FOS goes to court and it does not all go well

A recent quartet of cases involving the Financial Ombudsman Service have highlighted instances of the scheme failing to perform its inquisitorial function properly, as well as tensions between its complaint assessment function and the legal system. There are lessons for FOS to absorb in relation to staff training and case-handling, opines Adam Samuel.

Adam SamuelBA LLM DipPFS MCISI FCIArb Certs CII (MP&ER) Barrister and Attorney may be contacted atadamsamuel@aol.com.For links to where you can buy the second edition of 'Consumer Financial Services Complaints and Compensation', seewww.adamsamuel.com/writing.

The first half of 2023 has produced a bumper crop of four court cases about the Financial Ombudsman Service: Moniak, Shop Direct, Hogan and Shawbrook. [1] Two (Shop Direct and Shawbrook) illustrate some of the more complex aspects of consumer financial services dispute resolution. [2] Two (Moniak and Hogan) and arguably three (Shawbrook) shine an unattractive light on how FOS goes about its business. [3] Two should have led the Financial Conduct Authority to take action against the firms involved for giving FOS tainted or edited files, even though the ombudsman found in their favour on both occasions (Moniak and Hogan). All demonstrate the tension that occurs when a legal system and law focused on right answers come face-to-face with an ombudsman scheme that was never designed that way. This involves a consideration of how broadly judicial review should interfere with FOS's decisions, a subject still being worked out.