Bruce, R (on the application of) v Financial Ombudsman Services Ltd & Ors

The Financial Ombudsman Service’s investigation is not divided into a mandatory three-stage process requiring separate representations at each stage. Once a complaint is accepted as eligible and an investigation is necessary, the investigation encompasses the stages before final determination. The parties must have a fair opportunity to make representations, including on any provisional assessment.

Natural justice is satisfied where the responsible partnership has proper notice and a genuine opportunity to respond, even if one former partner does not personally participate. Judicial review should not be ordered merely because an individual partner was not involved, without some evidential basis that a re-investigation could produce a different result.

The claimant, a former partner of Bruce & Partners, sought judicial review of a Financial Ombudsman Service determination requiring the former partners to pay compensation for pension mis-selling. She argued that she had not received the relevant correspondence, had not been given an opportunity to make representations, and that the determination breached natural justice and the DISP rules.

The ombudsman had sent the provisional assessment and loss assessment to the claimant and other former partners, although the claimant apparently did not live at the address used. The central issue was whether the investigation and determination were procedurally unlawful.

1. Claim dismissed. The ombudsman’s determination was not unlawful and there had been no breach of natural justice warranting judicial review.
2. The statutory scheme under Financial Services and Markets Act 2000, Part 16 and Schedule 17, is intended to resolve eligible disputes quickly and with minimum formality. The DISP rules do not create the separate three-stage process suggested by the claimant. The investigation covers the stages of considering the complaint after eligibility has been accepted and before final determination.
3. DISP 3.2.11 required the ombudsman, during the investigation, to give both parties an opportunity to make representations and to send a provisional assessment stating reasons and a time limit for response. The service had given Mr Allsopp and Mr David Bruce opportunities to respond before and after the provisional assessment. The partnership was therefore aware of the investigation and had a proper opportunity to identify relevant issues or persons.
4. Although the claimant herself appeared not to have received the correspondence because it was sent to an address where she did not live, that did not justify relief. The former partners were jointly and severally liable, and no substantive challenge to liability or the assessment had been advanced. There was no evidential basis for concluding that a re-investigation might produce a different decision.
5. A late witness statement from Mr David Bruce was rejected as fresh evidence. It was irrelevant, based on a misconceived comparison with a different pension-transfer complaint, and should have been raised earlier.
6. The claim was dismissed. The claimant was ordered to pay the defendant’s costs of £8,272.50. A further £250 was ordered in respect of Mr Henderson’s attendance and expenses.

The judgment describes permission for judicial review being granted on 6 December by Kenneth Parker QC, sitting as a Deputy High Court Judge. The Administrative Court then determined the substantive claim.