Case Digest
Summary
The financial Ombudsman’s refusal to reconsider a complaint dismissal, given that the complainant held court transcripts that contradicted the central evidence on which the dismissal was based, was irrational. Given the ambiguity regarding a request for the transcripts, it was also irrationally inflexible to find they could not have been obtained sooner.
The claimant had applied for judicial review of the ombudsman’s refusal to reconsider a complaint against the bank with whom he had two accounts into which he had deposited proceeds of around £50,000 from the sale of an inherited property. Subsequently he moved abroad travelling with two people. On his return he discovered both accounts had been emptied and he notified the police and complained to the bank. During proceedings leading to one of his fellow traveller’s conviction for theft, a bank representative noted the judge’s purported comments that the claimant was a drug user with a chaotic lifestyle who had turned to one of the fraudsters who took over the accounts. Thereafter, the bank disputed the claimant had complied with the Payment Services Regulations 2009 reg.57 requiring him to keep his accounts safe while the claimant complained to the ombudsman that the bank had not protected him from fraud.
In reliance on the note, the ombudsman opined the claimant had given over control of his accounts. Correspondence between the ombudsman and the claimant regarding the availability of the court transcripts which referred to “court documents” or “court judgments” existed and had been by the claimant. These revealed the judge had referred to a chaotic lifestyle, but not to handing over accounts, in light of which the claimant asked for a reconsideration of the ombudsman’s decision which was refused on the grounds the transcripts were not material new evidence. The claimant applied for judicial review, the ombudsman offered to reconsider its decision and submitted that the proceedings were academic.
The application was granted. The ombudsman’s discretion included a wide latitude regarding the use and disclosure of evidence entitling the dismissal of a complaint, without consideration of its merits, if doing so would significantly affect the operation of the service. This included under r.3.3.4B of its guidance, which included circumstances where subject matter had been previously considered, unless material new evidence relating to it which was likely to affect the outcome, had subsequently become available.
There remained live issues relating to the status of the transcripts; also to the scope and nature of the guidance affecting the ombudsman’s obligations. It was not right to suggest that the claim was academic (paras 55-56).
The r.3.3.4B test defines that materiality was only one factor and the extent to which materiality had been properly considered was unclear. The bank’s note was materially inaccurate and the transcript did not support a conclusion that the claimant had given over control of his accounts. The fellow traveller had been sentenced on the basis that he had hidden his actions from the claimant. This may have enabled the inference, related to the claimant’s lifestyle, that he had not sufficiently protected his accounts, whereas the ombudsman had given significant weight to the note, which the bank concluded indicated the claimant had given his fellow travellers authority over his accounts. The ombudsman’s position that the transcripts were not material new evidence was implausible and irrational given its reliance on the note (paras 62-64, 67).Applying the Senior Courts Act 1981 Pt II s.31(2A), it was not “highly likely” that the ombudsman would have reached the same decision, without the aforementioned irrationalities. And it was not possible to separate out the unlawful aspects of the decision from other components. The decision was quashed and referred back to the ombudsman for reconsideration.
Comment: this judicial review of another ombudsman (not the LGSCO) shows that its quasi-judicial role is also subject to public law. Judicial review DOES run against the ombudsman’s approach, and when people have received a draft report or even a final one, they need – if dissatisfied – to focus on the grounds for public law challenges when considering the strength of their chances of getting a report’s conclusions overturned. When CASCAIDr sees reports very close to their finalisation, we think it is crucially important for complainants to ask themselves whether they can PROVE the thing that they’d like to be reconsidered, with evidence which they could already have provided, if only they’d been asked about it. If one doesn’t mention that sort of a stance at that stage, one may be more easily refused a formal review, and one needs to ask for that stage, against any ombudsman, before permission will be granted for judicial review of the ombudsman.