Barclays Bank UK Plc & Ors v Financial Ombudsman Service: High Court quashes FOS jurisdiction decisions over unfair credit relationships

The High Court has quashed four jurisdiction decisions by the Financial Ombudsman Service (FOS), ruling that the ombudsman's novel interpretation of its powers over consumer credit complaints was wrong in law. The judgement of Mr Justice Dexter Dias, handed down on 24 June 2026, also marks the first known instance of the Financial Conduct Authority (FCA) intervening in proceedings to oppose the FOS's own legal position.

The dispute

The claims were brought by Barclays Bank UK Plc, National Westminster Bank Plc, Vanquis Bank Limited, and Santander UK Plc, each challenging jurisdiction decisions issued by FOS ombudsmen in July 2024. In each case, a consumer complained about allegedly unaffordable credit extended by their bank, invoking the unfair relationship provisions under section 140A of the Consumer Credit Act 1974. The banks argued that the complaints, or substantial parts of them, fell outside the FOS's six-year time limit under DISP 2.8.2 R.

Following the Supreme Court's decision in Smith v Royal Bank of Scotland plc [2023] UKSC 34, the FOS reviewed its approach and concluded that a "corrective responsibility" arose from both Smith and the earlier ruling in Plevin v Paragon Personal Finance Limited [2014] UKSC 61. On that basis, the FOS asserted jurisdiction over the entirety of each credit relationship.

The corrective responsibility argument

The FOS argued that where an unfair credit relationship subsists, the creditor bears a continuing responsibility to correct that unfairness. Each failure to do so, it contended, constitutes a fresh "event" for the purposes of DISP 2.8.2 R, meaning time does not run while the relationship remains uncorrected. The FOS relied on passages from Lord Sumption in Plevin and Lord Leggatt in Smith to support the construction.

Dias J rejected the argument in full. He held that Plevin is properly understood as a classificatory decision: it explains how a credit relationship may be rendered unfair through omission rather than overt act, but it does not establish a positive and enduring obligation on creditors to correct unfairness thereafter. The distinction lies between attributing responsibility for creating an unfair relationship and prescribing a duty to remedy it. Smith, the court found, similarly provides no support for the proposition that each failure to correct constitutes a daily event under DISP 2.8.2 R. That case concerned the accrual of a cause of action in civil proceedings, a question entirely distinct from the ombudsman's complaints jurisdiction.

Acts within the six-year period

The FOS advanced an alternative argument: that acts falling within the six-year period were sufficient to open jurisdiction over the entirety of the credit relationship, potentially encompassing events predating the limitation window by decades. The court dismissed this route as well. The breadth of the ombudsman's redress discretion under section 229 of FSMA 2000 does not, Dias J held, extend the class of qualifying events. He drew a sharp distinction between using historical relationship context to assess fairness under section 228 of FSMA 2000, which is permissible and consistent with R (Mortgage Agency Service Number Five Ltd) v FOS [2022] EWHC 1979, and treating those same historical events as independently capable of attracting redress.

The FCA's intervention

The FCA's decision to align itself with the claimant banks drew criticism from the FOS, which argued the regulator had failed to have regard to its consumer protection objective. Dias J rejected that criticism. By supporting a legally correct interpretation of the FOS's jurisdiction, the FCA was acting consistently with its statutory duties. Consumer protection, he observed, is not a mandate to protect consumers at any cost.

All four jurisdiction decisions were quashed. Barclays' additional ground under Article 1 of Protocol 1 to the ECHR was dismissed as adding nothing of substance to the jurisdiction analysis. The court will receive written submissions on consequential orders and any declaratory relief sought.

[2026] EWHC 1555 (Admin) | Decided: 24 June 2026 | Mr Justice Dexter Dias