Decision Upholds Financial Services Ombudsman Complaints Procedure

Originally published in the Commercial Litigation and Dispute Resolution Newsletter Winter 2011.

In the recent case of John Caffrey v the Financial Services Ombudsman(4) (the "Caffrey Case") the High Court has re-affirmed the position adopted in Ulster Bank Investment Funds Limited v the Financial Services Ombudsman(5) that the appellant of a Financial Services Ombudsman (the "FSO") decision must establish as a matter of probability that "the decision reached was vitiated by a serious and significant error or a series of such errors". Accordingly, an appeal to the High Court of an FSO decision is not a new hearing of a complaint but rather involves a review of the FSO's decision making procedure.

The Caffrey Case involved an appeal by John Caffrey against an FSO decision relating to a complaint he made against Bloxham Stockbrokers. The complaint focused on the content of a telephone conversation between John Caffrey and Bloxham. The FSO considered John Caffrey's complaint without holding an oral hearing and found in favour of Bloxham. John Caffrey appealed the procedural decision not to hold an oral hearing, claiming that the conflict of written evidence between the parties made it imperative that the FSO hold an oral hearing, and the failure to do so amounted to a serious and significant error in law and in fact, which vitiated the FSO's decision.

In considering the appeal the court noted that the FSO enjoys a broad discretion as to whether or not to hold an oral hearing. The FSO had submitted that at no stage during the investigation of the complaint did either party request an oral hearing or suggest that one was necessary. The court considered that it was doubtful that the parties would have been in a position to give an accurate and detailed description as to the contents of a short...

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