In December 2000, the claimant sought advice from its bank in relation to potential investments. Based on the advice received, the claimant, who was at the time experienced in investing in financial assets but had not yet invested in the media industry and film funds, decided to subscribe to the relevant fund as part of his retirement scheme.

When the fund didn’t perform as anticipated and the claimant suffered a total loss of his investment, he brought damages claims against the bank on grounds he had been assured, both verbally and by reference to the sales brochure he received, that losses were capped at roughly 22%. However, the full prospectus relating to the fund investment specifically stated that the film industry is the oil industry of the 21st century and that investments can result in high profits but also total losses, but that the fund sought to counter losses by entering into insurance contracts.

The Court held that the investment advice of the bank had not been object-oriented because they had not provided any additional substantive information in the investment advice conversation than the one already (incorrectly) set out in the sales brochure. However, in the event of a wrong sales brochure, the Court held that the bank can only prevent liability if it explicitly advises on the possibility of a total loss of the investment, if this is indeed the worst case scenario. The fact that the sales brochure had been provided to the bank by the fund does not have an impact on the liability of the bank. If a bank exercises distribution functions and distributes funds, the Court held that this bank: