On 25 May 2007 the High Court handed down its decision in the case of Bunney v Burns Anderson Plc [2007] EWHC 1240 (“the Bunney case”). The Court considered two conjoined cases and the question of whether it was appropriate to grant injunctions to enforce FOS determinations in favour of complainants which appeared to require redress in sums of more than £100,000.

In the Bunney case the complainants brought proceedings in which they sought to enforce these determinations arguing that they were directions, in accordance with section 229(2)(b) of the Financial Services and Markets Act 2000 and therefore not subject to any financial cap. The FOS supported these arguments.

The main issues that the High Court looked at were whether the FOS determinations were money awards or directions and ultimately whether the determinations were enforceable by injunction. It was held that it was necessary to look at the substance rather than the form of a FOS determination in considering whether or not it should be classed as a money award or a direction. If the determination requires payment of money to or for the benefit of a complainant then it is a money award and subject to the £100,000 limit.

The Court further confirmed that it is not necessary for a money award to require an actual payment to be made to the complainant. A determination to make a payment to a third party for the benefit of the complainant is also a money award and a determination need not be quantified to be classified as a money award.

Awards of the FOS are referred to in the Dispute Resolution: Complaints (DISP) section of the FSA Handbook. DISP 3.9.9 G provides: “The limit on the maximum money award has no bearing on any direction which an ombudsman may make as part of a determination”. The Bunney case emphasises the point that in order to fall within the scope of this provision and for a determination to be a direction it must fall outside the scope of the definition of a money award.

It should be noted that for the purposes of calculating the maximum money award interest does not form part of the award. DISP 3.9.15 R requires that a firm must comply promptly with any money award or direction made by the FOS.