The FCA yesterday published a set of near-final rules which, if adopted, will not only widen access to the Financial Ombudsman Service to businesses with a turnover of up £6.5 million, but will increase the award limit from the current £150,000 to £350,000.

This will considerably increase access to justice for SMEs who struggle to find the funds to take their insurance disputes to court because of the cost-prohibitive litigation.


This proposed relaxation in the eligibility criteria will mean that a small business wishing to make a complaint at the FOS now only needs to show that it has an annual turnover of less than £6.5 million and has either fewer than 50 employees or a balance sheet total of less than £5 million. The FOS jurisdiction is currently considerably more restrictive being only accessible to micro-enterprises that employ fewer than 10 and have a turnover or annual balance sheet that does not exceed €2 million.

The changes are proposed to take effect for all complaints made to the FOS from 1 April 2019 but will not have retrospective effect, so must concern an act or omission which occurred on or after 1 April 2019.

The full policy statement can be accessed via the FCA website.

Limit Increase

Alongside the relaxation to the eligibility criteria, the FCA’s proposals will see an increase in the FOS’s binding award limit to £350,000 for any complaints about acts or omissions by firms on or after the date the new limit comes into force (provisionally 1 April 2019). It is also proposed to increase the £150,000 award limit for all other complaints to £160,000 and that both award limits should be increased each year, in line with CPI.

The FCA publication can be accessed here.

Both proposed changes will be very welcome news indeed to those small businesses who, following a devastating insurance loss, simply cannot afford to challenge their insurer via the courts and should herald an end to the David and Goliath style battles that we so often see in the medium-sized claims/medium-sized enterprises arena.

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This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.