On 21 May 2024, a draft statutory instrument (SI) – The Financial Services and Markets 2000 (Ombudsman Scheme) (Fees) Regulations 2024 – was published on legislation.gov.uk, along with a draft explanatory memorandum.

The draft SI would allow the Financial Ombudsman Service (FOS) to charge fees to claims management companies (CMCs) and legal professionals (together referred to as ‘professional representatives’) bringing cases to the FOS on behalf of consumer complainants.

The explanatory memorandum notes that, while many professional representatives act responsibly, the FOS has informed HM Treasury that it sees a mixed picture of good and poor behaviour from CMCs and legal professionals. The FOS has also reported examples of professional representatives submitting large volumes of seemingly templated and poorly evidenced complaints, which impacts the FOS’ ability to promptly resolve other consumer complaints.

The Government also notes concerns that firms subject to complaints may feel pressured into settling claims early (before they are formally submitted to the FOS) where the level of redress being sought by the professional representative is less than the amount the firm would potentially be required to pay at the outcome of the case, as this reduces the overall cost to the firm. It warns that these outcomes are not aligned with the purpose of the FOS.

To address this, the draft SI enables the FOS to amend its rules to charge case fees to CMCs and legal professionals for bringing complaints, subject to its usual consultation processes.