Federal Court rules that “Dispute splitting” at FOS is not “claim splitting”

Financial Lines

The Financial Ombudsman Service (FOS) Terms of Reference specify the maximum financial remedies which may be awarded by FOS “per claim”.  Individuals whose losses exceed the financial caps often argue that their dispute involves multiple “claims” and is therefore subject to multiple limits.  Unsurprisingly that position is disputed by Financial Services Providers and their insurers.

While FOS has issued guidelines about “claim splitting”, until recently their approach had not been the subject of judicial consideration.  In Wealthsure Pty Ltd v Financial Ombudsman Service Pty Ltd [2013] FCA 292 the Federal Court of Australia considered the issue.

We consider the decision in the attached alert.