Self-invested personal pensions (Sipp) provider Berkeley Burke Sipp Administration Limited has decided not to appeal the court ruling which ordered it to pay £1m to people affected by unregulated investments.

The court found that the firm had accepted high-risk unregulated investments into its Sipp schemes and ordered the pay outs, which led to the company falling into administration.

The appeal was due to go ahead on 15 and 16 October, but the decision was taken by the administrators that it would not appeal the ruling, despite securing more than £100,000 in legal funding.

The £100,000 would have covered Berkeley Burke’s own costs for a two-day Court of Appeal hearing but would not have covered the total potential legal costs for both itself and the respondents, if the appeal was unsuccessful.

Berkeley Burke Group distanced itself from the ruling, saying: “The decision not to proceed with the appeal has no bearing on the ongoing running of the fully regulated activities of the independently owned and operated Berkeley Burke Group and the careful management of its client business in compliance with the group’s fiduciary duties.

“Berkeley Burke Group is independent from and has no financial stake in the company in administration.

“The Berkeley Burke Group continues to trade profitably and as normal and manages its day-to-day business and the wider Berkeley Burke group of companies in full compliance with its requisite regulatory duties.”

It is understood that Berkeley Burke Sipp Administration Limited in administration has significant cash reserves which are being managed on behalf of creditors, the largest of which is potentially the Financial Services Compensation Scheme, which has been fully engaged as a stakeholder in the administration process.

Commenting, APJ Solicitors lawyer, Glyn Taylor said:" Sipp provider, Berkeley Burke has dropped the appeal case which was scheduled for this month, due to insufficient funds for the total potential legal costs, if the firm was to lose the case.

“The news means the original Financial Ombudsman Service (FOS) decision stands and sets an industry-wide precedent as Sipp companies will be bound by the argument of whether it ensured due diligence for its customers.

“Many in the industry had been waiting to hear the outcome of the appeal case, as other Sipp providers that have a high number of complaints and sold its books, may try to follow the same process as Berkeley Burke. However, now the decision will be upheld, it will be very difficult for Sipp providers to challenge the FOS in regards to the issue of due diligence.

“This is great news for any claimants, providing clarity and conclusion to anyone who has had an ongoing case against Berkeley Burke, which has been on hold for the last two years.

“Claimants will still be able to pursue their claims through the Financial Services Compensation Scheme (FSCS), where they will be able to potentially claim back up to £85,000.”

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