...have your cake and eat it or simply have your cake…?
In Templar Estates Ltd -v- National Westminster Bank Plc the Court granted a stay of Court proceedings to allow the Bank customer to pursue a complaint through the Financial Ombudsman Service. Under the rules which govern complaints made to the FOS, a complainant cannot pursue a complaint to the FOS and at the same time pursue a claim through the Court unless the Court proceedings have been stayed on an application to the Court by consent or otherwise.
In the Templar case, Templar was pursuing a financial mis-selling claim against the Bank. Templar issued proceedings to protect its Court claim from being statute-barred; it then sought the Bank’s consent to a stay of those proceedings to allow it to pursue a complaint through the FOS – a much more attractive forum for Templar to seek redress because pursuing its claim through the Court would be long, require it to incur significant legal costs and expose it to the legal costs of the Bank if the claim was ultimately unsuccessful.
The Bank refused to accede to Templar’s request so Templar was forced to apply to the Court for an order for a stay of the proceedings with no guarantee that the Court would grant its application.
The Bank argued that it would be prejudiced by any stay; resolution of the matter could become further delayed if the complaint went through the FOS and at the end of the process Templar decided not to accept the FOS’ decision and then elected to lift the stay and pursue the Court claim – a concern to which the Court was sympathetic.
Templar agreed that it would accept any award made by the FOS thereby securing the stay and the cheapest forum for seeking redress; it also left open the door to pursuing the Court claim against the Bank if Templar did not get any award from the FOS.
Templar is a useful case for claimants in financial mis-selling cases who are forced to issue a claim because of imminent time limits but who want the opportunity first to try and obtain redress by making a complaint to the FOS, which is cheaper than pursuing a claim through the Court. However, claimants need to be aware of the strict time limits which also apply to bringing complaints through the FOS, the financial award limits of the FOS and also the consequences of accepting a FOS award which does not provide for full compensation.
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