Sovereign Guernsey “went to sea, knowing they had a hole in the boat,” and mismanaged the pilot’s trust.

It has been reported that legal action is underway between a group of pilots and Sovereign Trust (Guernsey) Limited (Sovereign), which has reached the courtroom, with the case being heard in Guernsey this week.

Sovereign is facing allegations of negligence and breach of duty.

• The lawsuit revolves around the pilots’ financial investments in a Loss of Income Protection Scheme, which Sovereign Trust (Guernsey) Limited inherited.
• The applicants’ case is that Sovereign had ignored advice around managing the fund, expanded liabilities, and left contributions unchanged, undermining the Trust’s sustainability.

The pilots were all based in Dubai, with the Trust Fund essentially serving as their financial safety net if they faced losing their licence to fly due to medical reasons. 

Sovereign acquired the trust in 2015. 

The key claims:

• The pilot’s claim is built on the idea that Sovereign “mishandled” the contribution rates and continued to utilise and implement “unnecessary benefits”. 
• The pilots also claim the fund was underfunded, with accusations that the firm “went to sea, knowing they had a hole in the boat”. 
• The pilot also claims that the Sovereign is intentionally slowing down the court process, thereby drawing out the case and increasing the costs for those taking the company to court. Lawyers for the plaintiffs claimed they were using this as a “tactic”. 

Arguments from Ogier, representing the pilots, were heard on the first day in court, with the plaintiffs laying out their stall, ready for rebuttal from Sovereign.

Sovereign is contesting the courtroom challenge from a group of pilots, who claim the firm mismanaged their money.

• https://www.bailiwickexpress.com/news-ge/pilots-lodge-lawsuit-against-guernsey-trust-company/

Sovereign has said it “strongly denies the allegations” and will defend itself.

• https://www.bailiwickexpress.com/news-ge/sovereign-strongly-denies-pilots-allegations/

In court, in the opening claims from the Plaintiffs, it was alleged that the Sovereign.

• That despite warning signs from official reports, the firm refused to take any action to steady its ship. Instead, it continued operating even while knowingly losing money each month.
• “Ignored” expert reports on the fund’s efficacy and warning signs that not enough cash was flowing in to sustain it. 

The case is expected to continue throughout the week.

Sources

• https://www.bailiwickexpress.com/news-ge/sovereign-strongly-denies-pilots-allegations/
• https://www.bailiwickexpress.com/news-ge/pilots-lodge-lawsuit-against-guernsey-trust-company/
• https://www.bailiwickexpress.com/news-ge/sovereign-went-to-sea-with-a-hole-in-their-boat-argues-lawyer/