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

The claimants sought renewed permission to apply for judicial review of decisions by the Financial Ombudsman Service to entertain complaints about the sale of endowment policies. The court considered three principal grounds: (1) whether limitation law applied to complaints under the Financial Services and Markets Act 2000 scheme; (2) whether the FOS or the statutory rules had been applied retrospectively; and (3) whether the FOS and its Ombudsmen are sufficiently independent of the Financial Services Authority to be appropriate decision-makers.

The judge held that the complaints scheme under the 2000 Act is sui generis and, following the Court of Appeal decision in Heather Moor and Edgecomb Ltd v Financial Ombudsman Service [2008] EWCA Civ 642, the Ombudsman is not bound by the common law though the law remains a material consideration; accordingly the Limitation Act does not apply to the scheme in the absence of specific provision. The judge also found no basis for a successful retrospectivity argument and concluded that, on the statutory scheme and the availability of judicial review, lack of independence was not an arguable ground. Some points were also premature and could be pursued, if appropriate, after the Ombudsman has decided the merits. Permission was refused.

Background and nature of the application: These are two linked renewed applications for permission to apply for judicial review of decisions of the Financial Ombudsman Service to entertain complaints arising from the sale of endowment policies. The detailed facts are set out in supporting grounds but were not required for the short ruling.

Relief sought: Renewed permission to apply for judicial review of the FOS decisions.

Issues framed:

• Whether limitation law (the Limitation Act) applies to complaints under the Financial Services and Markets Act 2000 scheme or to the Ombudsman’s decision-making;
• Whether the FOS or rules made under the 2000 Act have been applied retrospectively in the absence of express retrospective provision;
• Whether the FOS and its Ombudsmen are sufficiently independent of the Financial Services Authority to be appropriate independent decision-makers.

Court’s reasoning: The court accepted that the FSMA 2000 scheme is a sui generis informal complaints procedure and that Section 228 requires the Ombudsman to do what is fair and reasonable in the circumstances. The Limitation Act does not automatically apply to that scheme; the law is a material consideration but the Ombudsman is not bound by common law rules. The Court of Appeal decision in Heather Moor supported that approach. The statutory scheme, including Schedule 17 and paragraph 13 providing for appropriate time limits, is inconsistent with treating the Limitation Act as governing complaints. On retrospectivity the court found no provision in the Act or the rules and no improper retrospective application by the Ombudsman. On independence, while the FOS has a close relationship with the FSA, it is a separate corporate body and the possibility of judicial review of Ombudsman decisions and the statutory safeguards mean lack of independence was not an arguable ground. The judge also observed some arguments were premature and could be pursued after the Ombudsman had decided on the merits.

Disposition: Both renewed applications for permission to apply for judicial review were refused. The court ordered costs in respect of the acknowledgment of service in one of the cases as recorded in the judgment.

Both renewed applications for permission to apply for judicial review were refused. The court concluded the FSMA 2000 complaints scheme is sui generis and, following Heather Moor, the Ombudsman is not bound by the common law limitation rules though the law is a material consideration; there was no basis for a retrospectivity challenge; and the statutory framework together with the availability of judicial review meant lack of independence of the FOS was not an arguable ground. Some points were also premature and may be pursued, if appropriate, after the Ombudsman has determined the merits.