The Financial Ombudsman Service (FOS) decides disputes on the basis of an individual ombudsman’s opinion of what is ‘fair and reasonable’. They need not decide in accordance with the law or indeed with regulation. Their decision is not subject to appeal. It can only be challenged by judicial review on the basis that no reasonable ombudsman could have thought such an outcome is fair or reasonable. Most decisions are confidential. It is not open justice as we know it.
As a matter of policy, then, politicians decided to disapply what we know as the rule of law to financial firms when they created FOS. As we all know, the rule of law involves the creation of clear and certain legal obligations, so that legal outcomes are predictable. That way, that firms know precisely the rules they need to comply with and what will happen if they don’t.
Where there is doubt about what amounts to compliance with a rule in any transaction, the courts decide by applying
