How much time do I have to make a claim against my Bank?
If you believe you might have a claim against your Bank for breach of contract and/or breach of duty, for example, it is important that you do not delay in seeking independent advice on the matter and progressing it, where appropriate. This is because statute sets out deadlines by which different types of claim must be issued, and if your claim is not issued in time you may be prevented from bringing it at all.
What are my options?
If expiry of the limitation deadline is imminent, it may be necessary to issue proceedings protectively or seek the agreement of the Defendant to a ‘standstill agreement’, which would effectively extend the deadline on terms agreed. If you are concerned that you may be up against the clock, we recommend that you seek independent legal advice as soon as possible, in order to protect your position.
Otherwise, the first step when considering a claim is to attempt to seek redress from your Bank through their internal complaints procedure.
If you are dissatisfied with the outcome of your complaint, there may then be two key options available for you to consider, should you wish to progress the matter. The first is to make a submission to the Financial Ombudsman Service (“FOS”). The second is to issue your claim at court and litigate. Both have different approaches to dealing with cases and some cases may be more suitable to one option than the other, so it is important to discuss your options with a specialist legal adviser. It is also important to be aware that both options have different time limits for bringing claims.
Looking forward, the All Party Parliamentary Group on Fair Business Banking has mooted an additional option in the creation of a new tribunal. This is due to the recent spate of high profile claims against banks by Small and Medium Enterprises (SME). For further information, please read our recent blog on the issue here.
The Financial Ombudsman Service
The first option is to make a submission to the FOS. The FOS is an independent body established by the government to specifically deal with complaints against the financial services industry. As a service, they are impartial and fair to both sides of a dispute. Their approach to claims is inquisitorial. This means they will request information from each side and investigate the merits of any claim based on what information they receive. It is therefore important to make a full and detailed submission to the FOS and in order to do so, we recommend seeking the assistance of a specialist legal adviser.
The deadline for making a submission to the FOS is shorter period than the deadline for issuing a claim at court i.e. six months
from the date on which you receive a final response from your Bank regarding your complaint. This deadline can only be extended if your Bank voluntarily agrees or if there are “exceptional circumstances”, which can be a difficult threshold to pass. If you wish to pursue your claim, it is therefore important to make your submission to the FOS as soon as possible after receiving a final response from your Bank, in order to protect your position.
The second option is to initiate court proceedings. Generally speaking, the Limitation Act 1980 states that a Claimant must issue a claim against a Defendant within six years of the cause of action complained of. On that basis, you would typically only be able to claim against your Bank in respect of allegations of breach of contract and/or breach of duty going back six years from the date of breach.
However, there is an exception for breach of duty claims if the Claimant did not know a) that he/she had suffered damage; b) the identity of the Defendant; and/or c) that the damage was caused as a result of the Defendant’s acts or omissions, for example. In those circumstances, the limitation deadline will be the later of six years from the date the damage occurred or three years from the date the Claimant had the requisite knowledge.
In any event, if a claim is issued after the limitation deadline has expired, the Defendant will have an absolute defence to the claim. This means that you will be ‘time-barred’ from bringing your claim, unless you are able to show that you could not have issued the claim sooner.
It is still possible to take legal action if you have pursued the FOS option, but are dissatisfied with their response. Unlike the FOS process, court proceedings are adversarial in nature, which means that the courts will need to be persuaded by the legal arguments put forward by each party. It is therefore important to seek independent legal advice and representation before issuing a claim at court, if you are thinking of doing so.
How can Ellis Jones help you?
If you would like to discuss a potential claim, please do not hesitate to contact our expert Banking and Finance Litigation Solicitors. We have substantial experience in dealing with both submissions to the Financial Ombudsmen Service, and through the courts. To date, we have recovered in excess of £50 million from UK Banks for our clients. We are also prepared to consider acting on a No Win No Fee basis, subject to eligibility and initial assessment of your claim.