FT Adviser broke the story of Giles Chapman and his wife, who have applied to reopen an appeal decision, in their claim against the Financial Services Ombudsman’s treatment of their complaint against Santander.
Following this, legal and financial experts called in the pages of FT Adviser for a sea-change in the way Fos operates.
FT Adviser has now received a letter from Chapman himself, who although has no legal training, writes:
“You have eloquently covered aspects of our case, but a brief summary for your readers, may assist.
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The FCA did important work on and defined mortgage prisoners in Nov 2021 and we complained to Santander within three years of becoming aware that we had cause for complaint. Santander declined the complaint and in its final response letter, Santander used Option 1 from Disp 1 Annex 3R. It only stated: “You have the right to refer your complaint to the Financial Ombudsman Service, free of charge, but you must do so within six months of the date of this letter.”
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We did this, and Fos started to look at our complaint, but Santander then objected to Fos considering the complaint, referencing the six year or three-year time bar rule. Fos chose to accept Santander’s objection, saying “consent” to consider the complaint outside of the time bar had not been given, so it did not have jurisdiction.
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We argued that using Option 1 in its FRL meant that Santander had consented to Fos considering our complaint, in that the bank “indicated” consent by only referencing the six months limit. Santander could have used Option 2 as this would have preserved its historic time bar rights.
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Readers may have mixed views but the big reveal is: in our complaint to Santander we had said “Another lender did not time-bar our complaint and chose to investigate. I trust you will follow the same logic on this complaint.” A subject access request revealed Santander had carried out internal discussions. We quote: “Discussed time barr [sic] with a manager due to the issue being in 2009 however we feel that as the mortgage was redeemed within the six years, a decline is more suitable.”
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Therefore, Santander deliberately chose Option 1 as a simple decline and intended not to time bar our complaint in its FRL. We say Santander gave consent: whether actual, implied or notional or at least waived the right to assert time bar. Therefore, Fos had jurisdiction. Failure to comply with the FCA’s dispute resolution (Disp) should count against Santander, and Disp does not allow Santander to withdraw consent once given or even assert the time bar after issuing their FRL. Fos should not have accepted Santander’s withdrawal of consent by way of their later objection.
Judicial review
The above is why we pursued a Judicial Review of Fos’s decision that it did not have jurisdiction to consider our complaint. We established we were arguing a “point of law”- but our judgment said, among other things:
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Consent had to be express consent as consent had an ordinary meaning.
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After receipt of the FRL, “self-help” was required of us to check with the bank if they really were waiving the historical time bar.
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Fos retains ultimate discretion on jurisdiction — even if a firm consented to waive time bars.
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Option 1 from Disp 1 Annex 3R is non-compliant with Disp and so the six-month referral limitation to FOS does not start to run because the FRL is not valid.
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There was the possibility that we should pursue Santander under FSMA for breach of statutory duty over their FRL.
We believe our case, and the public interest, demands reconsideration and this is why we sought permission to appeal from the High Court and the Court of Appeal and are now seeking justice via a CPR 52.30 application.
Special mentions
There are some points I’d like to make to readers. The first relates to ‘self-help’.
You have covered this in your articles well and exposed it to scrutiny. One interesting part of the HC judgment (para 80 to 81), is that ordinary retail customers are expected to clarify with the firm they have complained to, whether the firm intended to consent to waive the historic time bars.
Some have commented this is absurd, as it cuts through the intention of Disp to be simple, as established in Shop Direct v Official Receiver and if the firm says “You have our final response”, how many times are complainants meant to challenge?
Option 1 has become a legal black hole as it is deemed to be ‘non-compliant’, so there is no referral time limit to Fos.
Imagine if everyone took advantage of this — and I estimate there may be up to 1mn FRLs issued that have used / are using still, this “default” option.
Fos would surely not be happy. As a side note, search on the internet for “Jurisdiction Fos RPC” for “Fos’ jurisdiction: a judicial review with wider consequences.”.
Indicates
The judge did not consider or evaluate the significance of “indicates” in 1.6.2R (1) (f).
This is a significant oversight as it gives context to Option 1. Instead the judge, concluded that “consent” had to mean “express consent”.
However, whoever drafted Disp had the concept of “express consent” firmly in mind, as that term is used in Disp (but only once) in App 1.3.9G.
Here, the express consent of the endowment complainant is to be obtained.
In our view, Option 1 was intended for complaints that are not time barred, for example because the event had just occurred or because the firm agreed to consent or had waived.
This was considered a ‘decline’ by Santander.
It does not matter which, as both are waivers (or consent — whether actual, notional or implied) — the historic time bar not being at play and the firm had to get it right and Disp prevents a firm from changing its mind.
Should a judge recuse themselves – and when?
We understand and respect that the HC allocation of judges is random.
However, this can result in judges hearing highly technically matters involving complex law where they had no previous experience.
In this case, recusal in favour of a judge that had experience of the FCA Handbook/Disp/Fos, may have been appropriate, especially given the high profile/public interest nature of this matter.
Court appeal refusal
The brevity and limited analysis of the PTA refusal by LJ Phillips indicates that he may have noticeably leaned into or been led by the Respondent’s objections.
We have a number of disagreements over what the lower court said (or how that judgment should be interpreted).
However, in our opinion, it is judicially erroneous to not consider each of our Grounds as separate points.
Further, the judge did not consider the public interest, which was the principal reason why Shop Direct was referred to the CoA.
Option 1 has become a legal black hole
Significantly, only one ground has to succeed for permission to be granted.
We have many more points that need to be reconsidered at a hearing in the CoA with judges experienced in the FCA Handbook/Disp/Fos.
Given the overwhelming importance of our case – which we brought in no small part due to public interest, such a hearing is the only correct resolution.
Court of Appeal v Court of Appeal tension?
We now have the unusual situation where in effect, the CoA has ruled against itself: The CoA in Shop Direct established a purposive interpretation of DISP but now the CoA – through appeal refusal — has endorsed the HC “ordinary” interpretation.
The HC interpretation cuts across the guiding principle of GEN 2 (on how the entire FCA Handbook must be interpreted) where GEN 2.2.1 R states with crystal clear clarity “Every provision in the Handbook must be interpreted in the light of its purpose.”
The purpose of a FRL with regard to historic time-bars is clear: the respondent must “indicate” waiver/consent (whether actual, notional or implied) or not and it is not permissible for the Fos or the court to ignore this rule — and it has.
Confessions of a Fos chairperson
On February 11 2025, before the Treasury Committee, the former chairperson of Fos said “Disp has have not been reviewed for a very long time and can be open to interpretation.”
Our thoughts:
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Did Baroness Manzoor have our case in mind when making this comment, as our hearing was on 25th March 2025?
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Fos should have sought clarity from the FCA rather than outsourcing this to vigilant members of the public as to “what those rules say and how we interpret them.”
Fos has had more than 10 years to do this since the rules changed.
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Given the astounding confession of Baroness Manzoor, it seems a miscarriage of justice has occurred, as Fos knew of significant issues on interpretation.
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A public body led us into litigation knowing full well of the deficiency and it seems probable that Fos’s actions in its own right, constituted unreasonableness and/or procedural impropriety — so further grounds for the Judicial Review — and the question could be asked: did Fos breach the duty of fairness and procedural integrity in the Judicial Review? We are considering writing to the court on these points.
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We believe Fos should and must, reverse the costs award and make whole ourselves and our excellent previous legal teams.
Also in this hearing, Fos said: “There must be much greater clarity in the way that we are left to interpret the rules that are in place.”
Regarding influx of cases, Fos said: “Our uphold rates generally have not moved much despite the influx of cases. That is not necessarily saying that businesses’ behaviour or their service has disintegrated. It seems to have remained steady. One in three is still not a great track record.”
Another great quote from this hearing came when Fos said: “There are others [areas of Disp] where we can move very quickly to modify and change those Disp rules in the way that we are operated, or indeed how we interpret, so there is clarity about what those rules say and how we interpret them.”
Well, Fos appears not to have done that after our case.
Breaching the spirit?
From the FCA’s Handbook in relation to “Principles”, is Fos breaching the spirit of 1-3, 6-7, 11 and 12? In my view, yes.
This is pretty serious as we expect the adjudicator to abide by the rules set by the FCA.
A read of “The Responsibilities of Providers and Distributors for the Fair Treatment of Customers” is also revealing.
Public interest
As I hope readers will appreciate, right from the outset, we realised how important our case was and even though we are where we are, we are glad we made the decision to pursue our Judicial Review.
I could not have lived the rest of my life thinking “what if” and about the huge numbers of people who were (and still are), being denied justice, even though we are currently in a situation where Disp itself, has in effect been declared non-compliant and, perhaps, unusable.
Yours sincerely, Giles Chapman
Editor’s note: We have invited Fos to write a response to this letter in FT Adviser.
