Brinsons (a firm), R (on the application of) v Financial Ombudsman Service Ltd.

The claimant sought judicial review of the Financial Ombudsman Service's decision of 18 September 2006 that it had jurisdiction to hear a mis-selling complaint brought by former clients. The central legal question was whether the claimant was "subject to a former scheme" immediately before commencement of section 19 of the Financial Services and Markets Act 2000 (1 December 2001) for the purposes of paragraph 3 of the Financial Services and Markets Act 2000 (Transitional Provisions) (Ombudsman Complaints Scheme) Order 2001. The court held that, on a proper construction of the Personal Investment Authority's rules (notably rule 1.9.4 read with the complaints chapter), obligations to co-operate in investigations and adjudications survived resignation or termination of membership. Consequently the claimant was within paragraph 3(a) of the Order and the Ombudsman had jurisdiction. The application for judicial review was dismissed. The court also rejected the defendant's contention that the claim was premature.

The claimant firm (a firm of chartered surveyors and estate agents) had arranged a mortgage-linked endowment policy for clients (Mr and Mrs Pullen) in 1992. The clients later complained that the policy had been mis-sold and referred the matter to the Financial Ombudsman Service (the defendant) after the claimant rejected the complaint. The defendant informed the claimant on 18 September 2006 that it had made a final decision to assume jurisdiction.

Nature of the claim/application: the claimant sought judicial review of the defendant's decision to assume jurisdiction in relation to a complaint made after commencement of the 2000 Act but relating to conduct before commencement; the claimant argued it was not "subject to a former scheme" immediately before commencement and so paragraph 3 of the Transitional Provisions Order did not bring the complaint within the Ombudsman's compulsory jurisdiction.

Procedural posture: permission to apply for judicial review was granted by Silber J; the substantive hearing was heard by Wyn Williams J, who treated the permission hearing as substantive; the court proceeded to determine the merits and dismissed the application.

Issues framed by the court:

• Whether the claimant was a person who was "subject to a former scheme" immediately before commencement (1 December 2001) within paragraph 3 of the Transitional Provisions Order 2001.
• How the PIA rules should be construed as to the effect of resignation/termination on obligations to co-operate with investigations and compliance with Ombudsman awards.
• Whether the judicial review application was premature.

Court's reasoning and disposition: The court examined the PIA rules, including the complaints chapter (chapter 8) and rules governing resignation and post-membership obligations. Although a guidance paragraph referred to an undertaking to be given on application for membership, the court held that the express rules (in particular rule 1.9.4) imposed continuing obligations on a person who ceased to be a member to co-operate with enquiries, investigations and adjudications of complaints. Read together, those rules meant a former member remained subject to the PIA scheme in the sense required by paragraph 3(a) of the Order on 1 December 2001. The court therefore concluded the Ombudsman had jurisdiction. The court also rejected the defendant's submission that the claim was premature, holding it was reasonable to challenge jurisdiction at the first point it could be reasonably done. The judicial review was dismissed and the draft order filed by the parties was made.

The application for judicial review is dismissed. The court held that, on proper construction of the PIA rules (notably rule 1.9.4 read with the complaints rules), obligations to co-operate with investigations and adjudications survived resignation or termination of membership so that the claimant was "subject to a former scheme" on 1 December 2001 and the Financial Ombudsman Service lawfully assumed jurisdiction. The court also rejected the defendant's argument that the judicial review was premature.