Bluefin Insurance Services Ltd, R (On the Application Of) v Financial Ombudsman Service Ltd

Eligibility for compulsory jurisdiction under the Financial Services and Markets Act 2000 is a gateway condition. Where the rules state eligibility in objective terms, including whether a natural person acts outside his trade, business or profession, the issue is a precedent fact for the court, or at least a right-or-wrong legal question rather than a broad evaluative matter for the ombudsman. Eligibility is assessed when the complaint is brought.

Personal loss or a personal claim does not itself make someone a consumer. A complaint seeking redress for loss arising from alleged acts as a director in the course of business remains connected with that business. The complainant was therefore ineligible and the jurisdiction decision was quashed.

Bluefin Insurance Services Ltd sought judicial review of an ombudsman’s decision that Wayne Lochner was eligible to complain to the Financial Ombudsman Service. Lochner was an insured person under a directors’ and officers’ policy taken out by Betbroker Ltd. He alleged that Bluefin failed to notify the insurer of a potential claim arising from his conduct as a director, leaving him without indemnity.

The central issues were whether consumer status under the Financial Services and Markets Act 2000 and DISP was a precedent fact for the court, when eligibility had to be assessed, and whether Lochner was acting outside his trade, business or profession when making the complaint.

The claim for judicial review succeeded. The court quashed FOS’s decision to entertain the complaint under its compulsory jurisdiction.

1. Precedent fact. The distinction identified in R (A) v Croydon London Borough Council [2009] 1 WLR 2557 was binding. Objective facts which set the limits of a public authority’s jurisdiction are for the court, whereas evaluative questions remain for the authority subject to ordinary judicial review. R (on the application of Bankole) v the FOS [2012] EWHC 3555 (Admin) was correct on the distinct question of time limits under DISP. Different provisions may require different approaches.
2. Timing. Under sections 226(2) and 226(3)(a) of the Financial Services and Markets Act 2000, read with DISP 2.7, eligibility is assessed when the complaint is brought unless the rules provide otherwise.
3. Consumer status. The relevant inquiry is what the complainant was doing and for what purpose. Personal capacity and personal loss are not decisive. The complaint sought redress for loss resulting from the absence of indemnity under a policy covering liability arising from alleged wrongful acts as a director.
4. Application. That purpose was inextricably linked to Lochner’s trade, business or profession. He was not a consumer under DISP 2.7.3R and was not an eligible complainant. FOS therefore lacked compulsory jurisdiction. The same conclusion followed alternatively because FOS had misdirected itself in law. Comparisons with private health or similar personal-protection policies did not alter the result.

This was a first-instance judicial review. Permission was refused on the papers by Lang J on 16 September 2013 and granted on oral renewal by Blair J on 12 February 2014.