Bamber & Anor, R (on the application of) v Financial Ombudsman Service

The Financial Ombudsman scheme is an informal, sui generis complaints procedure under the Financial Services and Markets Act 2000. The Ombudsman must decide what is fair and reasonable in the circumstances, taking the law into account but remaining free from the constraints of common-law limitation rules unless the statutory scheme expressly incorporates them. Statutory and scheme time limits are not retrospective unless the legislation or rules provide for retrospectivity. A close institutional relationship between the Financial Services Authority and the Ombudsman Service does not, without more, establish a lack of independence, particularly where the Ombudsman’s decisions are subject to judicial review.

These were linked renewed applications for permission to apply for judicial review of decisions by the Financial Ombudsman Service to entertain complaints concerning the sale of endowment policies. The claimants argued that the Ombudsman had misapplied limitation principles, applied the statutory scheme and rules retrospectively, and lacked sufficient independence from the Financial Services Authority.

The applications followed an earlier refusal of permission in the BP case by Ouseley J. The central questions were whether the Limitation Act applied to complaints under the statutory Ombudsman scheme, whether the relevant provisions had been applied retrospectively, and whether the relationship between the Financial Services Authority and the Ombudsman undermined the latter’s independence.

1. Renewed applications refused. None of the proposed grounds was sufficiently arguable to justify permission. The court nevertheless recognised that properly arising challenges might be brought after the Ombudsman had determined the complaints on their merits.
2. The Ombudsman scheme under the Financial Services and Markets Act 2000 is an informal complaints procedure of its own kind. Under section 228, the Ombudsman must determine the complaint by what is fair and reasonable in the circumstances. The Ombudsman is not bound by the common law, although the law is a material consideration in reaching a fair and reasonable decision.
3. Following Heather Moor and Edgecomb Ltd v Financial Ombudsman Service [2008] EWCA Civ 642, the Limitation Act did not apply to the statutory scheme in the absence of specific incorporation. Schedule 17 paragraph 13, which provides for rules concerning appropriate complaint time limits, was inconsistent with the proposition that ordinary limitation legislation applied independently.
4. The retrospectivity argument was unarguable. Neither the Act nor the rules made under it contained a retrospective element, and the Ombudsman had not applied them retrospectively.
5. The statutory relationship between the Financial Services Authority and the Financial Ombudsman Service did not make the latter so subservient as to lack the necessary independence. The Service was a separate body corporate and scheme operator. Appointment and removal arrangements, including the requirement for external Treasury permission, and the supervisory jurisdiction of the High Court had to be viewed as part of the overall scheme.
6. In case 4330, the claimant was ordered to pay the defendant’s costs of preparing the acknowledgment of service in the sum of £2,754. Any renewed application for permission to appeal to the Court of Appeal, and any extension of time for it, was a matter for that court.

The judgment records that Ouseley J had previously refused permission in the BP case. The present court dealt with renewed applications for permission and refused both applications. Any further renewal was to be made to the Court of Appeal.