The High Court has refused an application for judicial review of the FOS by three IFAs who argued that the FOS ought to have stayed its determination of complaints against them by investors in relation to the misselling of Keydata products pending the resolution of litigation (brought by the FSCS) in relation to the same product and issues but in respect of other IFAs and other investors.
DISP 3.3.4R provides that FOS “may dismiss a complaint without considering its merits if he considers that … the subject matter of the complaint is the subject matter of current court proceedings …”. In this case, it was not in dispute that this did not apply, since the “subject matter of the complaint” was agreed to mean “the whole of the complaint made by a particular complainant” – i.e. it applies where the complaint itself is the subject of the litigation.
While a decision in favour of the IFAs may have been a neat way of dealing with the challenge of FOS continuing to decide cases while a related dispute is going through the courts, particularly in cases of alleged mass detriment, the judgment is not surprising since it is consistent with FOS’ statutory obligation to determine each complaint “by reference to what is, in the opinion of the ombudsman, fair and reasonable in all the circumstances of the case” (emphasis added) – and also “quickly” – the timetable for resolution of the FSCS litigation in this case being uncertain.