Breaking news….FOS awards are binding!
Consumers have lost the right to sue after accepting an award from the Financial Ombudsman Service (FOS) as has been seen in the recent case of Clark and Another v In Focus Asset Management & Tax Solutions Limited.
It was thought that many would be able to get full compensation when the awarded amount was over the £150k FOS cap by taking the claim to court, but there has been legal uncertainty about whether this should be available.
Before this decision there were two opposing court rulings each for and against the right to sue for compensation through the courts if FOS had already given the maximum award of £150k to a consumer because of negligence, poor financial advice or the mis-selling of a financial product.
Consumers now have to consider the value of an award
There appears to be an underlying economic reason for the decision which, if people could sue for additional compensation in court, would have pushed up the cost of financial advice.
Those who already lost over £150k from negligent advice, including individuals and small businesses will have been dealt a double whammy by this decision.
It means that consumers must carefully consider whether to accept an award or not because doing so will mean that they will no longer be able to get proper compensation from the court.
Seek professional advice following an award ruling
We strongly suggest that if anyone is in a position whereby FOS is about to make a ruling to award compensation following a claim, that legal advice is sought before it is accepted. Financial products are complex and specialist advice is needed. Losses can be substantially greater than it first appears, once expert auditors have checked the figures.
This decision makes it all the more important to obtain proper advice as to the compensation claim which you are entitled to and take the right course of action to obtain it because once accepted, a FOS award is now binding.
At Redress Law we specialise in financial mis-selling claims so if you have received poor financial advice and have suffered loss as a result, please do get in touch with us.
