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UK: Complainants to the FOS cannot subsequently sue in court for compensation over and above the FOS award
In this case, Mr and Mrs Clark had taken a complaint to the FOS in relation to negligent financial advice resulting in a loss of over £300,000 to them. The FOS awarded the maximum amount it could award under its regulations. This did not cover the full amount of the Clarks' loss and so the FOS recommended payment by the respondent of the full amount and the Clarks accepted the award subject to their right that they could claim more in court. They issued proceedings to recover the additional amount.
The Court of Appeal held that the doctrine of res judicata applies where the FOS determines a complaint, the substance and facts of which then form the cause of action in subsequent proceedings. A complainant cannot then seek to recover additional sums by bringing a subsequent action in the courts.
The restatement of this concept by the Court of Appeal will be welcomed by insurers whose clients face claims under the jurisdiction of the FOS.
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