Financial Ombudsman Scheme: only one bite of the cherry

Published on

The long-awaited judgment in Clark v In Focus was handed down at the Court of Appeal on 14 February, allowing the appeal.

The long-awaited judgment in Clark v In Focus was handed down at the Court of Appeal on 14 February, allowing the appeal.

What this means is that aggrieved investors cannot bring a claim in court having accepted an award from the FOS for the same claim.

Today Lady Justice Mary Arden said that the Clarks should have rejected the award from the FOS if they wanted to seek further compensation from In Focus and could then have taken the case to court.

She said: "They are not able to raise the same claims in court proceedings even if they could have recovered more in court proceedings. What they had to do to obtain this higher level of compensation was to reject the award and bring court proceedings for that amount."

This is very good news for IFAs and their insurers. Until now, many investors have been using an award from the FOS as a fighting fund for litigation. Now if those claimants try to bring their cases in the courts, they risk being struck out on the basis that the matter has already been decided ("res judicata").

So, in Lady Justice Arden's words: "A defendant should not have to face the same claim twice". Now investors only get one bite of the cherry and all litigants achieve better finality. Claimants have to choose whether to have their claim resolved by FOS (with its cap of £150,000), or whether to bring it in the court.

Mr Alistair Schaff QC and Mr Simon Howarth were instructed by CMS Cameron McKenna LLP for the successful Appellant.
Mills & Reeve Sites navigation
A tabbed collection of Mills & Reeve sites.
Sites
My Mills & Reeve navigation
Subscribe to, or manage your My Mills & Reeve account.
My M&R
Register or login

Register or login Get all the benefits of MyM&R but registering or logging in ulla vehicula mauris mattis hendrerit fermentum. Etiam placerat hendrerit dapibus. Praesent ligula felis, eleifend sed odio quis, feugiat eros. Aliquam vitae felis fermentum, posuere nulla ut, maximus magna.

Staff intranet
Log in to the intranet
Client extranet
Log in to the extranet