FOS departs from established law to hold that losses caused by the financial crisis do not break the chain of causation
On 9 February 2012, the Financial Ombudsman Service ("FOS") issued a provisional decision in a financial mis-selling claim, rejecting the argument that losses caused by the financial crisis were not reasonably foreseeable.
In coming to this decision, the principal ombudsman expressly departed from the approach taken by the High Court in the recent mis-selling case of Rubenstein v HSBC Bank Plc [2011], which held that the unprecedented market turbulence caused by the financial crisis broke the chain of causation on grounds of remoteness and forseeability.
This decision clearly demonstrates that, when discharging its duty to decide claims "fairly and reasonably in the circumstances", the FOS will not shy away from coming to conclusions which are diametrically opposed to established case law, often resulting in markedly pro-claimant decisions.
Lawyers Tim Strong, Caroline Scullion
