Barclays Bank Uk Plc Ors V Financial Ombudsman Service: Why the High Court Quashed Four FOS Jurisdiction Decisions

Key Takeaways

1. In R (Barclays & Ors.) v FOS, the High Court quashed four Financial Ombudsman Service (FOS) jurisdiction decisions. The complaints alleged that overdraft and credit-card lending had created unfair credit relationships.
2. The court held that the FOS’s interpretation of its own jurisdiction was a fundamental error of law.
3. Only a lender’s prior acts or omissions within six years of the complaint can be complained about. Older account history can still be considered as context.
4. An open overdraft or credit card does not, by itself, turn an old lending decision into a current complaint.
5. The FOS was ordered to pay 92 per cent of Barclays’ costs and 100 per cent of the costs of Santander, NatWest and Vanquis, with payments on account within 14 days.
6. A court claim under section 140A of the Consumer Credit Act 1974 is a separate route from an FOS complaint and has its own rules.
7. Go Legal is rated Excellent with over 300 five-star reviews and 5/5 on Trustpilot and Google, placing our solicitors among the best-reviewed litigation lawyers in England and Wales.

What Did Barclays v Financial Ombudsman Service Decide About FOS Jurisdiction?

An allegation that lending was unfair does not automatically give the Financial Ombudsman Service jurisdiction over the whole history of a credit relationship. In R (Barclays & Ors.) v FOS [2026] EWHC 1555 (Admin), the High Court quashed four FOS jurisdiction decisions about allegedly unaffordable overdraft and credit-card facilities.

The case was about the ombudsman’s power to investigate, not about whether the lending was affordable. The court held that the FOS can only examine complaints about specific acts or omissions by the lender, and only those within six years of the complaint. A later costs judgment then ordered the FOS to pay most of the banks’ legal costs.

For consumers, the ruling changes how a complaint about long-running credit should be framed. For lenders, it provides a clear basis for resisting attempts to reopen old lending decisions. If you need advice on either side of an FOS jurisdiction dispute, our solicitors can help.

Background: What Were the Unaffordable Overdraft and Credit-Card Complaints About?

Four banks challenged ombudsman decisions that would have let the FOS investigate, and award redress across, the entire life of long-running credit accounts.

The claimant banks were Barclays Bank UK plc, National Westminster Bank plc, Vanquis Bank Limited and Santander UK plc. Each had provided an overdraft or credit-card facility to a customer. Four customers complained that their credit relationship with their bank “was and remained unfair”, largely because the banks had extended unaffordable credit. The parties agreed that section 140A of the Consumer Credit Act 1974 supplied the test of unfairness.

In July 2024, ombudsmen decided the four complaints using what the banks said was a new interpretation of the FOS’s jurisdiction. That wider view came from the FOS’s reading of two Supreme Court decisions: Smith v Royal Bank of Scotland plc [2023] UKSC 34 and Plevin v Paragon Personal Finance Limited [2014] UKSC 61.

The stakes went well beyond four customers. The court said its decision “had the capacity to affect thousands of consumer complaints”. The Financial Conduct Authority (FCA) intervened in the proceedings. It was the first time the FCA had intervened to oppose the legal stance taken by the FOS.

The banks brought judicial review claims because a jurisdiction decision is not a technicality. It determines:

1. How far back the investigation reaches.
2. How much historic evidence the lender must produce.
3. The size of any potential redress.
4. The cost of handling the complaint, multiplied across every similar complaint.

The Issues: What Questions Did the Court Have to Decide?

The central question was whether the FOS had wrongly interpreted and applied the time limit in DISP 2.8.2R(2) when it concluded that it had jurisdiction over the entirety of each complaint.

Does an unfair credit relationship allegation give the FOS jurisdiction over the whole relationship?

The ombudsmen treated each complaint as opening up the full history of the account. The banks argued that the FOS must first identify which matters fall within its time limit, and only then consider fairness. The court treated this as a “hard-edged” question of law. The FOS either had jurisdiction or it did not, and it had to get the answer right.

Does an ongoing overdraft or credit card make a historic complaint current?

The FOS’s approach meant that a continuing account could keep old lending decisions within reach. Santander disputed what the costs judgment calls “corrective responsibility”. It also disputed the proposition that a single in-time event opened jurisdiction over the whole credit relationship. The court later described Santander’s position on these points as correct.

Can the credit relationship itself be an “event”?

The ombudsmen’s decisions had treated the credit relationship as an “event” for the purposes of the complaint rules, and the banks challenged that construction. At trial, however, the FOS chose not to rely on it and reserved its position. The court did not need to rule on it. Anyone who says the court decided that a relationship can never be an “event” is overstating the ruling.

How does an FOS complaint differ from a court claim under section 140A?

These are separate routes with separate gateways. Under section 140A, a court may make an order under section 140B if it decides that the relationship arising from a credit agreement is unfair to the debtor because of:

• Any term of the agreement or of a related agreement.
• The way the creditor has exercised or enforced its rights.
• Anything done or not done by or on behalf of the creditor, before or after the agreement was made.

The court must consider all matters it thinks relevant, including matters relating to both creditor and debtor. Once the debtor or a surety alleges unfairness, the creditor must prove that the relationship is not unfair. The FOS, by contrast, must satisfy its own jurisdiction rules, including the DISP 2.8.2R(2) time limit, before it forms any view on fairness.

The Decision: What Did the High Court Hold?

The court ruled for the banks, held that the FOS’s interpretation of its jurisdiction was a fundamental error of law, and quashed the four ombudsman decisions. The banks won the binary jurisdictional question outright and obtained the relief they sought.

Only the lender’s in-time acts or omissions can be complained about

The court held that the allegedly unfair relationship “must arise from prior acts or omissions of the creditor”. It said “it is these alone that can be complained about”, “and then only if they occurred within six years of the complaint.”

A continuing balance is a state of affairs. It is not a fresh act by the lender. In practice, the FOS must now work through three questions:

1. What did the lender do, or fail to do?
2. When did it happen?
3. Did it happen within six years of the complaint?

Older lending history can still be context

Historic lending does not disappear from the picture. The costs judgment records that background may be considered when assessing statutory fairness, provided the complaint was referred within the required time limit, which the court described as “usually six years”. The difference is between using history to explain why recent conduct was unfair, and seeking redress for the older decisions themselves.

This cuts both ways. Consumers can still tell the full story of the account. Lenders can resist attempts to reopen lending decisions outside the time limit.

Why the FOS’s wider approach failed

The FOS’s case weakened as the litigation progressed. It placed late emphasis on an alternative argument, described as “Route 2”, which required an additional part-heard hearing. The court found that argument misconceived. It said:

“I am persuaded that in its skeleton argument for the part-heard hearing, the defendant sought to resile from its earlier-stated position. This caused much unnecessary forensic heat and disputation.”

The FOS also relied on a statutory defence under section 31(2A) of the Senior Courts Act 1981 that it had not pleaded. The court allowed the argument because no party would be prejudiced, but the defence failed. Barclays’ separate ground under Article 1 Protocol 1 of the European Convention on Human Rights added nothing to the jurisdiction analysis and was dismissed.

The costs decision

In R (Barclays Bank UK PLC and others) v Financial Ombudsman Service Limited [2026] EWHC 2298 (Admin), the court decided who should pay for the litigation. Under CPR Part 44.2, costs normally follow the event, subject to the court’s discretion. The FOS accepted the banks had won but argued that Barclays should recover only 60 per cent of its costs and the other banks 50 per cent.

The court largely rejected those arguments:

1. Barclays lost only its Article 1 Protocol 1 ground, which took up 2.13 per cent of the first hearing. Applying R (M) v London Borough of Croydon [2012] EWCA Civ 595, [2012] 1 WLR 2607, the court reduced Barclays’ costs by 8 per cent, leaving it 92 per cent after detailed assessment.
2. Santander, NatWest and Vanquis each recovered 100 per cent of their costs on the standard basis, subject to detailed assessment.

The FOS argued that adverse costs would have a “chilling effect” on it as a public body, relying on Competition and Markets Authority v Flynn Pharma Ltd [2022] UKSC 14, [2022] 1 WLR 2972. The court rejected this, stating that “a chilling effect cannot be assumed, but must be assessed as being sufficiently plausible.” The FOS is not a statutory regulator, the case turned on a hard-edged legal question, and the FOS filed no evidence about any effect on its work or income. The court said: “It is incumbent on a public body such as the defendant to correctly interpret the law.”

Under CPR 44.2(8), a successful party is presumed to receive a reasonable payment on account unless there is good reason otherwise. Applying Excalibur Ventures LLC v Texas Keystone Inc [2015] EWHC 566 (Comm), the court ordered the FOS to pay within 14 days:

• 50 per cent of the 92 per cent recoverable by Barclays.
• 50 per cent of each other bank’s claimed costs.

The banks had asked for 60 per cent. The FOS had proposed 40 per cent within 21 days.

What Should You Do Now?

Every party to an unfair credit dispute should now start from a dated chronology of the lender’s specific acts and omissions, and keep jurisdiction separate from merits.

Consumers with unfair lending complaints

The account being open is no longer the point. What matters is what the lender did and when.

1. Identify each lending decision, limit increase, fee, interest charge or enforcement step you object to.
2. Date each one using statements, letters and credit records.
3. Count back six years from the date of your complaint. Acts inside that window can found the complaint. Anything earlier is context only.
4. Explain how each in-time act or omission contributed to the unfairness.
5. Take advice promptly if the FOS raises a time-limit objection or declines jurisdiction.
6. Consider separately whether a court claim under section 140A is appropriate.

Delay has a real cost. Each month that passes before a complaint is made can push more of the lender’s conduct outside the six-year window.

Lenders responding to complaints

The ruling gives lenders a principled basis to confine complaints to in-time conduct.

1. List every act or omission the consumer alleges and date it.
2. Set out jurisdiction objections in a distinct section of the response.
3. Distinguish contextual history from the conduct said to found the complaint.
4. Keep affordability, account-management and complaint-handling records intact.
5. Take advice before challenging an ombudsman’s decision by judicial review, and keep the grounds focused.

Co-claimants in joint challenges

Separate claimants can recover their costs if they add something distinct rather than repeating the lead case. Santander complied with the court’s non-duplication order, filed a much shorter skeleton argument adopting Barclays’ submissions, and addressed only the facts of its own decision. The court rejected the argument that its contribution made no material difference: “It was the opposite.” NatWest and Vanquis took the same approach and recovered in full.

Reasonable attempts to settle also helped. Santander wrote inviting the FOS to reconsider after the FCA was given permission to intervene. The court treated this as reasonable correspondence, consistent with the duty to seek dispute resolution. NatWest’s and Vanquis’s attempts to compromise were treated the same way.

The FOS and other public bodies

Public bodies cannot assume protection from adverse costs. A chilling-effect argument needs evidence and is weak where the dispute turns on a pure question of law. The court also noted that the FOS never applied to stay the later claims or limit their costs, and had agreed to consolidation. A defendant that thinks co-claimants are duplicating work should raise the point early, not after trial.

Frequently Asked Questions

Get Advice on FOS Jurisdiction and Unfair Credit Relationships

Go Legal is a London-based commercial litigation law firm acting for individuals, directors, professionals and businesses across England & Wales. Our solicitors help clients identify whether a dispute turns on FOS jurisdiction, the merits of an unfair credit allegation, or both.

We can assist with:

• Building a dated chronology of lending decisions, account management and complaint correspondence.
• Advising consumers on the right route and the evidence needed.
• Advising lenders on proportionate jurisdiction objections and complaint responses.
• Assessing whether an ombudsman’s decision involves an error of law that could support judicial review.
• Managing settlement correspondence and costs strategy in contested proceedings.

Acting early protects evidence, keeps more conduct within the six-year window and avoids wasted costs on the wrong route.