Before 1 April 2019, the Financial Ombudsman Service (‘FOS’) could only consider complaints from micro-enterprises with a turnover or annual balance sheet that did not exceed two million euros and fewer than 10 employees. From this week the FOS can now deal with complaints from small businesses that have an annual turnover of less than £6.5 million and either a balance sheet total of less than £5 million or fewer than 50 employees. Whilst this is a welcome extension of the FOS, for many companies it doesn’t go far enough.
Currently some of the UK’s biggest banks are working on a voluntary, industry funded ombudsman scheme for companies not covered by the FOS extension. It has been reported that the steering group setting up the scheme is considering the scope of redress and the scheme may ultimately be given the remit to consider claims and complaints dating back almost two decades. This would potentially allow redress to be sought in respect of claims that would otherwise be statute barred by the Limitation Act.
With pressure from the parliamentary group the new scheme may also enable companies who have been through a previous scheme of redress to have their complaint reconsidered. This appears to be an acceptance that business owners have often been left unsatisfied with the outcome of existing mechanisms of redress.
After a succession of banking scandals involving the mishandling of small and medium sized companies by high street banks the extension of the FOS and the implementation of an industry funded ombudsman will be welcomed.
The Dispute Management team at Lupton Fawcett will be keeping a close eye on developments in the next few months. If you are a business owner or SME who needs advice on making a claim against a bank or financial institution get in touch with Kirsty Coggin or Simon Lockley in the Dispute Management team in Sheffield.
Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.