The Finance Conduct Authority (FCA) has confirmed the annual increase to the Financial Ombudsman Service (FOS) award limits.
The award limit is the maximum amount the FOS can require a financial service firm to pay when it upholds complaints.
It is adjusted each year in line with inflation, as measured by the Consumer Prices Index (CPI).
Changes
From 1 April 2023, FOS award limits will go up to:
- £415,000 ($508,000, €470,000) for complaints referred to the FOS on or after 1 April 2023 about acts or omissions by firms on or after 1 April 2019
- £190,000 for complaints referred to the FOS on or after 1 April 2023 about acts or omissions by firms before 1 April 2019
The FOS said it will be updating the guidance on its website to reflect the changes from the 1 April.
‘Significant ramifications’
Lucy Tolond, partner of professional indemnity at legal services business DWF, said on Linkedin: “Whilst the award limit increases annually, the impact of inflation is such that this year’s increase is extremely high. Coupled with the FCA’s ongoing consultation on the complaint ‘gateway’ thresholds for SMEs, this could have significant ramifications for financial advisers and their insurers.
“Where claims for professional negligence exceed £100,000, they should generally be issued in the High Court rather than the County Court – the FOS will now have the power to award four times that amount, without hearing witness or expert evidence, and with the only route of appeal being a judicial review.”
