Male and female having conversation on bridge.

FOS in focus

14 February 2014

The Court of Appeal confirmed this morning that a FOS complainant with an award at the statutory maximum of £150k cannot sue for the balance of their losses in Court.

If they accept the Ombudsman's award, it is final and binding.  If they want to recover all of their losses, they must reject the award and sue in Court.

Although we expected this outcome, the Court's decision will come as a relief to financial services firms facing large and complex claims at FOS which is, after all, a tribunal designed (by statute) to be quick and informal.  It confirms the separation of the two parallel jurisdictions - the inherent jurisdiction of the Courts and the statutory jurisdiction of FOS.  A complaint or claim cannot run in sequence from one to the other.

The key takeaway point to note is, for me, that the Court rejected the suggestion that the statutory scheme should be 'purposively' interpreted in favour of consumers.  This was wrong because if Parliament had intended consumers to be placed in some different position to other litigants it should have said so.  FOS must act impartially.  It is for the FCA to pursue a consumer-protection agenda.

For a fuller analysis of the issue and decision, see Rob Morris' Legal Alert.