FOS cap increases to £430,000 and £195,000 for complaints referred on or after 1 April 2024

In a press release yesterday, FOS announced increases to the applicable FOS cap that will impact complaints referred to FOS on or after 1 April 2024. £430,000 will apply to complaints about acts or omissions by firms on or after 1 April 2019 where the complaint is referred on or after 1 April 2024 and £195,000 will apply to complaints about acts or omissions by firms on or after 1 April 2019 where the complaint is referred on or after 1 April 2024.

Given inflationary increases (linked to CPI) over the last few years we now have a patchwork of different FOS caps that apply dependent on when a complaint is referred to FOS and whether the act or omission complained about took place on or after 1 April 2019.  The following apply:

• £415,000 for complaints referred to FOS on or after 1 April 2023 about acts or omissions by firms on or after 1 April 2019.
• £375,000 for complaints referred to FOS between 1 April 2022 and 31 March 2023 about acts or omissions by firms on or after 1 April 2019.
• £355,000 for complaints referred to FOS between 1 April 2020 and 31 March 2022 about acts or omissions by firms on or after 1 April 2019.
• £350,000 for complaints referred to FOS between 1 April 2019 and 31 March 2020 about acts or omissions by firms on or after 1 April 2019.
• £190,000 for complaints referred to FOS on or after 1 April 2023 about acts or omissions by firms before 1 April 2019.
• £170,000 for complaints referred to FOS between 1 April 2022 and 31 March 2023 about acts or omissions by firms before 1 April 2019.
• £160,000 for complaints referred to FOS between 1 April 2019 and 31 March 2022 about acts of omissions by firms before 1 April 2019. 

So since 2020 we have seen increases from £350,000 to now £430,000 and from £160,000 to £195,000.  As the consumer duty was introduced in July 2023 the higher limits of £415,000 and £430,000 are likely to apply to breaches of the consumer duty.

The question is – how much higher will the cap go before the jurisdiction of FOS is revisited and whether a fair and reasonable jurisdiction is suitable for a forum that can award now up to £430,000?

There is a challenge to FOS' jurisdiction due to be heard before the Court of Appeal in April 2024 and the importance to the financial services industry of that challenge arguably only increases with continued increases to the FOS cap.