial statements.

These conditions indicate the existence of a material uncertainty which if resolved unfavourably (despite the Directors view that this is unlikely to be the case) have the potential to cast significant doubt over the company’s ability to continue as a going concern.

It should be noted that many financial firms fall foul of the FCA rulebook with no lasting consequences. In a later note Box Legal’s failure to comply with regulatory requirements is described as relating to “holding client money and other areas of compliance”. This may well result in nothing more than a fine and/or an instruction from the FCA to improve their client money procedures. In general, we have no reason to doubt the directors’ belief that there will be no financial impact.

However, given that unsophisticated consumers are being told that this investment is “100% secure with FSCS”, which rests on Box Legal’s novel and untested interpretation of FSCS compensation rules, which is part of the FCA rulebook, investors should be aware that Box Legal has previously been tripped up by other parts of that rulebook.

Allansons / Mortgage Audit Services Litigation Funding – approximate 50% return within 6 to 18 months

Allansons, in association with Mortgage Audit Services Limited, are offering investors the opportunity to invest in “litigation funding” whereby investors fund the cost of legal action on behalf of a mortgage customer who has been overcharged by their lender due to “automatic capitalisation” of payments in shortfall.

Should the case succeed, Allansons promises a return of 5% of any award plus 30% of Allansons’ base legal fees, which they estimate will provide a return of “approximately 50% on your money within 6 to 18 months.”

Should the case fail, Allansons promise that your investment is covered by After The Event insurance.

The investment is not promoted on Allansons’ website (and Mortgage Audit Services does not appear to have a public presence) but unregulated introducers have been promoting the investment to members of the public without proof that they are sophisticated or high net worth investors, one of whom passed the details to us.

Who are Allansons LLP?

DirectorsAllansons claims to have been established in 1993. Allansons LLP was only incorporated with Companies House in 2008, but this is explained on Allanson’s website which states that the business was originally a sole practitioner, went on to purchase several other solicitors and converted to a limited liability partnership in 2008.

Allansons is a Limited Liability Partnership with two partners: Roger Allanson and Mohamed Patel. The Partnership had net assets of £98,000 according to their last accounts filed November 2016; as a small company they did not have to audit the accounts or include a profit and loss statement.

Who are Mortgage Audit Services?

Mortgage Audit Services was incorporated in November 2015. It has yet to file accounts as an active company; its only previous accounts in November 2016 were filed as a dormant company. It is owned 72%/28% by the directors Bryan Turner and Charles Haynes.

How safe is the investment?

This is an unregulated investment and if Allanson fails to win the case, and the insurer does not or cannot return your initial capital, you risk losing 100% of your money.

We are not legal experts and cannot comment on the specific merits or otherwise of Allansons’ cases, but it is a truism that no case is guaranteed to succeed in court. Allansons say they “expect to win” and say “The audit report that we use in these breach of mortgage contract claims has been given a 75% chance of success in court” but it is the judge that decides.

If the case fails, Allansons / MAS claim that an insurer providing After The Event insurance, Leeward Insurance, will step in and return investors’ money.

However investors are still at risk of losing money if:

  • Leeward Insurance does not pay out (e.g. because an exclusion in the insurance contract applies)
  • Leeward Insurance has insufficient resources to return investors’ money

Leeward Insurance is based in the offshore tax haven of Bermuda. There is virtually no public information available on Leeward Insurance.

FSCS(I have seen evidence that unregulated introducers are promoting this investment while claiming that the insurance payouts are protected by the Financial Services Compensation Scheme. However, this claim is not made by Allansons / MAS but by unrelated third parties, and will therefore be reviewed in a separate blog post. Allansons / MAS’ literature carries a very clear risk warning that the investment is not protected by the FSCS.)

Should I invest in litigation funding with Allansons / Mortgage Audit Services Ltd?

This blog does not provide financial advice. The following are statements of fact based on publicly available information, or widely accepted investment principles; they are not personalised recommendations. Investors should consult a regulated independent financial adviser if they are in any doubt.

As with any unregulated investment, this investment is only suitable for sophisticated and/or high net worth investors who have a substantial existing portfolio and are prepared to risk 100% loss of their money.

Any investment promising returns of 50% between 6 and 18 months is clearly very high risk in nature.

Before investing investors should ask themselves:

  • How would I feel if the case failed, the insurer did not pay out and I lost 100% of my money?
  • Do I have a sufficiently large portfolio of investments that the loss of 100% of this investment would not damage me financially?
  • If I am placing any reliance on the insurance contract with Leeward Insurance, have I conducted sufficient due diligence to ensure the insurance contract is watertight, and that Leeward Insurance has sufficient resources to return investors’ money?

If you are looking for an investment that provides “security”, you should not invest in unregulated products with a risk of 100% capital loss.


In 2010 the Financial Services Authority (now the Financial Conduct Authority) introduced a regulation stating that if a mortgage customer falls behind with their repayments, the mortgage lender should not automatically add the shortfall into the calculation of their repayments – thereby increasing the amount the customer had to pay when they were already struggling to afford the original amount.

Some mortgage lenders have carried on with this practice regardless, and Allansons is seeking investors’ money to allow these customers to sue their mortgage lender for the amount they have been overcharged.

One thing that is unexplained in Allanson’s literature is why people who have been the victim of automatic mortgage capitalisation need legal funding in the first place. In April 2017, the FCA wrote to mortgage lenders instructing them to “review whether they have… automatically included payment shortfalls in their CMI calculations; if they have, review whether this practice has caused harm to customers… if so, assess and provide appropriate remediation”.

In other words, as with PPI and 1990s pension misselling, mortgage lenders are required to proactively find out if their customers have been the victim of this practice, and if so, offer them redress, without waiting for the customer to complain.

If the mortgage lender fails to do this, the customer can complain directly to the mortgage lender. If the mortgage lender still fails to offer redress, the customer can take their complaint to the Financial Ombudsman, a simple process which by design does not need legal assistance.

It would be possible for Allansons to handle a customer’s complaint to the Ombudsman on their behalf, but the rewards for doing so would be limited to a cut of the customer’s compensation; the Ombudsman does not award legal costs. This would certainly not generate a 50% return to investors.

Nowhere in the literature does it explain why mortgage customers should take their lender to court when they have the option of going to the Financial Ombudsman.

Indeed, judges now generally expect people to attempt alternative dispute resolution (ADR) before going to court; the Financial Ombudsman is one of those means of alternative dispute resolution. So if a customer takes their mortgage lender to court instead of going to the Ombudsman, there is a significant chance the case would be thrown out.

However, we reiterate that we are not legal experts and cannot comment on the legal merits of Allansons’ potential cases.

What is a matter of objective fact is that a) if the case does not succeed and Leeward Insurance does not pay out, investors will lose up to 100% of their money b) unregulated investments with potential to lose up to 100% of investors’ money are only suitable for sophisticated or high net worth investors as a small part of their portfolio.