The High Court has allowed businessman Donal Carey to amend his statement of claim in a dispute over alleged losses from investments in shares and contracts for difference (CFDs). The court did not decide whether the defendants breached any duty or whether Carey is entitled to damages.
In a judgment delivered on 27 October 2021, Mr Justice Garrett Simons granted leave to add claims based on the Investment Intermediaries Act 1995 and the EC (Markets in Financial Instruments) Regulations 2007. He directed Carey to deliver the amended claim within 28 days after the order is perfected. Cantor Fitzgerald Ireland Ltd, the second defendant, must deliver an amended defence within 28 days after that.
The proposed amendments concern allegations about the handling of Carey’s investment account and his suitability for trading CFDs. The judgment summarises the pleaded case, rather than making findings on disputed events. Carey alleges that Dolmen Stockbrokers failed to assess his experience, financial position and investment objectives properly, and that information in application forms was inconsistent. He also alleges that he lost €901,380 in the first trading year.
The judgment records that Carey’s February 2011 account application described him as a “risk taker” and showed no CFD experience, while also stating five years’ experience. He later signed a letter saying he considered himself suitable to trade CFDs and understood the risks. The court noted that the legal effect of those documents remains disputed.
Cantor Fitzgerald Ireland opposed leave on the ground that the proposed claims were bound to fail. It argued that the 2007 regulations did not provide a right to damages for the 2011 transactions and that the Investment Intermediaries Act did not apply to investment firms after the 2007 regulations took effect. It also relied on the account documentation.
The judge held that those arguments did not establish that the proposed claims must fail. Whether a damages action existed under the 2007 regulations in 2011, and which regulatory regime applied to Dolmen Stockbrokers, are questions for the trial judge. The court also said it was premature to decide how far the signed documents could answer the regulatory claims.
The ruling concerned permission to amend pleadings. It did not determine liability, the amount or entitlement to damages, or the truth of Carey’s allegations. Separate motions for discovery and further particulars had been adjourned pending the amendment decision.
The judge’s provisional view was that Carey should recover two-thirds of his costs of the amendment motion. Either party may seek a different costs order by filing written submissions within three weeks of the judgment.