British Bankers Association, R (on the application of) v The Financial Services Authority & Anor [2011] EWHC 999 (Admin) (20 April 2011)

British Bankers Association, R (on the application of) v The Financial Services Authority & Anor [2011] EWHC 999 (Admin) (20 April 2011)

Section 150(2) FSMA only removes the right of private action in court for breach of the Principles, but does not prevent the Principles from being relevant obligations for the purposes of complaints handling or Ombudsman redress. The Ombudsman is entitled, and indeed required, to take the Principles into account in determining what is fair and reasonable in all the circumstances of a complaint. The FSA's Policy Statement and the FOS's guidance are lawful in treating the Principles as relevant to redress, and there is no statutory basis for excluding them from consideration in the complaints process.

Citation
[2011] EWHC 999 (Admin)
Parties
Claimant: British Bankers Association; First Defendant: Financial Services Authority; Second Defendant: Financial Ombudsman Service; Interested Party: Nemo Personal Finance Ltd
Jurisdiction
England and Wales
Judgment Date
20 April 2011
Procedural Posture
Judicial Review / High Court Judgment
Outcome
Claim dismissed
Legal Topics
Payment Protection Insurance (ppi), Ombudsman Scheme, FSA Principles, Actionability of Regulatory Rules, Consumer Redress, Statutory Interpretation
Financial Regulation Administrative Law Consumer Protection Payment Protection Insurance (ppi) Ombudsman Scheme FSA Principles Actionability of Regulatory Rules Consumer Redress +1 more

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Parties

British Bankers Association

Claimant

Financial Services Authority

First Defendant

Financial Ombudsman Service

Second Defendant

Nemo Personal Finance Ltd

Interested Party

Procedural Posture

Judicial Review / High Court Judgment

Legal Issues

  1. 1 Whether the FSA's Policy Statement 10/12 unlawfully treats non-actionable Principles as giving rise to obligations to customers and compensation.
  2. 2 Whether the FSA can require firms to provide redress for breaches of Principles not actionable under s150(2) FSMA.
  3. 3 Whether the Financial Ombudsman Service can take the FSA Principles into account in determining complaints and awarding redress.

Ratio Decidendi

Section 150(2) FSMA only removes the right of private action in court for breach of the Principles, but does not prevent the Principles from being relevant obligations for the purposes of complaints handling or Ombudsman redress. The Ombudsman is entitled, and indeed required, to take the Principles into account in determining what is fair and reasonable in all the circumstances of a complaint. The FSA's Policy Statement and the FOS's guidance are lawful in treating the Principles as relevant to redress, and there is no statutory basis for excluding them from consideration in the complaints process.

Court Disposition

Claim dismissed

Orders

  • Application for judicial review refused
  • No unlawful action found in FSA Policy Statement 10/12 or FOS guidance