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

The Financial Ombudsman Service’s compulsory jurisdiction is an informal complaints procedure outside the common law. Rules made under Financial Services and Markets Act 2000 may extend complaint time limits without being constrained by the ordinary limitation regime. A retrospectivity challenge is premature before the merits and basis of the ombudsman’s decision are known. The ombudsman must have regard to the law applicable when the transaction occurred. The statutory structure did not create a real possibility of subconscious bias, and judicial review provides independent judicial scrutiny.

The applicants challenged the Financial Ombudsman Service’s jurisdiction to investigate complaints about historic mortgage endowment policies. They argued that extended time limits unlawfully displaced accrued rights under the Limitation Act 1980, that applying the fair-and-reasonable test to past transactions was retrospectively unfair and contrary to legitimate expectation, and that the FOS lacked independence because of its statutory relationship with the Financial Services Authority.

Forbes J refused permission for judicial review. The Court of Appeal considered whether permission should be granted in relation to the limitation, retrospectivity, legitimate expectation and independence arguments. A separate issue concerning changes in partnership membership was not determined.

1. Applications refused. Permission to appeal Forbes J’s refusal of permission for judicial review was refused in both cases.
2. The FOS scheme is an informal complaints procedure outside the common law. Part III of Schedule 17 to Financial Services and Markets Act 2000 authorises rules governing complaint time limits and permits extensions. The statutory scheme contains no requirement that those extensions be confined by the Limitation Act 1980.
3. The retrospectivity argument was premature. The merits had not been determined and the basis of any decision was unknown. It could not yet be established that the rule against retrospectivity had been infringed or inevitably would be infringed. In applying the fair-and-reasonable test under section 228(2), the ombudsman was nevertheless required to have regard to the law applicable when the relevant transaction occurred.
4. The statutory structure expressly required independence from the regulator. Appointment by the regulator, reporting obligations, budgetary arrangements and fees payable after jurisdiction was accepted did not create a real possibility of subconscious bias. The availability of judicial review provided independent judicial scrutiny.
5. The observations in Financial Ombudsman Service v Heather Moore and Edgecomb Ltd concerned a materially different funding situation, in which the decision-maker’s income was affected by the outcome on the merits. Other matters might become relevant after the ombudsman decided the complaints on their merits.

• Court of Appeal (Civil Division): [2009] EWCA Civ 593 . Applications for permission to appeal were refused.
• Queen’s Bench Division, Administrative Court: Forbes J refused permission for judicial review. The citation is not stated in the judgment.