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You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Chapman & Anor, R (On the Application Of) v Financial Ombudsman Service Ltd [2025] EWHC 905 (Admin) (15 April 2025) URL: https://www.bailii.org/ew/cases/EWHC/Admin/2025/905.html Cite as: [2025] EWHC 905 (Admin) |
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KING'S BENCH DIVISION
ADMINISTRATIVE COURT
Strand, London, WC2A 2LL |
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B e f o r e :
(SITTING AS A JUDGE OF THE HIGH COURT)
____________________
THE KING -on the application of- MR GILES CHAPMAN AND MRS ANNA-KARIN CHAPMAN |
Claimant |
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- and - |
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FINANCIAL OMBUDSMAN SERVICE LIMITED |
Defendant |
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-and- |
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SANTANDER UK PLC |
Interested Party |
____________________
James Strachan KC (instructed by Georgina Surry of the Financial Ombudsman Service Ltd) for the Defendant
No attendance or representation for the Interested Party
Hearing dates: 25 March 2025
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Crown Copyright ©
Upper Tribunal Judge Ward :
The matter challenged
"[T]he ombudsman's decision that she had no jurisdiction was wrong in law, with regard to the bank's failure properly to comply with DISP1.6.2(f)R". (That provision is set out below).
The legal framework
"A complaint is to be determined by reference to what is, in the opinion of the ombudsman, fair and reasonable in all the circumstances of the case."
"In considering what is fair and reasonable in all the circumstances of the case, the Ombudsman will take into account:
(1) relevant:
(a) law and regulations;
(b) regulators' rules, guidance and standards;
(c) codes of practice; and
(2) (where appropriate) what he considers to have been good industry practice at the relevant time."
"The FCA must make rules providing that a complaint is not to be entertained unless —
(a) the complainant has referred it under the ombudsman scheme before the applicable time limit (determined in accordance with the rules) has expired; or
(b) in the case of a complaint other than a relevant complaint within the meaning of section 404B, the respondent agrees that the complaint should be entertained despite the complainant having referred it under the ombudsman scheme after the applicable time limit has expired."
"Purpose DISP 1.1.1(G): This chapter contains rules and guidance on how respondents should deal promptly and fairly with complaints in respect of business.
DISP 1.1.1A(G): This chapter is also relevant to those who may wish to make a complaint or refer it to the Financial Ombudsman Service."
"Complaints handling procedures for respondents
Effective and transparent procedures for the reasonable and prompt handling of complaints must be established, implemented and maintained by a respondent."
"[T]he respondent must, by the end of eight weeks after its receipt of the complaint, send the complainant: (1) a "final response", being a written response from the respondent which: (a) accepts the complaint and, where appropriate, offers redress or remedial action; or (b) offers redress or remedial action without accepting the complaint; or (c) rejects the complaint and gives reasons for doing so; and which: […] (f) indicates whether or not the respondent consents to waive the relevant time limits in DISP 2.8.2R […] by including the appropriate wording set out in DISP 1 Annex 3R."
"The Ombudsman cannot consider a complaint if the complainant refers it to the Financial Ombudsman Service:
(1) more than six months after the date on which the respondent sent the complainant its final response, redress determination or summary resolution communication; or
(2) more than:
(a) six years after the event complained of; or (if later)
(b) three years from the date on which the complainant became aware (or ought reasonably to have become aware) that he had cause for complaint;
…
unless:
(3) In the view of the Ombudsman, the failure to comply with the time limits in DISP 2.8.2R … was as a result of exceptional circumstances: or
…
...5) the respondent has consented to the Ombudsman considering the complaint where the time limits in DISP 2.8.2R or DISP 2.8.7R have expired…"
"If a respondent consents to the Ombudsman considering a complaint in accordance with DISP 2.8.2R (5), the respondent may not withdraw consent."
Previous legislative provisions and the 2015 changes
a. DISP 2.8.2R(5) provided that the Ombudsman could not consider a complaint brought out of time: "unless...the respondent has not objected, on the grounds that the time limits in DISP 2.8.2R or DISP 2.8.7R have been exceeded, to the Ombudsman considering the complaint" (emphasis added).
b. There was no DISP 1.6.2R(1)(f) (or equivalent) requiring a respondent to "indicate whether or not the respondent consents".
c. There was no provision preventing a respondent who had consented from subsequently withdrawing that consent.
a. DISP 2.8.2R(5) was amended to provide that the Ombudsman could not consider a complaint brought out of time "unless...the respondent has consented to the Ombudsman considering the complaint where the time limits in DISP 2.8.2R or DISP 2.8.7R have expired" (emphasis added).
b. The requirement in DISP 1.6.2R(1)(f) to "indicate" in a "final response" "whether or not the respondent consents" was introduced.
c. A respondent was no longer able to withdraw their consent; see [22] above.
Facts of the case
"Another lender did not time bar our complaint and chose to investigate. I trust you will follow the same logic on this complaint due to recent public awareness and media coverage of affected customers in general."
"…you have the right to refer your complaint to the Financial Ombudsman Service, free of charge – but you must do so within six months of the date of this letter.
If you do not refer your complaint in time, the Ombudsman will not have our permission to consider your complaint and so will only be able to do so in very limited circumstances. For example, if the Ombudsman believes that the delay was as a result of exceptional circumstances."
Further evidence
Interpretation of DISP
"(1) Ultimately it is the actual wording of a provision that must govern any decision as to its effect. (2) The Handbook should be read as a whole, taking an holistic and iterative approach, so that a preliminary view on one provision can be tested by reference to the rest of the relevant provisions. (3) The provision should be construed in the light of its overall purpose. (4) It should be construed on the basis that it is intended to produce a practical and commercially sensible result. The rules should be taken to be grounded in reality. The court should keep in proportion any drafting infelicities."
"66. [T]he general nature of DISP… is not like conventional legislation. Its drafting style is very different and it is intended to create a relatively informal and simple scheme for and on behalf of consumers. It is also not intended for respondents to have to deal with highly complicated legal concepts.
67. As the Judge rightly observed, at para 16 of his judgment, the purpose of the FOS, as reflected in DISP, is "to provide a consumer-facing, user-friendly, free-of-charge process for seeking redress without recourse to formal legal proceedings."
"There is no dispute as to the principles on which the provisions in DISP should be interpreted …. Technically speaking the provisions in DISP are not all made by the same body: … [It] includes rules and directions made by the FCA (including Chapter 1, which contains rules as to how respondents should deal with complaints), and rules made (and standard terms set) by FOS Ltd with the consent of the FCA (namely parts of Chapter 2, most of Chapter 3 and all of Chapter 4, which set out how the FOS considers unresolved complaints). But this does not affect their interpretation. They have obviously been drafted so as to produce a coherent whole, and the provisions in DISP must all be read together."
"Unless the context otherwise requires or unless otherwise stated in a particular sourcebook or manual, where italics have not been used, an expression bears its natural meaning. "
The principal authorities
"In my view, it is clear from the statutory scheme which I have set out above that the question whether a complaint is brought within 6 months as required by the rules or not is primarily a decision for the FOS, subject only to review in this court on usual judicial review grounds. In terms of the construction of the relevant limitation rules in the DISP regime, the question whether a complaint is brought within time or not cannot be categorised as turning on judgment of [precedent] fact in the sense of being factual determinations for this court to make for itself. Therefore, the decision of the ombudsman in the decision of 5 November 2009 has to be tested against the usual judicial review standards."
"72. I am satisfied, however, that in the context of this statutory scheme access to the compulsory jurisdiction of FOS, with its enhanced benefits or burdens, is determined by reference to limiting conditions stated in objective terms. That being the case, in my judgment, this is a case where the FOS decision was one of precedent fact and, upon its being challenged in judicial review proceedings, it is a decision which the court has to take, rather than being limited to review the decision of FOS on conventional judicial review grounds.
73. If I were wrong in that analysis, however, I am satisfied that the nature of the decision is such that, as Lady Hale identified in Croydon, there is a right or wrong answer. It is not a question where Parliament and/or FCA intended the issue to be an evaluative issue, to be determined by FOS subject to the control of the courts on the ordinary principles of judicial review and where, within the limits of fair process and Wednesbury reasonableness, there are no clear-cut right or wrong answers.
74. Thus, if I were wrong that the question is one of precedent fact, nonetheless I must consider whether the decision of FOS in relation to whether Mr Lochner was an eligible complainant was right or wrong. If, in my judgment, it was wrong it would necessarily have involved a misdirection in law so as to render FOS's decision challengeable by way of judicial review."
"I accept the proposition that the FSMA should not be construed so as to make the FOS master of the limits of its jurisdiction, right or wrong. It is for the Court to decide whether it has acted with or without jurisdiction. It cannot act without jurisdiction simply because its error was reasonable. It is a matter of statutory construction as to how the limits of its jurisdiction are resolved: what decisions are challengeable only on traditional judicial review grounds and what decisions require a different approach, whether one in which the court decides the law, finds the facts and applies the law to the facts, deciding whether the FOS' decision was simply right or wrong and considering new evidence if it wishes, or one in which the Court decides the meaning of the words at issue, and the FOS finds the facts and applies the correct meaning in law to them as a matter of its own reasonable judgment, or one in which the Court decides, on the facts found by the FOS, whether the application of the law to them is correct rather than reasonable. Of course, the fact finding is subject to review on traditional grounds."
"Bankole was therefore rightly decided: it concerned the FOS' judgment on a procedural aspect of a complaint. Parliament cannot have intended that the question of whether a complaint was made to the FOS on one day or another was for determination anew by the High Court. It is distinguishable from Bluefin on very clear grounds. There it was far from a procedural issue but one which, if the FOS were wrong, meant that it would be deciding that someone who was not eligible on the facts to complain was indeed eligible, and so would be giving itself jurisdiction which it did not have. The language there was not so wide or uncertain as to its scope as to put it into the realms of the South Yorkshire Transport case."
"…Of course, on any view, the FOS must direct itself correctly on the law, as to the meaning of words and phrases, and as to the defining characteristics which must be present for a phrase to apply. The FOS should expect that a reviewing court would regard its assessment of the way in which the law, correctly understood, applied to the facts, as at least persuasive. But that is not the complete answer. If the Court is persuaded that on the facts found by the FOS, the correctly understood law had been applied wrongly, the Court must rule that the FOS had no jurisdiction."
"The Judge was right to take the view that, generally speaking, issues of fact are for the Ombudsman to determine, subject to judicial review on conventional grounds such as irrationality or procedural unfairness. This is true even of facts which go to the Ombudsman's jurisdiction, i.e. 'jurisdictional facts'. The mere fact that a fact is a jurisdictional fact does not automatically render it a precedent fact, which has to be established to the satisfaction of the Administrative Court if judicial review proceedings are brought. Professor Paul Craig explains the position as follows in Administrative Law (9th edn, 2021), at para 17-031:
'The court should not … engage in de novo review merely because the allegation relates to a jurisdictional fact that conditions the existence of the public body's power.'
Ultimately the issue is one which turns on the correct interpretation of the statute which confers the jurisdiction on the relevant public body: see the decision of the Supreme Court in R (on the application of A) v Croydon London BC, R (on the application of M) v Lambeth London BC [2009] UKSC 8, [2010] 1 All ER 469, [2009] 1 WLR 2557."
"In some complaints made to the FOS there may be a relevant dispute as to what are the terms of a contract, in particular where the contract is an oral one or where there are said to be terms which are to be implied into it by reason of the conduct of the parties. Such a dispute concerns questions of fact and, where it arises, I accept Mr Strachan's submission that the determination of those questions of fact is primarily for the FOS, subject to judicial review on conventional principles of public law. I would also endorse Mr Strachan's concession that the construction of a document such as a contract is a question of law and must be determined by the court itself. This is not a departure from conventional principles of public law; it is simply an application of them, since one of those principles is that a public authority whose decisions are the subject of judicial review must get the law right."
Submissions for the claimants
"…the Ombudsman had to interpret the law correctly, and reach rational findings of fact, but that it was for the Court to decide whether his application of the law to the facts was wrong, and not whether it was reasonable. …..[A]lthough the Ombudsman's fact-finding was reviewable only on Wednesbury grounds, the same did not apply to his application of the law to the facts."
"I've taken into account Mr C and Mrs C's view that Santander is unable to rely on the time limit set out in DISP 2.8.2(2)R, because it didn't say in its final response letter dated March 2022 whether or not it consented to waive this time limit – and it was required to do this.
The specific requirements for a valid "final response" are set out at DISP 1.6.2R. It says a valid final response is a written response from the respondent which, amongst other things:
"…(f) indicates whether or not the respondent consents to waive the relevant time limits in DISP 2.8.2R or DISP 2.8.7R by including the appropriate wording set out in DISP 1 Annex 3R…"
If a final response doesn't meet the regulatory requirements as set out in DISP 1.6.2R, then it isn't a valid final response. However, the reasons for why I think this complaint has been made too late aren't connected to the final response letter dated March 2022. So, whether or not this final response letter is valid makes no difference to my findings.
I also haven't seen anything within the relevant DISP rules which indicate a business' non-compliance with DISP 1.6.2.1(f)R should be treated by this Service as if the business has consented to waive the relevant time limit or that it is prevented from withholding its consent to waive the relevant time limit. It follows that I'm unable to set aside the relevant time limit on this basis."
"When assessing a respondent's response to a complaint, the FCA may have regard to a number of factors including the quality of response, as against the complaints resolution rules";
and (c) by an action for breach of statutory duty under s138D FSMA.
Conclusions
"It can be assumed that the FSA as regulator will seek to ensure that the rules ensured investment protection even where mistakes were made".