Full Circle Asset Management Ltd, R (On the Application Of) v Financial Ombudsman Service

Permission for judicial review should be granted where the challenge raises a potentially complex and important issue concerning the operation of a statutory scheme and the construction of its governing provision. The wording of section 228 raises an arguable question about how the Financial Ombudsman should determine what is fair and reasonable in all the circumstances, including the relevance of accepted industry risk standards. The judgment granted permission but did not decide the substantive meaning or application of section 228.

Full Circle Asset Management Ltd sought judicial review of a decision or proposed approach of the Financial Ombudsman Service concerning the treatment of industry views and risk standards when determining a complaint. The claimant relied on the wording of section 228 and argued that the Ombudsman could not substitute a different regulatory standard merely because it considered that standard fair and reasonable. The defendant submitted that industry views would be taken into account but could be departed from. The issue before the court at this stage was whether permission should be granted.

1. The court granted permission to bring the judicial review claim. The issue deserved to be argued fully because it involved practical considerations concerning the operation of the scheme as a whole and raised a potentially complex and important point.
2. Section 228 provides that a complaint is to be determined by reference to what, in the opinion of the ombudsman, is fair and reasonable in all the circumstances of the case. The wording raised an arguable question as to whether that opinion must be assessed against an industry background in which a particular level of risk had been accepted as medium, or whether the provision required a different approach.
3. The court recorded the defendant’s submission that the requirement to take industry views into account permitted departure from those views. It also recorded the claimant’s contrary submission that the effect of taking industry views into account depended on context and might prevent substitution of a different regulatory standard. Those competing arguments were not finally determined.