Calland, R (on the application of) v Financial Ombudsman Service Ltd

The claimant sought judicial review of a Financial Ombudsman Service (FOS) final decision that part of a complaint by Mr Fairweather was well founded and that the claimant should pay compensation. The claimant relied on delay (Article 6 ECHR and common law), the absence of an oral hearing and overall unfairness (including alleged solicitation of complaints) as grounds to quash the decision.

The court applied the principles from Porter v Magill on the reasonable-time guarantee and Greenfield on damages under section 8 of the Human Rights Act 1998. It found that although there were periods of excessive delay by the FOS (notably November 2007 to October 2009 on a jurisdiction issue), the predominant cause of the overall protracted proceedings was the claimant's own conduct, including repeated procedural and jurisdictional objections, voluminous and repetitious submissions and threats of litigation. On the oral hearing point the court applied the fairness test in Heather Moor & Edgecomb and concluded that an oral hearing was not required because it would not have materially assisted in resolving central disputes of fact. The Independent Assessor's finding that some initial correspondence was "soliciting" complaints did not render the Ombudsman's decision unlawful because the complainant had in fact wished to seek redress.

Accordingly the claim was dismissed, an award of damages under the Human Rights Act was refused, and the Ombudsman's final decision of 23 February 2012 was left intact.

Background and parties

• The claimant is a former independent financial adviser (CIMS). The complaint originated with Mr Fairweather, who said that in 1992 he was advised to take out a personal pension rather than join his employer's occupational scheme. The FOS issued a final decision on 23 February 2012 upholding the complaint in part and ordering compensation.
• The claimant applied for judicial review seeking quashing of the FOS decision and an award of damages under section 8 of the Human Rights Act 1998, alleging (i) unreasonable delay breaching Article 6 and common law, (ii) failure to hold an oral hearing despite a central disputed fact, and (iii) overall unfairness including solicitation of the complaint by the FOS.

Procedural posture

The case was heard in the Administrative Court. The court reviewed the long history of regulatory and complaint-handling steps from the PIA/FSA pensions review, through FSCS/FSA involvement, to multiple stages within the FOS (adjudication, provisional and final Ombudsman decisions) and complaints to the Independent Assessor.

Issues before the court

1. Whether the time taken by the FOS to determine the complaint breached Article 6 ECHR and common law standards for determination within a reasonable time.
2. Whether fairness required an oral hearing in light of disputed facts about advice being given.
3. Whether the overall process was unfair such that the Ombudsman's decision should be quashed (including the effect of any solicitation of complaints by the FOS).

Court's reasoning

• On delay: applying Porter v Magill the court weighed complexity, the claimant's conduct and the FOS's management. Although some FOS delays were excessive (notably the year to provisional jurisdiction decision and subsequent eight months to finalise it between Nov 2007 and Oct 2009), the claimant's sustained resistance, voluminous submissions and repeated requests that processing be suspended were the dominant cause of delay. Viewing the proceedings as a whole, the court found no Article 6 breach and refused damages under Greenfield (no causal pecuniary loss, no lost opportunity, and no compensable anxiety attributable to delay).
• On oral hearing: applying the fairness test from Heather Moor & Edgecomb and Thompson, the court held an oral hearing was not necessary. The disputed factual issue (whether advice was sought and given in April 1992) was one that oral evidence, almost twenty years on, was unlikely to resolve materially; the likely witness (the adviser) was too unwell to attend; and regulatory guidance (PIA assumptions and the typical outcome that suitable advice would be to join an employer scheme) meant the evaluative question could fairly be decided on the papers.
• On overall unfairness and solicitation: the Independent Assessor had criticised some FOS wording and recommended modest redress, but found the complainants had indicated a wish to seek redress. The court held that solicitation did not render the Ombudsman's substantive decision unlawful and that any procedural unfairness had already been compensated by the Independent Assessor's recommendation.

Conclusion

The judicial review claim was dismissed and the Ombudsman's determination of 23 February 2012 was upheld.

The claim is dismissed. The court held that, although parts of the FOS process were slow (notably the Ombudsman's handling of the jurisdiction question from November 2007 to October 2009), the claimant's own conduct was the principal cause of overall delay so there was no breach of Article 6 in the circumstances. An oral hearing was not required for fairness because it would not have materially assisted in resolving the central factual dispute. Overall unfairness, including the Independent Assessor's finding that some letters had effectively solicited complaints, did not make the Ombudsman's final decision unlawful. An award of damages under the Human Rights Act was refused applying Greenfield principles.