Financial Ombudsman Service: effect of a determination by FOS

The Financial Ombudsman Service, established under the Financial Services and Markets Act 2000, has jurisdiction to resolve disputes arising out of the supply of financial products to consumers and small businesses – including insurance policies – and to make an award of up to £150,000.

The question in Clark and Another v In Focus Asset Management & Tax Solutions Ltd [2012] EWHC 3669 (QB) was whether an applicant who received an award of the statutory maximum remained free to seek the balance of his loss in the ordinary courts. Cranston J ruled that the doctrine of merger – whereby a cause of action merges into the judgment so that only the judgment remains enforceable – had no application to the Ombudsman scheme.