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Court refuses to interfere with FOS’s decision-making on PPI complaint

  • United Kingdom
  • Financial services disputes and investigations
  • Litigation and dispute management



The High Court has recently handed down its judgment in R (Critchley) v Financial Ombudsman Service and two others [2019] EWHC 3036 (Admin).  The applicant, Mrs Critchley sought to challenge FOS’s rejection of her PPI complaint on the basis that it was contrary to the presumption found in DISP Appendix 3 (“Disp App 3”) [1].  The court ruled in favour of FOS, and found that it had not erred in its interpretation or application of DISP App 3, nor had it failed to take an individualised approach in making its decision.  The case is an example of the court being unwilling to interfere with FOS’s decision making unless the decision is perverse or irrational.  Whilst the FCA’s deadline for complaints about PPI has passed, PPI complaints are still being worked through and this decision supports the view that it is appropriate for financial firms and FOS to reject complaints on the basis of causation, even if there had been substantial flaws in the selling of the PPI.


In 2002 [2], Mrs Critchley successfully applied for a credit card in branch with Halifax (“Halifax”) (which subsequently merged with Bank of Scotland plc).  At the same time, Mrs Critchley agreed to purchase a PPI policy (the “PPI Policy”) to protect her credit card repayments.  In 2006, she cancelled both the credit card and the PPI Policy.

In 2017, Mrs Critchley complained to Halifax and then to FOS, that the PPI Policy had been mis-sold to her on the basis that she would not have purchased it had she known the limitations of the cover and the true cost (poor value) of it.  We Fight Any Claim (“WFAC”) acted on her behalf.  FOS[3] found that whilst Halifax did not act fairly and reasonably in its dealings with Mrs Critchley, even if things had happened as they should, Mrs Critchley would have still taken out the PPI Policy.  Therefore, FOS did not uphold the complaint.

Claim for judicial review

Mrs Critchley sought judicial review of FOS’s decision, arguing that:

  1. FOS misinterpreted DISP App 3 or failed to apply it correctly;
  2. FOS applied a policy or set of counter-presumptions and therefore failed to decide the complaint on an individual basis;
  3. FOS’s decision that the PPI Policy was suitable for her was flawed as it failed to consider the restrictions of the cover, the high cost of the PPI Policy and its alleged poor value, and it took into account her eligibility which was irrelevant to suitability;
  4. FOS should have found that Halifax was in breach of the duty of utmost good faith because exclusions/limitations were not brought to her attention and very low claims ratios should have been disclosed as a matter of reasonableness or in light of commercial standards of decency;
  5. FOS failed to provide adequate reasons.

The High Court Decision

Mrs Critchley’s claim failed on all grounds, with Mrs Justice Lang agreeing almost entirely with the arguments made by the FOS and Halifax.

On the first ground, it was common ground that FOS was required to take into account DISP App 3.  However, there was nothing to suggest that FOS had misinterpreted DISP App 3 or applied it incorrectly. Whilst FOS found that the sale was “substantially flawed”, there was evidence to rebut the presumption that Mrs Critchley would not have bought the PPI Policy.  FOS was entitled to give little weight to Mrs Critchley’s evidence as her recollections of the sale (due largely to the passage of time) were limited and she had not even remembered how she had purchased the PPI Policy, incorrectly recalling that she had applied by post rather than in branch.  Furthermore, her evidence as to why she would not have purchased the PPI Policy had it been explained properly, had been included on the advice of WFAC and resembled quite closely the consumer representations made in other complaints where WFAC were the representatives.  The Court held that FOS was entitled to take the view that it did and that the weight to be given to the evidence is quintessentially a judgment for the decision-maker and is not susceptible to legal challenge in the absence of a public law error. 

On the second ground, the suggestion that FOS applied a policy or set of counter-presumptions was “demonstrably not correct” as there was no reference to any such policy or counter-presumptions in its decision[4].  FOS had undertaken a thorough, individualised consideration of Mrs Critchley’s position.

On the third ground, the court considered that Mrs Critchley’s eligibility for the PPI Policy was not irrelevant when considering its suitability.  If Mrs Critchley was not eligible for the PPI Policy, it would not have been suitable.   FOS took into account all relevant considerations when assessing the PPI Policy’s suitability, setting out a table with the benefits of the PPI Policy to Mrs Critchley – it simply took a different view to Mrs Critchley.

On the fourth ground, the court concluded that it would not be fair and reasonable in the circumstances of the case to impose requirements to make disclosure in the way Mrs Critchley argued (taking into account that Halifax was the insurance intermediary in this case).

On the final ground, the High Court held that the reasons provided met the required standard.


This case has several interesting takeaways.  First, and perhaps most crucially, the case makes it is appropriate for firms and FOS to reject PPI complaints on grounds of causation, even if there are substantial flaws to the sale of PPI.  The court was unwilling to interfere unless the decision was perverse/irrational (public policy).  In this case FOS had acted properly and thoroughly.  This reluctance from the court to interfere will be welcome news to firms and FOS.

When assessing PPI complaints, FOS does have access to ‘Navigator’, a software programme which suggests an outcome to the complaint (FOS may depart from the suggested outcome, although apparently rarely does).  Whilst the Ombudsman did not use Navigator in this case, the adjudicator had.  The judge appreciated the concerns that WFAC may have about the risks of using a software programme in the determination of claims, but stated that this case was not the appropriate vehicle for challenge to the manner in which Navigator has been programmed and used by adjudicators. 

Finally, whilst the FCA’s deadline for complaints about PPI has passed, the handling of PPI complaints will continue for some time and we may therefore see more of these types of challenges.

[1]  A presumption that unless there is evidence of the contrary, it should be presumed that the complainant would not have brought PPI if the sale was substantially flawed.

[2]  General insurance (including PPI) was not regulated by the FSA (as it was then) until 14 January 2005.

[3]  Prior to the complaint being referred to the Ombudsman, an adjudicator at FOS also rejected the complaint.

[4]  The Court accepted FOS’s evidence that the Navigator tool was not used when the Ombudsman made his decision, nor did he rely on the Navigator summary generated by the adjudicator.