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.
The Court of Appeal has reversed this, confirming that: "FOS awards, once accepted, are binding on the claimant. A claim based on the same facts cannot then be re-litigated in the courts."
Click here for the Court of Appeal judgment in Clark
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