Barclays Bank UK Plc & Ors v Financial Ombudsman Service Limited

The High Court has quashed four jurisdiction decisions by the Financial Ombudsman Service (“FOS”) in cases involving alleged unfair credit relationships under s.140A of the Consumer Credit Act 1974 (“CCA”). In each case FOS asserted jurisdiction to consider the complaint in respect of the full duration of the credit relationship. That was contested on the basis that the events complained about extended more than six years prior to the complaint, where reliance was placed on the time limit set out in the Financial Conduct Authority’s Handbook in DISP 2.8.2R. The affected lenders (Barclays, NatWest, Santander and Vanquis) judicially reviewed FOS’s decisions. The FCA intervened and submitted in agreement with the claimants that FOS had erred in law. The High Court (Dexter Dias J) upheld the claims and ruled that FOS’s approach was wrong in law because it was based on an alleged “corrective responsibility” under s.140A of the CCA which did not exist ([81]-[171]). The High Court also rejected FOS’s submission that alleged positive acts within the six years preceding the complaint could found jurisdiction over the full duration of the credit relationship ([172]-[221]). In addition the High Court rejected FOS’s defence under s.31(2A) of the Senior Courts Act 1981 contending that its errors were immaterial: as the High Court found, FOS’s decisions were based on a “fundamental error of law” and if FOS had correctly directed itself the result would have been substantially different ([236]-[237]).

Javan Herberg KC and Ajay Ratan acted for one of the claimants.

Monica Carss-Frisk KC and Celia Rooney acted for the FCA.

The judgment is available here.