Unpaid FOS decision

[Stevezzqq]

Explanatory notes concerning enforcement of an ombudsman.pdf


This may be of use.

[Stevezzqq]

I emailed Cardiff Court with an extract from the FCA Handbook, mentioning that a respondent must comply with a FOS decision and its enforceable in Court. I mentioned the specific paragraphs in the Handbook:

DISP 3. 7. 12®06/04/2008RP and

DISP 3. 7. 13(G)06/04/2008RP

The Act I referred to is the Financial Services and Markets Act 2000 (FSMA)

[R0b]

An application to the court usually requires some kind of hearing, though not necessarily a directions hearing. The enforcement of an award made by the FOS doesn't fall within the usual claims procedure rather it should be treated like a summary judgment application i.e. you make the application, the court sets a date for a hearing to take place and, absent any exceptional reasons why the award should not be turned into a court order, the court should grant it, that's because per FSMA, the acceptance of a decision becomes legally binding between the parties - my explanation below should explain why the normal process should not be followed.

Like I said before, as these types of applications are uncommon in the court system, I am not surprised the judge wants to have a directions hearing and possibly an opportunity to understand the basis of the application. If I were you, and although it is just a case management hearing, I would try and pre-empt what the judge might want to know about this kind of application you are making. It might be sensible to put together a small bundle of relevant documents about the FOS process, enforcement of a judgment and file it with the court with a summary page at the front (something like the below).

Enforcing an award issued by the Financial Ombudsman

1. Section 229(2) Awards made by the FOS may be a money award or a direction, or both.

2. If the complainant (you) notifies the FOS that they accept the award as determined by the FOS, it becomes legally binding on the respondent (the defendant) and the matter is final.

3. Section 229(8)(b) states that if the respondent fails to comply with the FOS decision and award, the complainant may enforce that award as described in Part III of Schedule 17 of FSMA 2000. Paragraph 16 of that Schedule confirms:

16 A money award, including interest, which has been registered in accordance with scheme rules may -

(a) if the county court so orders in England and Wales, be recovered under section 85 of the County Courts Act 1984 (or otherwise) as if it were payable under an order of that court

4. CPR 70.5 deals with enforcement of decisions of bodies other than the High Court and county court, and compromises enforceable by enactment and per CPR 70.5(3), an application must me made in accordance with the procedure set out in CPR 70.5(4) to (7). The key points are that the application:

4.1 may be made without notice;

4.2 Unless the court orders otherwise, it must be made to the court for the district where the person against whom the order is sought resides or carries on business.

4.3 The application notice must be in the form, and contain the information required by, CPR PD 70. PD 70.4.2 confirms that the application must be made using form N332A and PD 70.4.3 describes what needs to be included in the form.

5. Enforcement of awards have been recognised by the courts, for example in the the Court of Appeal case, Clark v In Focus Asset Management & Tax Solutions Ltd [2014] EWCA Civ 118, the court recognised the enforcement of awards made by the FOS and also concluded that a person who accepts an award, cannot bring a separate claim for proceedings to pursue a claim which he already complained of to the FOS (link to decision here). The correct process is to enforce the award using Form N332A.

What you have to remember is that there is a general assumption from the court staff and judges that you would have to begin proceedings either under Part 7 (disputed proceedings) or Part 8 (proceedings that are not substantially in dispute). There is nothing within the CPR that says Part 7 or Part 8 proceedings should be started together with N332A form, rather it says Form N332A is required, hence my assumption that it should be treated like a summary judgment application.

If you put a bundle together to that effect, properly paginated and the relevant documents referenced, I think it would go a long way towards helping the judge understand what steps to take next and/or give you good reason to argue that in reality there should be no further hearing as given that FSMA says the award is legally binding, the court should give effect to it. The result is that the court turns the award into an order and you can then take enforcement action against the respondent.

The bundle should be filed with the court, a covering letter but you can do this by email just make sure to do it plenty of time in advance and in the email subject line, put the names of the parties and the date of the hearing. For example, Party A v Party B (Claim No.XXXX) - Directions Hearing XX/XX/XXXX at XX:XX.

If you need help putting a bundle together, this link will give you a good starting point: How to prepare a trial bundle and index | Advicenow

However, if the award does stipulate a specific money award or gives a direction as to how the money should be calculated, then I think it would be sensible for the court to order a hearing to determine the actual amount the respondent has to pay, and allow them an opportunity to reply or argue how it should be calculated if they do not agree with your own method.

Bear in mind, not every judge specialises in the subject matter they are presiding over so you need to treat them like they know absolutely nothing and walk them through it. On the other hand you might not need to say anything if this is the judge's area of expertise as they may already be aware of what you are trying to achieve.

[atticus]

CPR70.5: https://www.justice.gov.uk/courts/pr...art70#IDAQB0HC

Note the word "may" as used in the rule and in the text quoted in post no 18, which also includes "if the court so orders". Those words suggest that it is not a given that an order will be made, although I would expect that it would need a powerful argument not to make the order that is sought.

[dslippy]

Your optimism is a virtue, but in this case it seems to be mislaid. Go along with what you are requested.

It would not suprise me if the company paid up in the mean time.

[R0b]

CPR70.5: https://www.justice.gov.uk/courts/pr...art70#IDAQB0HC

Note the word "may" as used in the rule and in the text quoted in post no 18, which also includes "if the court so orders". Those words suggest that it is not a given that an order will be made, although I would expect that it would need a powerful argument not to make the order that is sought.

I agree, for example if there is a moratorium where the company is in liquidation or administration, or if the company has dissolved then the court is likely to choose not to make an order where to do so would overrule other laws

[atticus]

and that brings us back to my first post, my concerns about this company's ability to pay.

[Stevezzqq]

Thank you so much guys. Your advice and assistance is greatly appreciated.

I will print off and study the responses and then come back to you all.

[Stevezzqq]

Thanks again guys.

I would like to attempt to deal with each contributor in turn.

So I will begin with the post by Rob, then Atticus, then DSLIPPY.

I will write a new comment as I think it might be easier for you to respond if you feel it’s necessary.

[Stevezzqq]

Rob

I appreciate that it now seems unlikely that I can simply send in my upheld FOS decision with a completed N322A.

This has surprised me as everywhere I have read, gives the impression that it is all I have to do.

Of course, people comment on the fact that this is such a rarity, that most Judges have never come across it before.

Having said that and trying to be practical, maybe my situation might set a precedent and for future cases may become much simpler?

Rob, I appreciate all your advice and as this is way beyond my pay grade, I have appointed a lawyer who deals regularly with complaints against IFA’s for unsuitable advice.

The reason I am here asking these questions, is simply my own curiosity and wanting to have a thorough understanding of the situation.

My other reason, is that there lots of other complainants behind me, who are all looking on with great interest.

I do not wish to try and “guide” my lawyer as to the steps to take, as he is the expert, just like yourself.

Thanks again

[Stevezzqq]

Atticus

Thank you for your help and the link.

You make a perfect point, by mentioning the word “may”

As a result of the advice by yourself and others, I felt I need professional help.

Once this is all over, I will put everything together and forward it to the FOS, FSCS and the FCA and maybe they might accept that an upheld FOS decision, is not the result after 90 minutes, plus and additional 30 minutes.

We all still have the penalty shoot out!

In my case, three years will turn into 3 and a half years!

Regarding your very valid comment about whether the firm will have the funds to pay, I should point out that the FSCS will pay me the redress decided by the FOS.

The others behind me, will also be paid by the FSCS, but only when the firm has been declared in default, or has been liquidated/wound up.

So, the firm not being able to pay, is an important issue, however, closing the firm down, will speed up the compensation for those behind me.

Thank you.

[Stevezzqq]

DSLIPPY

I would like to share your optimism that the firm will pay. This might happen, but probably at the very last minute.

You may be aware that the FOS can award redress up to £160k, but the FSCS is limited to £85k.

So the firm may simply offer to every upheld complainant
£85k even though the FOS may award up to £160k and say “close me down and you will still only get £85k.”

The firm is a going concern and probably makes circa £250k pa profit. But with 19 open FOS cases to be decided, it’s in the balance.

Thank you

[Stevezzqq]

Today I got paid in full!

Thank you everyone for all your excellent help and advice.

[dslippy]

Whether you want it or not, there will be a simplified hearing to transger the judgment to the county court for enforcement.

[atticus]

Today I got paid in full!

Thank you everyone for all your excellent help and advice.

Excellent news!