What To Do After Obtaining A Financial Ombudsman's Decision

When FOS give their final decision, they recommend you obtain independent legal advice before deciding whether to accept or reject their decision.

If the decision is in your favour, it may seem like an obvious choice to accept the decision. However, the choice of accepting or rejecting the FOS decision is not one which should be taken lightly.

The difference between accepting or rejecting the FOS decision can determine your next steps.

If you accept the FOS decision, you and the business against which you made the complaint, are bound by the FOS decision.

In some cases, this may mean the business owes you a financial award. If the business does not make payment, in accordance with the FOS decision, you may be able to begin legal proceedings to enforce the decision.

However, it is important to note that FOS has a limit on the amount they can award. The current award limit is £430,000 for complaints referred to FOS on or after 1 April 2024 about acts or omissions by businesses on or after 1 April 2019.

Therefore, if you consider your complaint is worth more than the FOS limit, it might not be worth accepting the FOS decision.

If you do not want to accept the FOS decision, you do not have to, but it does mean that FOS’s involvement comes to an end.

Rejecting the FOS decision may allow you to take legal action against the business. Whilst the FOS decision would not be binding, it could serve as useful evidence within proceedings to demonstrate that FOS consider you are owed money by the business. However, while FOS decide on what is fair, a court will decide on legal wrongdoing.

In 2016 a case was decided by the High Court which originated from a situation where the consumer rejected the FOS decision and decided to take legal action against the business.

In this case, the FOS decision was against the consumer. The judge overturned the original decision of FOS, deciding that the ombudsman had made incorrect assumptions about the tax implications of the financial products recommended by the business and so had been wrong in finding against the consumer.

The court ordered the business to pay damages of £223,000 and suggested that even if FOS had found in favour of the consumer, the consumer may still have been wise to reject the award, as her loss exceeded the ombudsman’s upper limit at the time.

This case demonstrated that whilst FOS offers a beneficial service to consumers in most cases, it is not always right.

We have previously had clients who have come to us having accepted the FOS decision, only to find out, having instructed an actuary to calculate their loss, that the FOS award is considerably less than they have lost financially.

Whilst FOS may recommend that the business pays you the difference, they are not obligated to do so. Therefore, it is important to carefully consider all of your options when deciding whether to accept or reject a FOS decision.

At Bell Lax our experienced commercial litigation team can assist in making a complaint to FOS, enforcing decisions, and advising you on accepting or rejecting the FOS decision.

We can also put you in contact with actuaries who can assist in calculating your loss.

For a free no obligation discussion, please contact us on 0121 355 0011 to see how we may be able to help you.