Court or Financial Ombudsman Service?
When taking on a financial services claim, we often have to consider whether to use the free Financial Ombudsman Service, or to "bash on" with legal action. We normally find that getting the claim properly proven and quantified, using the Pre-Action Protocol for professional negligence claims, can produce a good outcome without the need to make that choice. However, where the firm or its insurers dig their heels in, the best route to take depends on the facts and amount of each claim.
It's been clarified by the Court of Appeal that if a claimant uses the FOS and accepts their decision, they cannot then go on and issue Court proceedings for any more money.
Why would anyone want to do that, anyway?
The main reason lies in the FOS's compensation limit. The FOS has power to order a regulated firm to pay up to £150,000. It can recommend more is paid, but this isn't binding on the firm.
Many people with claims worth more than £150,000 have nevertheless submitted them to the FOS and accepted their favourable award. With their £150,000 safely in the bag, they've wanted to go on and sue for the balance. The Court of Appeal has put a stop to that now.
There is also some case authority for refusing a successful claimant their legal and court costs where the FOS was available as a free-of-charge dispute resolution service.
So, it's rather important to consider how much use to make of the FOS scheme when trying to resolve an investment, pension, insurance or mortgage related claim. There are all sorts of other reasons why having FOS investigate a claim might assist a claimant to succeed whether or not the award is accepted later.
You can find out more here - (article from The Telegraph).