Permission to apply for judicial review of 16 FOS decisions refused

In the case of Portal Financial Services LLP v Financial Ombudsman Service Limited [2022] EWHC 710 (Admin)  the court has, on appeal, refused Portal permission to apply for Judicial Review of 16 decisions of FOS.

The test to decide whether to grant permission to apply for Judicial Review is to determine if there is an arguable ground that has a realistic prospect of success. The question for the court to determine on appeal was whether the challenge could be properly mounted, and not whether it would in fact succeed.

Portal is regulated by the FCA, with permission to advise on pension transfers and opt-outs. The interested parties in the series of transactions were introduced to Portal by a third-party advisory firm, Cherish Wealth Management Ltd, who were the appointed representative of Shah Wealth Management Ltd pursuant to s.39 of FISMA. Shah was a financial advisory firm authorised by the FCA, but not for pension transfers. Portal was assured by Cherish that it did not recommend or promote Unregulated Collective Investment Schemes (UCIS). Without Portal’s knowledge all but one of the interested parties were advised to invest part of their pension pot in a UCIS, and suffered loss as a result. Both Shah and Cherish were wound up, leaving the interested parties to complain to FOS about the advice from Portal. FOS found against Portal.

Three of the four original grounds for Judicial Review were put before the High Court at appeal: (Ground 2) FOS acted irrationally in concluding that industry ‘alerts’ circulated by the FCA represented ‘good industry practice’; (Ground 3) FOS failed to take into account ‘reasonable assumptions’ that Portal was entitled to make under COBS 19.1.2R; and (Ground 4) FOS should not have held Portal 100% liable.

The Court analysed the basis of the FOS decisions and held they were lawful, within their powers and not open to arguable challenge by way of Judicial Review.

Scott Nodder