One of the advantages of using the Financial Ombudsman Service (FOS) for obtaining recompense for negligent financial advice is that it is a relatively simple and inexpensive procedure compared with formal litigation. The FOS currently allows a maximum payment of £100,000 to be paid to a claimant in respect of any one claim, although it can recommend that a higher payment is made. Where the estimated loss is larger than £100,000, there may be a temptation to try to use the FOS for the first £100,000 of claim and the courts for any excess. However, this strategy is unlikely to work and indeed, the FOS has confirmed that its awards are final and binding on both parties to the dispute.
A recent employment dispute illustrated the principle that the same matter cannot be litigated twice. A man brought a claim for wrongful dismissal in the Employment Tribunal - which has a £25,000 cap on payment. He tried to reserve the right to pursue any additional sum in the High Court. His damages were assessed by the Tribunal at £80,000, which therefore ordered the maximum payment of £25,000. When he sought to recoup the balance in the High Court, his claim was struck out.