Davis v Lloyds Bank Plc (Rev 1)

For a complaint to trigger DISP, the communication must convey dissatisfaction about the provision or failure to provide a financial service or redress determination, relate to an activity within the Financial Ombudsman Service’s jurisdiction, and allege loss, distress or inconvenience. The question is one of interpretation for the reasonable recipient in context. Participation in a proactive review does not itself constitute a complaint. A request to investigate whether loss may have occurred, or to include a product in a review, is insufficient where it does not complain about the original sale and does not allege loss. The phrase may suffer concerns possible future loss, not uncertainty about whether past loss occurred. A complaint cannot be constructed retrospectively from disconnected statements.

Mr Davis appealed from the decision of the High Court, reported at [2020] EWHC 1758 (Ch), on two preliminary issues concerning interest rate swaps sold by Lloyds Bank plc. The High Court held that his communications during the bank’s FCA-related review did not amount to a complaint under DISP and that, in any event, DISP did not require the bank to conduct the review in accordance with its agreement with the FCA.

The Court of Appeal considered only whether Mr Davis had made a qualifying complaint about the swaps. The court was informed during the hearing that the appeal would be dismissed if that issue failed.

Appeal dismissed. Lord Justice Lewison gave the reasons with which Lord Justices Phillips and Warby agreed.

1. The review agreement between the bank and the FCA was a voluntary compromise arrangement and not a statutory consumer redress scheme imposed under section 404 of the Financial Services and Markets Act 2000. The review process was not itself the provision of a financial service and complaints about it fell outside the compulsory jurisdiction of the Financial Ombudsman Service. The court relied on [2017] EWCA Civ 1073 and [2017] EWHC 1135 (Admin).
2. The DISP definition required an expression of dissatisfaction communicated to the provider, concerning the provision or failure to provide a financial service or redress determination, relating to an activity within FOS jurisdiction, and alleging loss, material distress or material inconvenience. Whether those requirements were met depended on the meaning conveyed to a reasonable recipient in context. Context was fundamental, and a complaint could not be assembled retrospectively from a mosaic of acontextual statements. The court followed [2018] EWHC 393 (QB) on participation in a proactive review and applied the contextual approach in [2004] UKHL 46.
3. The phrase may suffer referred to possible future loss. It did not cover uncertainty about whether loss had already been suffered. A complainant need only allege loss and need not know or quantify it.
4. Mr Davis’s communications asked questions, sought information, or requested that the 2005 swap be included in the review. They did not convey dissatisfaction with the original sales or allege that he had suffered loss. The later correspondence was, at most, conditional dissatisfaction with review eligibility or a future review outcome. It therefore did not constitute a DISP complaint.
5. Since no qualifying complaint had been made, the second preliminary issue concerning DISP 1.4.1R did not arise. The appeal was dismissed.

• Court of Appeal (Civil Division) — [2021] EWCA Civ 557. Appeal dismissed.
• High Court, Chancery Division — [2020] EWHC 1758 (Ch). Both preliminary issues were decided against Mr Davis.