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ARTICLE · 22 MARCH 2013

The Financial Ombudsman Service - A Launch Pad For Litigation?

SJ Berwin LLP
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A recent High Court decision has opened the gateway for consumers to bring claims in relation to disputes for which they have already received compensation via a Financial Ombudsman Service award.

United KingdomLitigation, Mediation & Arbitration
Rachel Couter
Rachel Couter
Lucy Kerr
Lucy Kerr

A recent High Court decision has opened the gateway for consumers to bring claims in relation to disputes for which they have already received compensation via a Financial Ombudsman Service ("FOS") award.  The previously accepted position was that once a FOS award was accepted by a consumer it was final and binding on the parties and no further claims could be brought. This case has changed the status quo; making the position unclear, such that financial services firms should be prepared for claims to reappear even after they make a payment to settle the matter through the FOS.

The case in question, Clark v In Focus Asset Management1, relates to financial advice given to the complainants, which the FOS agreed was inappropriate and awarded the statutory maximum compensation (then £100,000, now £150,000) along with a recommendation that the firm should pay a further amount to satisfy the complaint.  The complainants accepted this award, subject to a

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