Financial advice negligence claim changes legal landscape
However, the recent High Court professional negligence claim of Clark v In Focus Asset Management & Tax Solutions has changed all that, with the court ruling that FOS claimants are at liberty to make subsequent claims through the civil courts where there is a case for compensation above the FOS statutory maximum of £150,000.
As it stands, the FOS is a free and non-contentious service which, despite being effective in securing compensation in claims valued at within the statutory limit, does not have the power to award larger sums.
The Clarks are represented by Ian Oliver of George Ide LLP and Clive Wolman, counsel. The Clarks claim centred on the issues of negligent financial advice given to the Clarks by In Focus; advice that they say caused them to lose in excess of £500,000.
As such, even though the couple signed an FOS form in which they accepted its ruling and its compensation award as final, they also included a rider in which they reserved the right to pursue further compensation through the civil courts.
Interestingly, although this rider showed a great deal of foresight on the part of the claimants, it was not crucial to the High Court’s decision to allow them to pursue compensation above the FOS limit.
The decision conflicts with a 2010 High Court ruling which determined that once a claimant has received judgement in a “tribunal of competent jurisdiction” it cannot pursue the same claim in the courts – the so-called “merger” principle.
The financial advice professional negligence claim has attracted a great deal of interest, with law firm Collyer Bristow rating it as one of the ten most important banking cases of the year.
The defendant is appealing the decision.News