IFG Financial Services Ltd, R (on the application of) v Financial Ombudsman Services Ltd & Ors

IFG Financial Services Ltd, R (on the application of) v Financial Ombudsman Services Ltd & Ors

The Ombudsman took into account the relevant law on causation but was entitled to depart from it if he considered that a different result was fair and reasonable in all the circumstances. The Ombudsman concluded that it was not fair or reasonable for the claimants to avoid liability for losses resulting from unsuitable investment advice, even if the loss was caused by unforeseeable fraud. This was a conclusion he was entitled to reach under the scheme, and his decision was not irrational or perverse.

Parties
Claimant: IFG Financial Services Ltd; Defendant: Financial Ombudsman Services Ltd; Interested Parties: Mr and Mrs Jenkins
Jurisdiction
England and Wales
Judgment Date
19 May 2005
Procedural Posture
Judicial Review / Final Judgment
Outcome
Application for judicial review dismissed
Legal Topics
Ombudsman Scheme, Compensation for Investment Loss, Judicial Review of Ombudsman Decisions, Causation in Financial Advice
Financial Services Law Administrative Law Ombudsman Scheme Compensation for Investment Loss Judicial Review of Ombudsman Decisions Causation in Financial Advice

Case Brief

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Parties

IFG Financial Services Ltd

Claimant

Financial Ombudsman Services Ltd

Defendant

Mr and Mrs Jenkins

Interested Parties

Procedural Posture

Judicial Review / Final Judgment

Legal Issues

  1. 1 Whether the Financial Ombudsman was required to follow English law on causation when awarding compensation for investment losses caused by unforeseeable fraud
  2. 2 Whether the Ombudsman took into account the relevant law as required by the scheme rules when making the compensation award

Ratio Decidendi

The Ombudsman took into account the relevant law on causation but was entitled to depart from it if he considered that a different result was fair and reasonable in all the circumstances. The Ombudsman concluded that it was not fair or reasonable for the claimants to avoid liability for losses resulting from unsuitable investment advice, even if the loss was caused by unforeseeable fraud. This was a conclusion he was entitled to reach under the scheme, and his decision was not irrational or perverse.

Court Disposition

Application for judicial review dismissed

Orders

  • Application for judicial review dismissed
  • Claimant to pay defendant's costs, summarily assessed at £11,870