Financial Ombudsman Service: effect of FOS awards

The Financial Services and Markets Act 2000, amongst other things, gave statutory force to a number of voluntary bodies established to provide a cheap and speedy means of resolving disputes involving financial services. The Insurance Ombudsman Bureau, which had existed since 1981, was merged into the new statutory body, the Financial Ombudsman Service.

FOS currently has jurisdiction to make awards of up to £150,000 which are binding on insurers but not on assureds, although it may recommend that any additional loss should be paid. Clark and Another v In Focus Asset Management & Tax Solutions Ltd and Another [2014] EWCA Civ 118 raises the fundamental question of whether an assured who is awarded £150,000 by FOS can accept that sum and bring proceedings for any balance, or whether the assured must reject the FOS award and bring proceedings for the full sum.