A former IFA’s year-long battle to quash a Financial Ombudsman Service claim has ended in defeat after a High Court judge refused to quash the verdict or to grant a judicial review, despite acknowledging an independent assessor’s report than stated the complaint had been “solicited”.
On the 23 February 2012, an ombudsman made a final decision upholding in part a complaint brought by a client, Timothy Fairweather, against his former IFA John Calland, who had been as adviser at the now insolvent Calland Insurance and Mortgage Services.
The complaint related to advice given to Mr Fairweather in 1992 to take out a personal pension rather than to join his employer’s occupational pension scheme. Fos ordered Mr Calland to pay compensation of £48,355, plus interest.
Mr Calland had disputed the validity of the claim after the initial complaint to Fos in mid-2005, with the former adviser complaining of harassment and of claims being solicited from customers. He had insisted that the Fos did not “have any jurisdiction to require my co-operation in these circumstances”.
The court heard that an independent assessor’s final decision in December 2006, following a referral in May of that year, found that the wording of the Fos’s correspondence with Mr Fairweather and others was “questionable from a procedural point of view” and that the claim had been “solicited”.
The decision was based on the ombudsman’s apparent assumption that the customer did have a complaint, rather than advising what to do if there was such a complaint. It added that there was no evidence the customer had complained directly to Mr Calland.
However, the judge’s ruling states that there was evidence to suggest a desire on the part of clients to submit a claim and therefore that the assertion of solicitation was “harsh”. It adds that there is “no valid basis” to quash the Fos verdict or to grant a requested judicial review.
The complaint arose following the past business review demanded by the then Securities and Investment Board into personal pensions advice in 1994. After conducting his own review, Mr Calland wrote to Mr Fairweather in 1997 stating that he had reviewed the client file and that there was no cause for concern.
In February 2004 a company appointed by the Financial Services Authority intervened and wrote to the client stating that his pension was worth less than it would have been had he be advised to join his occupational scheme and that his claim was being passed to the Financial Services Compensation Scheme.
FSCS later wrote to the client stating that any claim should be sent directed against Mr Calland directly and referring him to Fos, as there was no evidence that Mr Calland was insolvent and therefore unable to meet any liability.
The complaint was submitted to Fos in 2005 and lasted for more than six years, with a second independent assessor report being conducted and a final report published in March 2011.
This report found that while Fos was adjudged to have acted reasonably, the assessor was not satisfied “that this has been a well and firmly managed investigation”.
