BUNNEY V (1) BURNS ANDERSON PLC, (2) FINANCIAL OMBUDSMAN SERVICE

[2007] EWHC 1240 (Ch), Chancery Division, Mr Justice Lewison, 25 May 2007

Financial Ombudsman Service – Order by FOS that defendant pay £228,055 to the applicant for loss caused by unsuitable advice – Whether court had jurisdiction to hear a challenge to the award other than by judicial review – Whether FOS had jurisdiction to award more than £100,000 – Financial Services and Markets Act 2000

B was made redundant in 1992, and on the advice of BA he was advised to transfer his benefits under his ex-employer’s pension scheme. As a result B suffered loss and complained to FOS. By a decision dated 18 December 2002 FOS decided that B had been given unsuitable advice and ordered a loss assessment to be carried out and the relevant amount duly to be paid to B. That assessment produced a figure of £228,055. BA asserted that under the Financial Services and Markets Act 2000, s 229, FOS had jurisdiction to order payment of money up to £100,000 but that it did not have any additional jurisdiction to give directions which could lead to any additional payment. FOS argued that it possessed the relevant jurisdiction. Lewison J held that: (1) a person wishing to challenge an award of FOS was not restricted to doing so by judicial review proceedings, and could also plead by way of defence to an action an award that the award was beyond the jurisdiction of the FOS; and (2) FOS could only order payment of money up to £100,000 – there could only be a recommendation in respect of additional sums.