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

When deciding whether previously concluded Financial Ombudsman Service proceedings may be reopened because of material new evidence, the relevant question is whether the evidence could have been obtained earlier with reasonable diligence. The court on judicial review does not decide that factual question afresh. It asks whether the Ombudsman could reasonably reach the conclusion reached and whether there was an error of law or failure to consider a matter which the statutory scheme required to be considered. A complainant cannot reserve expert evidence for use after an accepted determination merely because the determination later proves disappointing. The court declined to determine the separate construction of section 228(5) of the Financial Services and Markets Act 2000, because the application failed on the new-evidence issue.

The claimants complained to the Financial Ombudsman Service about advice concerning pension fund withdrawal investments. The Ombudsman issued a determination awarding redress, which the claimants accepted. They later sought a review based on a report by Professor Blake. The FOS concluded that the report represented an expert opinion which could have been obtained during the original investigation and was not material new evidence subsequently available.

The claimants sought judicial review of the later FOS decision, alleging an error of law in the interpretation of the reopening power and contending that the report qualified as material new evidence. Permission was granted on those grounds only; the original determination was not under challenge.

1. Application dismissed. The claim concerned only the FOS decision of 24 May 2006, not the merits or public-law validity of the earlier determination.
2. The relevant issue was whether it was open to the FOS, as a matter of public law, to conclude that the claimants could have obtained Professor Blake’s report when responding to the provisional decision with the exercise of reasonable diligence. The court was not required to decide that question for itself.
3. The court accepted that there was no real difference between the formulation advanced by the FOS and the principles concerning fresh evidence stated in Ladd v Marshall [1954] 1 WLR 1489. The relevant consideration was whether the expert evidence could reasonably have been obtained during the original process.
4. The FOS was entitled to take account of the informal and specialist nature of its scheme. The rules did not prevent parties from submitting specialist evidence, but they did not require the Ombudsman to obtain such evidence or entitle a complainant to have a second opportunity to present the case after accepting an unfavourable determination.
5. The claimants had already advanced substantial submissions in response to the provisional decision. Their belief that the Ombudsman would accept their case, and their later realisation that the disagreement was wider than they had appreciated, did not make it unreasonable for the FOS to conclude that an expert report could have been obtained earlier. Complaints about the adequacy of the original determination could not be raised indirectly in these proceedings.
6. The court therefore found no public-law error. It was unnecessary, and undesirable without full legal argument, to decide whether section 228(5) itself prevented reopening of an accepted determination.

The judgment itself describes the procedural history of the judicial review claim. Administrative Court: Stanley Burnton J refused permission on the papers on 10 September 2007. Administrative Court: King J granted permission at an oral reconsideration hearing on 14 February 2008, limited to the two grounds pleaded. High Court (Administrative Court): the claim was dismissed.