The Court of Appeal has upheld an appeal from the High Court
decision in Clark v In Focus that Financial Ombudsman
Service ("FOS") decisions are not binding on the
claimant. This gives firms some degree of certainty. Once they have
paid compensation as directed by FOS, they will not then be open to
further challenge in the courts in relation to the same facts.
The maximum compensation FOS can award is £150,000 (it was
£100,000 at the time of the Clark complaint)
regardless of the size of the alleged loss. It had generally been
assumed, until the High Court decision in Clark, that if
the claimant accepted the compensation awarded by FOS then that was
an end to the matter. The upshot of the High Court decision was
that claimants were able to bring an initial complaint to FOS at no
charge and with no risk as to costs and then use the compensation
awarded by FOS to fund a subsequent challenge in the courts for
outstanding losses.
