The Financial Ombudsman Service’s maximum binding award will be increased to £150,000 from the current limit of £100,000.

The change will come into force on 1 January 2012 and will only apply to complaints referred to FOS on or after 1 January 2012.

How a decision – which will soon mean a binding award of up to £150,000 – can be said to be “fair and reasonable” when a court of law could not reach the same outcome remains a sore point for those in the firing line.

And that is before one considers that, in so far as time limits are concerned, there is no 15 year long-stop date, in the same way that non-regulated firms are protected from stale claims by the Limitation Act 1980.

Other pressures abound – for example, the likely increase in professional indemnity insurance premiums and the drain on capital caused by the ever increasing FSCS levies.

Whilst giving consumers confidence in dealing with an FSA regulated firm is laudable, it is very easy to see why many IFA and broker businesses are under severe pressure.

We are likely to see more attempts to judicially review its decisions. It will be interesting to see if the courts will be able to find a way through the FOS’s very wide statutory authority.

Posted by Jonathan Newbold, who specialises in professional negligence, financial services and commercial dispute resolution; advises insurers on policy wording and coverage matters.

Jonathan Newbold
0115 976 6581
jnewbold@brownejacobson.com