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

Judicial review of a financial ombudsman’s factual decision is not an appeal on the merits. Rationality has two distinct dimensions: process rationality, requiring logically coherent reasoning supported by evidence and free from critical gaps; and outcome rationality, requiring the conclusion to remain within the range of reasonable decisions. Both apply to factual findings.

Under the Payment Services Regulations 2009, an unauthorised payment generally requires refund unless the provider proves intentional or grossly negligent breach of the customer’s security obligations. Vulnerability does not automatically exclude gross negligence. The Ombudsman had evidence capable of supporting the challenged findings, and his conclusions were within the reasonable range. The claim was dismissed.

The claimant sought judicial review of the Financial Ombudsman Service’s final decision of 28 October 2024 on his complaint against Barclays Bank. Fraudsters had stolen most of his inheritance through transactions on his Barclays accounts. The Ombudsman accepted that most payments were unauthorised but found that the claimant had intentionally given access to his card and PIN or had been grossly negligent, and that Barclays had reasonably relied on a contact number recorded on a Money Management Form.

An earlier FOS decision had been quashed and remitted by R (Moniak) v FOS [2023] EWHC 333 (Admin). The claimant challenged the renewed factual findings as irrational, alleging no supporting evidence or an equivocal evidential basis. The central issues were the applicable rationality standard, the significance of the fraudsters’ criminal convictions, and whether the Ombudsman’s findings were open to him.

Decision

1. Applicable principles. The Financial Ombudsman Service operates under the Financial Services and Markets Act 2000 and determines complaints by what is, in the ombudsman’s opinion, fair and reasonable in all the circumstances. Its jurisdiction is wider than a court’s common-law damages jurisdiction. The Ombudsman nevertheless must act rationally and give clear reasons. The decision should be read as a whole and in a common-sense rather than legalistic way. The court must respect the expertise and statutory powers of an expert decision-maker, but that does not raise the legal threshold for irrationality.

2. Payment Services Regulations 2009. An unauthorised payment generally requires immediate refund under regulation 61. Regulation 62(2) creates an exception where the payer intentionally or with gross negligence failed to comply with regulation 57. The provider bears the burden of proving the exception on the balance of probabilities and must produce sufficient evidence; an assertion that the customer must have disclosed security details is insufficient. Gross negligence has its ordinary meaning and is a high threshold going beyond ordinary carelessness. Guidance concerning APP fraud arose in a different context and could not be read across to impose an additional qualification.

3. Card and PIN finding. Rationality review has process and outcome dimensions. The Ombudsman had not identified an absence of evidence or reached a conclusion despite equally balanced evidence. He considered the bank records, the periods when the card was used in the United Kingdom while the claimant was abroad, the possibility of cloning, the frequency of transactions, the claimant’s recollection, and the criminal trial. The claimant’s objections concerned the weight and plausibility of the competing inferences. They were therefore an outcome-rationality challenge. The finding that the claimant had intentionally allowed access to his card and PIN or had been grossly negligent was within the range of reasonable decisions.

4. Money Management Form. The Ombudsman considered the document’s provenance, signature, timing, account activity, the implausibility of an impersonation at the branch, and evidence that the fraudster’s number was the claimant’s only known contact number. He was entitled to find that the document was genuine and that the claimant had supplied the number. The gaps in Barclays’ records, caused substantially by the passage of time, did not create a logical error where other evidence supported the inference.

5. Criminal conviction and outcome. The fraudsters’ convictions established that the transactions were taken without the claimant’s consent, but the jury did not need to determine precisely how the account was accessed or whether the claimant had allowed access to his card and PIN. The Ombudsman was entitled to weigh the conviction and the trial judge’s directions with the other evidence. The judicial review claim was dismissed.

• High Court (Administrative Court), 8 July 2026: The judicial review claim challenging the Financial Ombudsman Service’s decision of 28 October 2024 was dismissed.
• High Court (Administrative Court), 17 February 2023: In R (Moniak) v FOS [2023] EWHC 333 (Admin) , the claimant’s earlier judicial review was allowed, the first FOS decision was quashed, and the complaint was remitted for reconsideration.