From the bench: when is financial advice too risky to give?

On September 15, the Court of Appeal (Civil, Inferior) pronounced its judgment in case 62/2019 LM involving two investors as plaintiffs against the investment company Crystal Finance Investments Ltd. This judgment was given upon an appeal application by said company as it disagreed with the first instance judgment given on June 12, 2019, by the arbiter for financial services.

Initially there were two separate cases against the investment company in front of the arbiter, by which the investors claimed that they lost two separate amounts of €16,000 and €12,000. The investors asked the arbiter to declare the investment company responsible for such a loss and to refund said amounts by way of compensation. The compensation decided for by the arbiter and confirmed on appeal was of €8,920.27 (for the investor claiming €16,000) and €6,933.81 (for the investor claiming €12,000).

The arbiter had found in favour of the investors and the Court of Appeal confirmed such a finding in full, stressing that the investors had acted on the basis of advice sought from and given by the investment company. This advisory relationship is central to the arguments and findings of the arbiter, as confirmed...