Financial Ombudsman's statutory powers. Successful High Court challenge by financial adviser firms
| DOI | https://doi.org/10.1108/13581980710835326 |
| Published date | 20 November 2007 |
| Pages | 487-491 |
| Date | 20 November 2007 |
| Author | Joanna Gray |
| Subject Matter | Accounting & finance |
LEGAL COMMENTARY
Financial Ombudsman’s
statutory powers
Successful High Court challenge by
financial adviser firms
Joanna Gray
Newcastle University, Newcastle upon Tyne, UK
Abstract
Purpose – This paper aims to report and comment on a successful High Court challenge by financial
advisory firms via the financial Ombudsman.
Design/methodology/approach – The paper’s approach is to outline the facts and explain the
decision.
Findings – Although the industry will welcome this decision, the FSA and the Ombudsman may not
and the comments made by Mr Justice Lewison recognise what may be an eternal tension between
“regulatory” redress schemes in the financial services industry and the courts and the common law.
Originality/value – The paper provides a useful commentary on a decision that has some
considerable significance to the financial services industry.
Keywords Legal process,Legal disputes, Law courts
Paper type General review
Bunney v. Burns Anderson plc and another; Cahill v. Timothy James & Partners Ltd
(High Court: Chancery Division: Mr Justice Lewison)
Date of judgment: 25 May 2007
Facts
The facts which gave rise to the original referrals by the individual claimants named in
these actions (Mr Bunney and Mr Cahill) to the Ombudsman had been agreed by all the
parties concerned in these actions before the high court. They were set out my
Mr Justice Lewison as follows by way of background to his judgment on those issues
which were in dispute before him:
“Bunney v. Burns Anderson plc
Until 1992, when he was made redundant, Mr Bunney was an employee of TVS. He was also a
member of the TVS Pension Scheme. Following his redundancy he approached a financial
adviser employed by a company with the Burns Anderson Group for advice about a possible
transfer of his deferred benefits under the scheme. He was given advice in the summer
of 1992 which he took. In his decision dated 18 December 2002 Mr Richard Prior, the
Ombudsman, decided that the advice that Mr Bunney received was unsuitable advice.
In consequence he said:
I direct that for the firm, adopting the regulatory guidance (using the non-profit deferred
annuity as representing the benefit of the scheme) carry out a loss assessment, and, if a loss
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1358-1988.htm
Legal
commentary
487
Journal of Financial Regulation and
Compliance
Vol. 15 No. 4, 2007
pp. 487-491
qEmerald Group Publishing Limited
1358-1988
DOI 10.1108/13581980710835326
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