Emptage v Financial Services Compensation Scheme Ltd

Emptage v Financial Services Compensation Scheme Ltd

FSCS misdirected itself and acted irrationally by failing to compensate Ms Emptage for the unaffordability of the mortgage, which was the direct result of negligent mortgage advice. The compensation awarded did not restore her to the financial position she would have been in absent the breach, contrary to the requirements of fair compensation under the scheme.

Parties
Claimant: Charmaine Emptage; Defendant: Financial Services Compensation Scheme Limited
Jurisdiction
England and Wales
Judgment Date
11 October 2012
Procedural Posture
Judicial Review / Judgment
Outcome
Decision of FSCS quashed; FSCS ordered to reconsider compensation.
Legal Topics
Compensation Scheme, Negligent Mortgage Advice, Regulated Activities, Judicial Review
Financial Services Law Administrative Law Compensation Scheme Negligent Mortgage Advice Regulated Activities Judicial Review

Case Brief

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Parties

Charmaine Emptage

Claimant

Financial Services Compensation Scheme Limited

Defendant

Procedural Posture

Judicial Review / Judgment

Legal Issues

  1. 1 Whether FSCS misdirected itself and acted irrationally in limiting compensation for negligent mortgage advice to £11,522.98
  2. 2 Whether FSCS failed to provide fair compensation as required under COMP 12.4.17 for losses arising from unsuitable mortgage advice

Ratio Decidendi

FSCS misdirected itself and acted irrationally by failing to compensate Ms Emptage for the unaffordability of the mortgage, which was the direct result of negligent mortgage advice. The compensation awarded did not restore her to the financial position she would have been in absent the breach, contrary to the requirements of fair compensation under the scheme.

Court Disposition

Decision of FSCS quashed; FSCS ordered to reconsider compensation.

Orders

  • The FSCS decision awarding £11,522.98 is quashed.
  • FSCS must reconsider the question of compensation in light of the judgment and principles stated.