Regulation  

Fos ‘overlooks’ law on pre-2001 complaints

The owner of Glasgow-based Caledonia Consultancy said he has found himself “educating” the Ombudsman on the Statutory Instrument 2326, which indicates that Fos should consider whether a complaint on pre-2001 advice would be “dismissed” under previous PIA rules.

He said: “The law is saying that, if an adviser was handling a case that was sold before 2001, Fos should act in accordance with how the previous arbitration regime would have acted.

“Fos has to follow the same guidelines that advisers were adhering to at the time that advice was given. But the Ombudsman has never acknowledged this.”

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Mr Oszadlik said he had been involved with recent cases where he refused to settle after clients’ complaints were upheld, only for Fos to reconsider their decision once the possibility of legal action loomed.

He said: “The judge may well take the view that Fos must follow all the rules in this area, and I believe that Fos knew that they did not act in accordance with the law. So it suddenly found it had overlooked certain facts and ruled in my favour.”

Alan Lakey, partner for Hertfordshire-based Highclere Financial Services, said this legislation had been drafted by the Treasury in 2001 as it recognised back then the “potential for injustice” if historic cases were considered in a retrospective manner.

He said: “This is also important because the PIA worked on factual content, rather than the ‘balance of all probabilities’ approach that Fos seems to take. The Treasury put in place a mechanism so that Fos can be fair to advisers, so is Fos ignoring this mechanism?”

Right to reply

A spokesman for Fos said: “If a client is complaining about a case prior to 2001, and a business is signed up to a relevant ombudsman of that time, we try to apply a fair and reasonable remit by considering the rules that were in place at that time, taking into account laws and good industry practice that existed at that time. We do not comment on individual cases but we go through a two stage process anyway where an adjudicator tries to resolve an issue in an informal manner and should that fail, it goes through to the ombudsman.”