In a significant judgment recently handed down by the Administrative Court, the Court has concluded that the FOS acted irrationally in refusing to consider new evidence put before it by a litigant in person.
The litigant had suffered a catastrophic fraud between 2011-2014. This resulted in his life savings being emptied out of his bank account by the fraudsters. The fraudsters were later convicted and sentenced at the Old Bailey in 2018.
The litigant later brought a complaint to the FOS against his bank, Barclays. He alleged that Barclays had failed to act on alleged red flags demonstrating fraudulent activity on his account, and therefore failed to prevent the fraud.
The FOS rejected his complaint. It relied, in part, on a note provided to it by Barclays of certain sentencing remarks allegedly made by the Judge in the criminal trial.
After the complaint was finally rejected, the litigant obtained transcripts of the Judge’s sentencing and summing up remarks. These showed Barclays’ note to be materially inaccurate and, as the Judge found, to have “misrepresented” the basis on which the fraudsters had been sentenced.
However, when the litigant provided these transcripts to the FOS, it refused to reconsider its findings. It said that the transcripts were not “material new evidence” within the meaning of paragraphs 3.3.4A-B of the Dispute Resolution: Complaints provisions of the FSA Handbook (DISP).
The litigant brought a judicial review of the FOS’s decision. Following a one-day hearing, the Judge handed down judgment holding that the FOS had acted irrationally in refusing to reconsider the complaint in light of the transcripts. The transcripts were material, as they revealed the note to be inaccurate. Moreover, the FOS had never asked the litigant in terms to provide copies of the transcripts prior to making its decision, despite asking him to provide other materials.
In light of her findings, the Judge made an order quashing the FOS’s decision. She awarded the litigant substantial costs. She also ordered the FOS to make a payment of £9,000 to the Access to Justice Foundation under s. 194(3) Legal Services Act 2007.
The Judgment can be found here. It is the first judgment to provide detailed guidance on the correct approach in law to the FOS’s powers to reopen complaints under DISP 3.3.4A-B (see in particular paras. [62]-[66], [68]). It is therefore important for other complainants to the FOS who identify new evidence they wish to rely on after the FOS’s decision.
James MacDonald KC acted pro bono for the successful litigant under the auspices of Advocate.