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Duty of Care: Susan Field v Barber Asia                                                                                                        
 
Product Ref: 05/266C Company: N/A

Product Type: Case Industry: Banks & Diversified Financials

Related Product(s): Teaching Note
Authors: P.S.Tso   Monica Park
In 2003 Susan Field, a British citizen living and working in Hong Kong, won her case against Barber Asia Ltd, a private financial advisory firm. Ms. Field filed a complaint against Barber Asia claiming she lost a significant amount of money owing to investment advice she received from her financial advisor, Andrew Barber. Ms. Field won her case based on the argument that she was clear from the outset she wanted to invest conservatively; in spite of this, Mr. Barber advised her to move her money into a high risk investment scheme that resulted in her substantial loss. Mr. Barber argued that Ms. Field increased her appetite for risk over the course of their dealings and that he recommended investments appropriate to her needs as he understood them. The judge found that Mr. Barber did not violate professional standards as written, but that he did violate a professionalˇ¦s duty of care when he advised his client to enter into a scheme that did not suit the client's desired level of risk. The Field v Barber Asia Limited decision was the first time in Hong Kong a financial advisor was held liable for giving negligent advice. The gravity of the situation rested on the fact that Ms. Field, a relatively inexperienced investor who desired a low risk strategy, was advised to enter into a risky scheme unsuited to her stated objectives. The High Court concluded Mr. Barber should compensate Ms. Field for her loss because his actions breached a duty of care to his client. What message does this ruling send to financial professionals in Hong Kong? Are there indications of a problem at the regulatory level?
Functional Area : Finance & Investments

Issues: Financial advisors, investment advice, negligent advice
Length: Text: 6 pages
Exhibits: 5 pages
Country: Hong Kong SAR

Pub. Year: 2005 Level of Difficulty: 1
         
This product type is available in the following language(s):      English   Simplified Chinese
         
Related Information: N/A
 
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