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Financial Ombudsman Service compensation limit increases to £350,000 on 1 April 2019

The Financial Conduct Authority (“FCA”) has published a policy statement detailing that the Financial Ombudsman Service (“FOS”) compensation limit of £150,000 will increase to £350,000 from 1 April 2019. This follows a Consultation on the topic of the FOS award limit, which was open between October and December 2018.  

The new limit of £350,000 applies to complaints about actions or omissions of firms, which took place after 1 April 2019. For complaints about actions/omissions occurring prior to 1 April, but referred to the FOS after that date, there is a smaller increase in the limit to £160,000. The policy statement further confirms that the financial awards limit will now automatically adjust annually in line with inflation.

Finally, the FCA has also announced that recourse to the FOS will now be available to larger small and medium-sized enterprises (“SMEs”) as well as individual consumers. To qualify, the SME must have an annual turnover of under £6.5 million, an annual balance sheet total of under £5 million, or fewer than 50 employees. This extension has been introduced by the FCA in recognition of the cost and time difficulties faced by consumers and SMEs when considering taking firms to Court. In particular, Andrew Bailey, Chief Executive of the FCA, stated that “…it is essential[that consumers and SMEs] can receive fair compensation from the Financial Ombudsman Service when things go wrong”.

These changes could significantly increase the value and number of financial awards made as a result of complaints to the FOS. Firms should also note that the implementation period for these new rules is relatively short.

© Copyright 2019 Squire Patton Boggs (US) LLP

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About this Author

Garon Anthony, Squire Patton Boggs, litigation attorney
Partner

Garon Anthony is a partner in the Litigation Practice Group. He has specialised in dispute resolution work since he qualified as a solicitor and has considerable experience in general corporate and commercial litigation work, acting for both private and public sector clients.

Garon regularly resolves disputes for clients in the financial services/insurance sector. That encompasses professional negligence, fraud issues/recovery processes, dealing with claims and complaints by customers of the mis-selling of retail products, handling insurance policy coverage disputes for corporate...

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Mariyam Harunah Debt Recovery Attorney Squire Patton Boggs
Associate

Mariyam regularly acts for a diverse client base, including, SMEs, FTSE 100 and 250 corporations, public bodies, developers, insurers and individuals.

Mariyam has experience advising on a wide-range of matters of both a contractual and tortious nature, including breach of contract, breach of warranty, misrepresentation, defamation, professional negligence, debt recovery and insurance.

Experience

  • Assisting on an approximately £160 million multi-action and multi-defendant claim following the sale of a company to investor clients.

  • Acting on a variety of disputes for clients seeking the recovery of unpaid monies owed pursuant to contract.

  • Acting on a portfolio of financial mis-selling claims for a leading international bank.

  • Advising a variety of clients upon termination of contract issues.

  • Acting for industrial manufacturers and suppliers in the defence of contractual and tortious disputes with technical complexities, arising out of the provision of allegedly defective products.

  • Assisting in the provision of bespoke and strategic advice to a national regulator dealing with persistent defamation and harassment.

  • Acting for a leading hire purchase provider in enforcement proceedings.

  • Assisting on a £500,000 negligence claim by a leading supermarket arising out of property damage and business interruption at one of its warehouses.

44 121 222 3175