R Jim Paul and Associates v Financial Ombudsman Service and Another
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE GOLDRING |
| Judgment Date | 27 January 2006 |
| Neutral Citation | [2006] EWHC 655 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | CO/4575/2005 |
| Date | 27 January 2006 |
[2006] EWHC 655 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
Royal Courts of Justice
Strand
London WC2
Mr Justice Goldring
CO/4575/2005
THE CLAIMANT APPEARED IN PERSON
MISS SJ DAVIS (instructed by FINANCIAL OMBUDSMAN SERVICE) appeared on behalf of the DEFENDANT
THE INTERESTED PARTY DID NOT ATTEND AND WAS NOT REPRESENTED
Friday, 27th January 2006
Mr Paul renews his application for permission to apply for judicial review. Rafferty J refused the application on paper.
Mr Paul is an independent financial adviser. He is regulated by the Financial Services Authority. He had two clients, Mr and Mrs Phillips. They complained to the defendant about investments and pension plans upon which they were advised. Their complaint was upheld. I have read both the provisional and the final decision letters. It is only necessary to refer to the final decision letter. The finding of the ombudsman was that unsuitable recommendations were made by the adviser, not Mr Paul himself, although he is left in the unhappy position of having to compensate on the basis of what was done by somebody else. Not surprisingly he feels rather strongly about that.
The ombudsman found that unsuitable recommendations were made with regard to Skandia and various investments, PEP plans, income drawdown and pensions, which are set out in some detail in the decision letter. As a result an order for redress was made. It is the order for redress that Mr Paul seeks to quash. He submits that the order, in effect, was irrational in the circumstances of the case. The order for redress is put in these terms:
"With regard to the investment bond I am satisfied that Mr and Mrs Phillips would still have used the money in a way designed to produce a return. I consider it fair to assume that, with reasonable advice, they would now have the capital intact plus a reasonable rate of return.
As there is no compelling evidence as to how the money would otherwise have been invested, I consider that Mr and Mrs Phillips should receive an additional sum for loss of investment opportunity calculated on the basis of a return at 1% more than Bank of England repo rate… from time to time compounded yearly. That rate of return would have been by capital growth, rather than income."
As to that a calculation was set out which I need not go into.
As to redress on pension, this was said:
"Moving on now to the pension, in my opinion the drawdown contracts from Mr and Mrs Phillips were unsuitable, for the reasons stated above. I am satisfied that Mr and Mrs Phillips would have safeguarded their income and would have purchased annuities if suitably advised. The following redress is appropriate."
It is said that annuities should be established and that the firm should compensate Mr and Mrs Phillips for past financial losses. In sub-paragraph 3 there is set out further detail of the calculation. Interest payable is set at 8 per cent per year simple.
As I understand Mr Paul's submissions, they are these. Although he does not accept the finding on the merits he is prepared to abide by it. He submits that there has been a failure to order redress within the terms of the procedure that the ombudsman should adopt. He refers me to the Ombudsman News of November 2003 in which it is stated:
"Where we have established that a firm is liable to pay redress, our overriding objective continues to be to try —as far as possible —to put the consumer back in the position they would have been in, had it not been for the firm's actions. We aim, too, to ensure we use a consistent process across the full range of the complaints we deal with where redress is payable."
Mr Paul's complaint is, in essence, this. He submits that Mr and Mrs Phillips have been, as a result of the ombudsman's ruling,...
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