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Financial Ombudsman acted irrationally

The High Court has handed down detailed guidance for the first time on the correct approach in law to the Financial Ombudsman’s powers to reopen complaints.

In R (Greg Moniak) v Financial Ombudsman Service [2023] EWHC 333 (Admin), the claimant was the victim of fraud, which resulted in his life savings being emptied from his bank account. The fraudsters were convicted and sentenced at the Old Bailey in 2018.

Moniak, unrepresented, brought a complaint to the Ombudsman against his bank, Barclays, for failing to act on alleged red flags. The Ombudsman rejected this, relying partly on a note provided by Barclays on sentencing remarks made by the judge. Moniak then obtained a transcript of the sentencing and summing up, which contradicted Barclays’ note. The Ombudsman also rejected this as not ‘material new evidence’.

However, Moniak, represented pro bono by James MacDonald KC of One Essex Court, succeeded at judicial review. Deputy High Court Judge Obi held the transcripts were material and the Ombudsman acted irrationally.

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Jonathan Fisher KC highlights that it now accounts for around 40% of criminal offences, with roughly 70% involving technology, and argues that the UK cannot simply prosecute its way out of the problem. Detection, investigation and prosecution all require improvement, while different fraud types demand tailored responses.

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