Heather Moor and Edgecomb Ltd, R (on the application of) v The Financial Ombudsman Service Ltd & Anor

This is a renewed application for permission to appeal following a refusal by Stanley Burnton LJ on paper. The application concerns a decision of HHJ Davis sitting as a Deputy High Court judge who decided in a judgment dated 8 September 2009 to refuse two applications for judicial review, so effectively this is the fourth time that an application has been made for judicial review on two matters, once on paper before the judge below, once orally before HHJ Davis, once on paper before Stanley Burnton LJ and now orally before me.

Both the two applications for judicial review concern the independent financial advisor known as Heather, Moor and Edgecomb Limited, which I, in common with other judges who have been concerned with cases concerning this body, will refer to as “HME”.

The first of the two applications for judicial review concerns proceedings before the Financial Ombudsman concerning advice that HME had given Captain Ross. He was a former British Airways pilot, and the advice given by HME concerned whether he should move his pension from the BA pension scheme into a “stand alone” scheme.

HME wanted an oral hearing before the Financial Ombudsman but he refused to grant it. He made his formal decision on the advice that was given by HME on 9 February 2007. Now HME effectively argues that it is only with an oral hearing that all the facts can be properly investigated and all issues of reliance and causation can properly be investigated.

The first application is for a judicial review of the Financial Ombudsman 's decision not to grant an oral hearing. The matter was first considered by Mitting J on paper and then by HHJ Davis after an oral hearing where the case was, as I read his judgment, fully developed by Mr Brian Pickering.

The second application concerns a more fundamental attack on the Financial Ombudsman Service. The argument here is that it is not fully independent and impartial. It is said (and it was argued before HHJ Davis) that the Financial Ombudsman Service is too closely connected with the Financial Services Authority. It is said that the two work so closely together that the FOS cannot be truly independent and thereby satisfy the requirements of a fair, independent and impartial tribunal in accordance with Article 6 of the European Convention on Human Rights.

HHJ Davis was only dealing with the application for permission. However, he plainly thought that there was nothing in either of the applications on their merits, and he effectively said so in his judgment. That is clear from paragraph 15 of his judgment, where he rejected the first of the two applications I have mentioned, and from paragraph 20 in relation to the second one.

The first complaint that is raised by Mrs Pickering in her written grounds and her oral argument this morning is that the judge applied the wrong test when reaching his decision on 18 September 2009. Mrs Pickering, who presented the case this morning with care and moderation, said that the judge applied the wrong test. He should have said: “is there an arguable case?” However, in my view there is nothing in this first point. The judge plainly thought that there was no arguable case in respect of either application and he said so in his judgment.

The next argument is that HHJ Davis was wrong in any event because it was the case that there should be judicial review of the failure to grant an oral hearing so as to investigate the facts. Whether or not the facts are as is alleged by Mr and Mrs Pickering is beside the point. The question is whether or not there was some kind of procedural unfairness or an unreasonableness in the decision of the Financial Ombudsman not to grant an oral hearing. This court or the Administrative Court cannot, on a judicial review hearing, consider the actual outcome of a case. The judge held that there was nothing in the argument that there ought to have been an oral hearing and I agree with him. The matter was considered. I do not accept the argument that somehow or other the Financial Ombudsman Service has subverted the intention of Parliament and in my view the judge plainly arrived at the correct decision in not granting permission in relation to this first matter.

That deals with the first application.

As for the second application, I agree entirely with the judge. I think that there is nothing in the point that there is somehow too close a relationship between the two institutions, that is, to say the FSA and the FOS. It is suggested that the judge somehow misunderstood the written submissions that had been made by Mr Anthony Speight QC on behalf of HME. I do not read his judgment in that way. I think he understood them perfectly well.

Accordingly I have concluded that there is nothing in that application either. Therefore both of them must be dismissed.