Templars Estates Ltd and others v National Westminster Bank Plc and Royal Bank of Scotland, 2016
The High Court was asked to decide whether proceedings should be stayed whilst the Financial Ombudsman Service (FOS) investigated Templar’s complaints.
Allegations were raised by Templar that Natwest had been negligent in the advice they had given. The dispute had in fact been an on-going matter for a considerable period of time to the point that stand-still agreements had been entered into in order to give parties breathing space to investigate claims, resolve matters and avoid litigation.
Despite the matter dragging on for many years, a resolution was not reached and standstill agreements were subsequently not extended. Therefore, to avoid the matter being statute-barred and to protect their position, Templar issued proceedings.
Templar thought it would be more cost-effective for the matter to be referred to FOS rather than the High Court; they asked that Natwest to agree to a stay in the court proceedings, whilst the FOS investigated.
Natwest refused to agree and Templar applied to the court for a stay pending investigation by the FOS.
Natwest argued that given the amount of time that has passed, the claim had now become stale and that they would be prejudiced. In addition, Natwest raised argument that the FOS decisions were not binding.; the matter could still be brought to the High Court later on and a stay would delay matters further.
Templar and Natwest finally came to an agreement, and the High Court decided the FOS decision would be binding. Templar would not be able to return to the High Court on the matter.
Parties to a dispute should consider whether it would be more cost and time efficient to approach the FOS and agree for their decision to be binding rather than taking litigation steps.
Although every case would revolve around its own facts, this case certainly provides useful guidance on the matter.
Please note that the above in no way constitutes as legal advice, for further information and advice contact Nath Solicitors.