Claimant permitted to apply for judicial review of FOS ‘fairness’ decision

The High Court have granted a Claimant permission to make an application for judicial review in respect of a decision of the Financial Ombudsman Service (FOS) against the Claimant in respect of the provision of credit by the Claimant to two individuals for the sale to them of a Timeshare and Membership of a “fractional point owners’ club (FPOC)” for an apartment in Malaga.

The Claimant raised four grounds for judicial review:

  1. the FOS erred in finding that under the Timeshare Regulations 2010, or alternatively the RDO Code, the seller of an asset backed Fractional Timeshare Contract is required to provide the buyer with a current and future valuation of the property rights acquired under the contract;
  2. the FOS erred in law in taking the borrower’s alleged breaches of the Timeshare Regulations into account when considering the fairness of the credit relationship with the claimant under section 140A of the Consumer Credit Act 1974 (CCA);
  3. the FOS’ findings in relation to allegedly unfair terms in the timeshare contract were based on a number of material errors in his construction of relevant contractual provisions; and
  4. the FOS failed properly to consider how the allegedly unfair terms had been operated in practice when assessing the fairness of the credit relationship for the purposes of section 140A CCA or for the purposes of determining appropriate relief under section 140B CCA.

The Claimant’s case had been selected by the FOS to be a lead case from hundreds of complaints it had received in relation to fractional timeshare products. In reaching the decision to grant permission, the court noted the similarities between the Claimant’s case and the other lead case in this area, R(Shawbrook Bank) v Financial Ombudsman Service Limited CO/506/2022 and the need to clarify the issues raised in 3 and 4 above on the terms of the contract and the appropriate remedy as they would have relevance to a number of the other outstanding complaints of a similar nature.

Duncan Scott