Greg Moniak, R (on the application of) v Financial Ombudsman Service

The Financial Ombudsman Service has a broad discretion to decide whether to reopen a previously determined complaint, but that discretion must be exercised rationally and fairly. The guidance concerning “material new evidence” is a composite, evaluative test. It does not impose a hard-edged reasonable-diligence requirement equivalent to the rule in Ladd v Marshall. Evidence is material if it is likely to affect the outcome; it need not be decisive. Whether evidence is new and has subsequently become available depends on the facts and context, including finality, the desirability of a just result and any explanation for earlier non-production. A reviewing court must quash an irrational decision or one based on a material factual error, but must leave the reconsideration decision to the Ombudsman.

The claimant challenged the FOS’s refusal to reconsider a complaint concerning fraudulent withdrawals from his Barclays accounts. The FOS had relied substantially on a bank note recording sentencing remarks in concluding that the claimant had relinquished control of his accounts. The claimant later obtained transcripts of the criminal trial judge’s summing-up and sentencing remarks and argued that they undermined that factual premise.

The FOS offered to reconsider whether the transcripts were material new evidence likely to affect the outcome and whether they had subsequently become available to the claimant, but maintained that its original decision was lawful. The issues were whether the offer rendered the claim academic, whether the refusal was irrational or based on a material error of fact, and what relief should follow.

1. Claim allowed. The FOS’s offer did not make the claim academic because it did not resolve the live issues concerning the lawfulness of the original refusal and the scope of the applicable guidance.
2. It was not for the court to decide whether the transcripts were material new evidence. That was for the FOS, subject to the ordinary public-law requirements of legality, rationality and fairness. The court must show appropriate deference to fact-finding, but may take its own view where a jurisdictional question depends on the existence of a fact.
3. DISP 3.3.4B (3) G establishes a composite, evaluative test. Materiality is assessed by asking whether the evidence is likely to affect the outcome; it need not be decisive. “New” evidence and evidence which has “subsequently become available” must be given their ordinary meaning in context. The guidance does not import a hard-edged reasonable-diligence requirement from Ladd v Marshall. Finality and the desirability of a just result remain weighty considerations, but there are no hard and fast rules.
4. The refusal was irrational. The Barclays Note had materially influenced the FOS’s conclusion that the claimant had handed over control of his accounts, whereas the transcripts did not support that conclusion and showed that the judge had treated the fraudster as having taken over the account and concealed what he had done. The finding that the transcripts were not material new evidence therefore lacked a plausible explanation.
5. The timing conclusion was also based on a material error of fact. The claimant had not been expressly asked to provide the transcripts; the FOS’s references to court papers and court judgments had contributed to his confusion. The criteria in E v Secretary of State for the Home Department did not need to be considered further.
6. The high threshold in section 31(2A) of the Senior Courts Act 1981 was not met. The decision was quashed and remitted to the FOS to be retaken. The FOS, not the court, was to determine whether reconsideration was appropriate, with more than one rational outcome remaining open.

The judgment is a first-instance judicial review decision. The claimant obtained permission following an oral hearing before a Deputy High Court Judge on 15 June 2022. The claim was allowed and the matter remitted to the FOS for a fresh decision.