The High Court has granted a stay of proceedings to claimants, in order to allow a complaint to the Financial Ombudsman Service (FOS) to be pursued in Templars Estates Ltd and Others v National Westminster Bank and Royal Bank of Scotland.

The claimants had issued proceedings in the Mercantile court against NatWest and RBS, alleging that they had been negligently advised by the banks. After those proceedings had been issued, they sent a complaint to FOS. FOS will not allow a complaint to be brought while there are active proceedings in court.

The claimants sought a stay of proceedings, to allow them to pursue the FOS complaint. The banks resisted, on the grounds that there should be no delay in proceedings and that granting a stay would prejudice them and their employees.

The stay was granted. The court considered that the claimants would suffer prejudice without a stay, as they would not be able to pursue their FOS complaint. The FOS route was stated to be a more 'informal and much more economical' route for them to pursue. Furthermore, the court considered that their conduct in the proceedings had been good and that they had been diligent in pursuing the claim. The banks and their employees would not suffer prejudice if the matter was stayed for a year.

However, the court noted that the banks did have a legitimate concern that the claimants could succeed with regard to their FOS complaint but then continue with court proceedings against them. The claimants therefore had to undertake that, if they were successful in obtaining an award from the FOS, they would discontinue the court proceedings. If unsuccessful they would be able to return to the High Court.

In Clark and another v In Focus Asset Management & Tax Solutions Ltd, in 2014, the Court of Appeal confirmed that where a FOS decision and compensation award has been accepted, claimants would then be unable to bring a claim in any subsequent court proceedings.

Templars Estates Ltd and Others v National Westminster Bank and Royal Bank of Scotland [2016] EWHC 2020 (Comm)