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MP presses for FOS payout plus cash in court

Conservative MP Mark Field has tabled an amendment to the Financial Services Bill which would allow consumers to accept the maximum Financial Ombudsman Service award and sue for further compensation in court.

The ombudsman’s maximum award limit is currently £150,000. Last November, the High Court ruled in Andrews v SBJ Benefits Consultants that complainants cannot accept a FOS award and pursue the firm in court for additional redress over the same complaint.

The amendment by Field (pictured), who is MP for the Cities of London and Westminster, would effectively overturn that ruling. His amendment says any award made by the FOS would be “without prejudice to the right of the complainant to sue for any amounts in excess of the maximum award limit”.

Fishburns Solicitors partner Harriet Quiney, who represen-ted IFA firm SBJ Benefits Consultants in the High Court case, says: “People who would benefit from this amendment are likely to be those with quite big claims, many of whom would look to use the FOS to raise funds for subsequent legal action. Complainants may get a fav-ourable ruling from the FOS but would then face much tougher scrutiny in the courts and risk losing quite a lot of money.”

Compliance consultant Adam Samuel, who suggested the amendment to Field, says: “If you are awarded money by the FOS, you can use it for what- ever you want.

“Currently, those with large claims who want to accept a ruling from the FOS have to forfeit the rest of their compensation, which is manifestly unfair.”

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Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. Two bites of the cherry which will only benefit the rich.

  2. If he feels so strongly about the redress limits I would ask why do we bother with the FOS?

    Let the courts decide, let natural justice prevail.

  3. Yet another instance of pushing the consumer is always right stamp without thought to the consequences.

    If the FOS was actually capable of sensible arbitration, and used the legal system as its basis rather than its current approximation, then advisers might well agree that such a change is acceptable.

    There’s less balance here than with the typical managed fund…and we know how balanced they are.

  4. You can wet your pants in a snowstorm but it won’t keep you warm for very long.

  5. Hmmmm…….I wonder how the land would lie if having won compensation via FOS the client then went to court and under the different regime applied there, his case was not upheld.

    So one system says the IFA owes and must cough up – which of course you do – and the client can keep, despite the legal eagles then possibly saying the client didn’t have a case.

    Errr…….sort of feels peculiar…..

  6. David Trenner - Intelligent Pensions 12th April 2012 at 2:32 pm

    It looks like Mr Field and his wee pal do not understand the purpose of FOS … no real surprise there since I suspect that no-one at FOS does either!!

  7. My mind had got to the stage where I wasd just about to type a comment and then I saw Peter’s and David Trenner’s, both of which I would have written had they not beaten me to it.
    If you appeal a decision to a higher court normally and the decision is overturned, the higher court takes precedent and on appeal, if the former looser wins, doesn’t the new looser end up paying all costs.
    By all means allow a second bite at teh cherry, but ONLY if it is accepted that in doing so, the law may find in favour of the earlier looser and the individual might not only have to cover the legal costs of the latest bite at the cherry, but refund the £150k plus costs as well.

  8. Becoming a headcase IFA 12th April 2012 at 6:05 pm

    Right well then if they want to go to court for further compensation then the whole of the compensation should be at risk if they lose because the court will adjudicate the merits of each case over again.

  9. This is not onlya two speed, but a three dimensional combination of the application of justice.

    The FOS process is completely subjective and arbitrary, irrespective of the merits or otherwise of a claim and in any other jurisdiction would be laughed at. It is not impartial, the parties do not have equal rights and there is no testing of evidence or right of appeal for one party.

    To bind one side to this process whilst still allowing the other a further claim having exploited the now predictably lax FOS system would be a further affront to British Justice. Whilst it is fast becoming a cliche [or should it be a joke?] terrorists and murderers have more rights than anyone subjected to a claim through the FOS process. This is a flawed process already and to further alienate one party’s rights with what amounts to double jeopardy simply cannot be right.

    One has to question Mark Field’s motives here. Is it the case that he has a few ‘constituents’ who have lost out through some sophisticated [or get rich quick] schemes? Smells fishy to me!

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