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

A former member of a recognised self-regulating organisation may remain subject to the former ombudsman scheme after resignation where the organisation’s rules impose continuing obligations concerning complaints. Those obligations can satisfy the transitional condition that the person was subject to a former scheme immediately before commencement of the Financial Services and Markets Act 2000.

A judicial review challenging a statutory decision-maker’s jurisdiction is not premature merely because the underlying complaint has not yet been determined on its merits. Jurisdiction may properly be challenged at the earliest reasonable opportunity.

The claimant, a firm of chartered surveyors and estate agents, had arranged a mortgage-linked endowment policy while it was a member of PIA. It later ceased to be a PIA member and was subsequently an appointed representative. Former clients complained about the policy after commencement of the new ombudsman scheme.

The Financial Ombudsman Service decided that it had jurisdiction under paragraph 3 of the Financial Services and Markets Act 2000 (Transitional Provisions) (Ombudsman Complaints Scheme) Order 2001. The claimant sought judicial review, arguing that it was no longer subject to the former PIA scheme when it ceased membership and that the challenge was premature.

1. Application dismissed. The Financial Ombudsman Service’s decision to assume jurisdiction was valid and lawful.
2. Paragraph 3 of the Financial Services and Markets Act 2000 (Transitional Provisions) (Ombudsman Complaints Scheme) Order 2001 applied where a complaint made after commencement related to a pre-commencement act or omission and the conditions in paragraph 3(2) were satisfied. The crucial condition was that the act or omission was that of a person subject to a former scheme immediately before commencement.
3. The claimant had been a member of PIA and was therefore subject to its rules. Although the guidance concerning former members referred to an undertaking given on application for membership, that guidance had to be read with the express rules governing resignation and post-termination obligations.
4. PIA rule 1.9.4 required a person who ceased to be a member to continue to co-operate fully with investigations into complaints and with conciliation or adjudication by the PIA Ombudsman. Those obligations were binding independently of any separate undertaking. The claimant therefore remained bound by the PIA rules until the relevant commencement date and was subject to a former scheme within paragraph 3.
5. It was proper to challenge jurisdiction at the first reasonable opportunity. The claimant was not required to await a merits determination before seeking judicial review. If the jurisdictional challenge had succeeded, the investigation would have stopped, saving time, effort and expense.

The court made an order in the terms of the parties’ draft order.