Firms are also disappointed by the decision to grant only complainants anonymity in published decisions. While the Fos and the FCA already publish statistics on the number of complaints each financial business has had against it by complaint category, firms were concerned that published Fos determinations will now be used as a form of regulatory censure or complaints-led enforcement.
For many years since the establishment of the Fos in 2001, the legal profession tended to be dismissive of it, its limited powers and its odd, non-legal jurisdiction. This attitude is now changing with a series of court decisions, which have boosted the Ombudsman’s power and jurisdictional reach. All but the largest claims by private individuals or eligible small businesses now go through the Fos rather than the courts.
In a series of cases the Fos’ approach has been upheld by the administrative courts in repeated judicial review successes on questions of its jurisdiction. The high court has confirmed that the Fos need not apply the letter of the law when reaching its decisions. With the publication of Fos determinations, the Ombudsman is now in a position to create its own financial services case law, unfettered by the restrictions of common law.
In fact, in recent years Fos decisions have even been helping to determine common law. In the high-profile case of Rubenstein v HSBC, the court of appeal cited with approval the Ombudsman’s views (in a published final decision about a Mr and Mrs V’s complaint) on factual and legal issues in relation to the foreseeability of the financial crisis, contradicting the (ultimately incorrect) strict legal analysis adopted by the high court.
Now with the enactment of the Consumer Insurance (Disclosures and Representations) Act 2012, the common law has been brought into line with Fos practice on dealing with insurance complaints about non-disclosure and mis-representation. It is now likely that we will see published Fos final decisions cited in the courts as they begin to apply the new law.
Increasingly, Ombudsmen refer in their decisions to other published cases, FCA decisions and guidance and thereby create a system akin to common law precedent. The publication of all final decisions is bound to lead to increasingly simple reports referring to previous precedent cases.