UK: High Court rules against Financial Ombudsman Service in judicial review

Why should I read this?

The King (Barclays Bank UK Plc & Others) v Financial Ombudsman Service [2026] EWHC 1555 (Admin) is a significant judgment for UK firms who deal with the Financial Ombudsman Service (“FOS”) and provides much needed clarity on the extent of FOS’s jurisdiction.

The case involved an unprecedented intervention by the Financial Conduct Authority, which had joined the proceedings to support the claimant banks.

The court quashed decisions by FOS that it had jurisdiction to investigate and provide a remedy in relation to credit decisions that occurred over six years before the relevant complaints were made (one as far back as 1998).  FOS could not apply the same approach to limitation as applies to “unfair relationship” claims in the courts and had to apply a strict interpretation of the time barring rules in DISP 2.8.2 R.

What should I do?

Firms who deal with FOS complaints should discuss this judgment with their legal, compliance and complaints teams to aid their understanding of FOS’s jurisdiction.  If FOS has adopted the same approach in complaints against your firm, you should consider asking them to review this in light of the judgment.

If you have irresponsible lending complaints on hold pending the outcome of this decision FOS may soon reach out to progress these.  You should consider whether FOS’s approach to such complaints is consistent with the judgment.

What were the key findings?

Barclays, NatWest, Santander and Vanquis bank issued claims for judicial review in October 2024 to challenge decisions made by FOS in relation to its jurisdiction over irresponsible lending complaints concerning credit cards and overdrafts.  The complaints were part of a wave of irresponsible lending complaints brought to FOS, most involving claims management companies.

The complaints involved credit decisions which occurred more than six years before the complaints were brought.  Historically, FOS took the approach that complaints about such events were time barred and outside of its jurisdiction (see 2.8.2 R of the FCA’s DISP rules on complaint handling).  However, FOS changed its approach having considered the Supreme Court’s judgment in Smith and another (Appellants) v Royal Bank of Scotland (Respondent) [2023] UKSC 34.  It decided that, because credit card and overdraft agreements were subject to the “unfair relationship” regime under s140A-D of the Consumer Credit Act, it could effectively adopt the approach to limitation taken by the courts in such claims.  This led to FOS concluding that, as the relationships between the banks and the complainant customers had not come to an end, time for the purposes of DISP 2.8.2 R had not started running.  The complaints were not time barred and it had jurisdiction to investigate and provide redress for events throughout the duration of the credit relationship.  In one of the complaints, that meant FOS claimed jurisdiction over events dating back to 1998.

A two-day hearing in July 2025 focused mainly on FOS’s position that a “corrective responsibility” could be derived from Smith and Plevin v Paragon Personal Finance Ltd [2014] UKSC 61 obligating lenders to correct an unfair relationship once one had arisen. FOS argued that the “corrective responsibility” led to continuing omissions by lenders to redress unfairness and that it had jurisdiction to investigate those omissions as complaints in their own right.  As those omissions were ongoing, FOS’s position was that complaints about them could not be time barred and it could investigate the fairness of the relationship throughout its duration. The July 2025 hearing was ultimately part-heard, concluding with a one-day hearing on 25 March 2026.

Judgment was handed down on 24 June 2026.

In quashing the decisions, the Hon. Mr Justice Dexter Dias found as follows in relation to FOS’s key arguments:

• No corrective responsibility could be derived from Plevin or Smith, which mentioned no such duty.
• Neither did these authorities support the proposition that an ongoing failure to correct unfairness amounts to a continuing series of distinct and discrete events for the purposes of DISP 2.8.2 R.  The nature of an “event” was never considered in Plevin, which involved a county court claim and not a complaint to FOS.  
• FOS’s jurisdiction over a complaint means it has power to investigate and provide redress for the relevant event.  Redress awards must be connected to the event that FOS has jurisdiction to investigate and FOS’s discretion to award fair redress does not allow it to award redress for time barred events which fall outside of its jurisdiction.    

The judge found that FOS’s concept of corrective responsibility cut across the statutory purpose of the rules and legislation which delimit the jurisdiction of the ombudsman scheme and the ambition to prevent stale complaints.

The judge was also persuaded by arguments that, as per R(Mazarona Properties Ltd) v FOS [2017] EWHC 1135 (Admin), the redress of unfairness created by the provision of a financial service is not in itself a financial service and cannot therefore fall within FOS’s jurisdiction.

The FCA’s intervention, to oppose FOS’s new interpretation, was noted by the judge as “striking” and he observed that the FCA was “greatly concerned” at the new, expanded and expansive jurisdiction it had adopted.  In submissions, the FCA had said that FOS’s new formulation was contrary to the time limit it created as statutory regulator under its rule making powers.

FOS’s conduct during the case was criticised by the judge, who referred to “modulations” in its case and was persuaded that in its skeleton argument for the part-heard hearing FOS sought to resile from its earlier-stated position.  The judge commented that this caused “much unnecessary forensic heat and disputation”.