RegulationJun 28 2016

Court allows claimant to go to Fos over advice case

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by
Court allows claimant to go to Fos over advice case

A decision by the High Court means clients with a complaint about their adviser could be encouraged to take their issue to the Financial Ombudsman Service.

Tom Hunter, an associate with City law firm RPC, said the Commercial Court had granted a claimant a stay to allow them to seek resolution from Fos.

If the claimant - Templars Estates - failed before the Fos, they were permitted to come back to court to continue proceedings.

Mr Hunter said: “The court acknowledged the banks’ concern that the claimant could try to continue court proceedings after gaining an award from the Fos.

“The claimant agreed to undertake not to continue proceedings in the High Court if it obtained an award before the Fos in light of the banks’ concerns.

“This case does little to avoid the risk that firms can face parallel proceedings and the risk, after Fos, of claimants taking a second bite at the cherry.”

The case involved proceedings against two banks for alleged negligent advice, with the trial due to commence sometime in 2018 before the Mercantile Court.

But the claimant had also complained to Fos, which usually dismisses complaints if there are on-going court proceedings and no stay has been granted.

The banks did not consent to a stay, saying that because there had already been significant delays granting this would cause them prejudice.

But the court found the delays had not been the claimant’s fault and that they had been diligently pursuing its complaints against the banks.

It said the Fos was a more economical and informal process than court proceedings and the claimant would suffer prejudice if a stay was not granted, especially considering the banks’ superior resources.