The Court of Appeal has ruled that a complainant cannot accept redress from the Financial Ombudsman Service and pursue the firm in court for additional redress over the same complaint.
Last week the Court of Appeal upheld a High Court judgment from November 2010 which ruled that a claimant who accepts a final decision from the ombudsman is bound by it and cannot subsequently bring a civil claim in relation to the same matter.
The case centered around advice given by In Focus Asset Management & Tax Solutions to clients Barry and Julie Clark.
The Clarks complained to the FOS in November 2008 that In Focus gave them unsuitable advice by recommending they invest the proceeds of the sale of a family business in a geared traded endowment plan, leading to losses of £500,000.
After accepting the maximum £100,000 award from the FOS (now £150,000 for cases brought after 1 January 2012), in June 2010 the Clarks issued proceedings against In Focus to recover the balance of their loss.
The case was initially rejected by a county court judge but they won on appeal in the High Court. In Focus appealed the ruling in December 2012.
In Focus has made a partial settlement to the Clarks for an undisclosed sum.
CMS Cameron McKenna partner Alex Denslow, who acted for In Focus, says: “This is a landmark decision. If the original judgment had been left unchallenged, firms and their insurers faced significant financial exposure.”
Jacksons Wealth Management managing director Pete Matthew says: “This is good news as the last thing advisers need is for professional indemnity insurance premiums to soar because of an open cheque book policy authorised by the courts.”