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May 21, 2024

Court of Appeal unanimously dismisses Options judicial review

The Court of Appeal issued its decision yesterday (May 20) to dismiss Options UK Personal Pensions’ judicial review appeal.

Options (formerly Carey Pensions) sought a judicial review of a Financial Ombudsman Service (FOS) decision upheld against it.

The Judges agreed unanimously to dismiss the claim saying: “Taking all the matters into account, it cannot be said that the Decision was irrational and that a reasonable ombudsman could not have arrived at the same conclusion.”

Why did Options try and challenge the FOS?

The case centres on a complaint made by Mr Fletcher who invested £30,000 in Store First through an Options SIPP.

This investment was introduced to him by Commercial Land and Property Brokers (CL&P), an unregulated entity based in Spain. Mr Fletcher suffered significant losses and filed a complaint with the FOS. He argued that Options failed to conduct adequate due diligence on CL&P before accepting his investment.

The FOS found in favour of Mr Fletcher, concluding that Options didn’t meet the due diligence requirements stipulated by the FCA’s Handbook’s Conduct of Business Sourcebook (COBS).

The FOS determined that Options should have identified that CL&P’s director was listed on an FSA warning notice advising against dealing with him. It ruled that Options should compensate Mr Fletcher for his financial losses plus additional damages for distress.

Options Pensions were contesting the FOS decision for three main reasons:

  1. They argued that the Ombudsman awarded compensation in cases where a court wouldn’t and failed to explain why.
  2. They believed the Ombudsman was wrong in saying they had a duty to check the background of those who introduced members and selected investments.
  3. They felt the Ombudsman’s conclusions about their breaches of duty were unreasonable.

Options were initially refused permission to bring this judicial review claim in 2022. However, permission to appeal that decision and apply for a judicial review was later granted in March 2023.

What is the Court of Appeal’s decision against Options (Carey pensions)?

On May 20, 2024, the Court of Appeal dismissed Options (Carey Pensions) claim for a judicial review of the FOS’s decision.

The court found that the arguments against the Ombudsman’s decision did not meet the high standard needed for a public law challenge.

It rejected all three arguments submitted by Options and upheld the Ombudsman’s decision.

You can read the full decision issued by the court of appeal here.

What This Means for Clients with Similar Cases

This decision means the FOS can now continue its work and issue decisions in respect of clients against Options (Carey’s).

However, it could still take time for complaints to be allocated to an Ombudsman for a decision. This is in part due to the large volume of complaints at the FOS and now the backlog of cases due to Options appeal.

Important Information!

You are not required to use our services to pursue your claim. You can also seek further advice or shop around subject to any time limits within which a claim must be made.

It is possible for you to present the claim for free, either to the firm or person against whom you wish to complain or to the statutory ombudsman (Financial Ombudsman Service or Pension Ombudsman Service) or the Financial Services Compensation Scheme, whichever is applicable to your claim.