‘Dramatic' claims against the Financial Ombudsman Service are unlikely to rock the foundations of the scheme, says chief ombudsman Walter Merricks.
In the latest edition of ombudsman news, Merricks says "judicial review" suddenly appears to be “flavour of the month”, as not a week goes by without someone announcing a legal challenge to the Fos’s decisions or procedures.
One recent case involved a challenge by CPH Financial Advisory Services about a couple whose endowment case against Friends Provident was time-barred.
The challenge resulted in the time-bar rule being overturned and the Fos was accused of changing its policy because of the threat of judicial review and opening the floodgates to more time-bar decisions being overturned.
But Merricks says press releases issued to announce and describe the challenges made against the Fos often promise “rather more dramatic consequences than are seen in the actual proceedings themselves”.
He states: “We are regularly accused of – at one and the same time – being above the law and unchallengeable; being engaged in a disgraceful denial of human rights that a landmark test case will bring to a halt; suffering a stunning in the courts that will save the financial services industry millions of pounds; and outrageously allowing firms to wrongly escape paying millions to consumers with financial complaints.”
Merricks says such dramatic claims are “hardly surprisingly unlikely in reality to rock the foundations of the ombudsman service”.
He points out no public organisation involved in the business of handling disputes is immune from people wanting to test the limits of its remit, particularly as there are always commercial interests at stake.
For example, claims-handling companies have a business interest in maintaining the flow of complaints and lawyers seeking to attract business from financial firms will put an optimistic spin on what they might achieve.
Merricks adds: “So if all this provides the courts with opportunities to clarify definitively some aspects of our scheme, we will all be the wiser. And once that’s done we might look forward to spending less time, and less of the industry’s money, on lawyers.”
Have your say: Alan Lakey is managing director at Highclere Financial Services, says:
What a nerve. Walter Merricks is fast becoming a laughing stock as he seeks to justify the ability of the Fos to ride roughshod over the legal rights of firms by ignoring UK law, failing to be accountable to the industry or parliament (as he has confessed), and continuing to make new law (as he has confessed).
Fos continues to apply inconsistency and injustice and has no place in a mature financial services market.
As he continues to strive for a knighthood FOS continues to pursue frail, retired ex-advisers who often have little recollection of the events in question. This pursuit continues after death when the widows of advisers are chased for compensation and/or FOS case fees.
By continuing to deny firms the safety of the 15 years longstop, as enshrined in the Limitation Act 1980 as amended by the Latent Damages Act 1986, FOS persists in causing injustice to firms.
He should resign.
Have your say: Derek Frost, IFA at the Melia Partnership in Epsom, Surrey, says:
I found this paragraph highly illuminating in your article yesterday, where "Merricks adds:
"So if all this provides the courts with opportunities to clarify definitively some aspects of our scheme, we will all be the wiser. And once that's done we might look forward to spending less time, and less of the industry's money, on lawyers."
Would one be wrong in feeling that there is an ‘agenda’? His admissions previously that they are "creating their own law" would certainly indicate that he is revelling in this. Methinks a tumble would be appropriate?
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Emily Perryman on 020 7968 4554 or email [email protected].
First mentioned in Cridland Report
Second acquisition of 2019
Guy Opperman has rejected calls to speed up changes to auto-enrolment (AE) despite increasing pressure to boost contribution rates and overall savings pots.
Four key areas to focus on
And 94% for critical illness