Clark v In Focus Court of Appeal ruling

The judgment overturns a High Court ruling that meant a complainant could accept a maximum monetary award from the FOS and then bring a civil claim through the courts to sue for any additional losses.

Rob Morris, Partner at RPC, said: “It has taken over ten years to resolve this but it is at last clear that once a FOS award has been accepted it is final and binding on both the firm and the complainant.

“Without this clarification, complainants could use the informal complaints procedure of the FOS to get compensation from a firm and then use the courts to try to top up their compensation.

“This was seen by financial services firms as an abuse of process, creating a ‘loophole’ for complainants to have the best of both worlds.

“The original rules on this made it very clear that customers were supposed to use either the FOS or the courts and it is a real shame that it has taken this long to for the courts to confirm this.”

What the ruling means

• An individual (or small business) with a grievance against a financial services firm has two choices to make: first, whether to pursue a complaint before the FOS or not; and second whether to accept a final determination or not.

• At both points the complainant is free to decide to pursue a remedy before the civil courts instead.

• If they do, they know that they can seek full compensation for any loss that has been suffered, regardless of the amount.

• However, they also know that the process will involve more formality, a more rigorous examination of the evidence and will not be free of cost.