Cleon Catsambis successfully represented the Financial Ombudsman Service in a significant jurisdictional judicial review challenge.
The court had to determine whether the Ombudsman had jurisdiction to consider the withdrawal of a provisional redress determination by a bank within the Financial Conduct Authority’s past business review of sales of interest rate hedging products. This required a forensic examination of the statutory scheme and the provisions of the FCA Handbook (in particular DISP 2.3.1R).
The claimants, three related property companies under the Mazarona banner, asserted that the Ombudsman had erred in concluding that she did not have jurisdiction to consider their complaint that the bank had acted unfairly and unreasonably in withdrawing its original offer. They claimed, inter alia, that a firm’s complaints handling process was part and parcel of the regulated activity of selling IRHPs or was ancillary to that activity.
The Ombudsman, represented by Cleon Catsambis, argued that its compulsory jurisdiction did not extend to the conduct of banks within the voluntary, separate and discrete FCA Review. Whilst the Ombudsman could (and on the facts did) consider the underlying mis-sale, it was not the role of the Ombudsman to review the FCA Review.
The Honourable Mr Justice Mitting accepted the Ombudsman’s interpretation and dismissed the claim. Having regard to the statutory scheme and the provisions of the FCA Handbook, the Claimants had not brought an eligible ‘complaint’ because it did not relate to the provision, or failure to provide, a ‘financial service’. Further, the withdrawal of a provisional redress determination was not a regulated activity.
This decision re-affirmed the distinct jurisdictions of the Ombudsman, the FCA and the courts. Whilst the mis-sale of an IRHP is reviewable by the Ombudsman, it is not appropriate for the Ombudsman to consider the manner in which the FCA Review is conducted.