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ombudsman news

issue 37

May/June 2004

ask ombudsman news - your questions answered

"frivolous and vexatious" complaint-

a trading standards officer writes ...

A consumer has just been to see us about her financial adviser. She was disappointed that you didn't uphold the complaint she made about the advice he gave her. She thought that was the end of the matter, but the adviser has now written to say that as her complaint to you was "frivolous and vexatious", she owes him £1,000. He says this is to cover his costs and your case fee. Is he right to demand this money-

No. Our service is free to consumers, whatever the outcome. There is generally a cost for firms, but they are not entitled to pass on any of this directly to any customer who brings a complaint to the ombudsman service.

A complaint cannot be described as "frivolous and vexatious" simply because we do not uphold it. In the vast majority of the cases that we decide not to uphold, it is clear that the customer had reasonable grounds for making their complaint. If we had thought your client's case was one of the few that we consider "frivolous and vexatious" (and therefore not worth looking into), we would have explained this clearly both to her and to the firm. And in such instances, we do not charge firms a case fee. The contract your consumer signed at the outset of her dealings with the adviser said that he could recover his costs if she referred a complaint to the ombudsman service and we said it was "frivolous and vexatious" - but we didn't say this about her case.

We did not uphold your client's case because we did not consider that she suffered any financial loss as a result of inappropriate advice. However, we did say that the adviser should pay her a sum to compensate her for the distress and inconvenience that his poor complaint-handling caused. This is because he had attempted to persuade her that she'd have to pay his costs if she came to the ombudsman service and we didn't find in her favour.


We're a small firm, and are starting to get more mortgage endowment complaints than we've had to deal with before. Recently, a few of these have ended up being referred to the ombudsman service for the first time. I'm aware of your working together conferences, but wonder if you do any events specifically on mortgage endowment complaints for firms in a similar position to ours-

Unfortunately, you've just missed one - but there will be another conference on this topic in Manchester on 29 September, specifically aimed at small firms. If the timing or venue are not convenient, why not contact our external liaison team on 020 7964 1400- If they can't answer all your questions over the phone, they may be able to visit your firm when they are next in your area.

Walter Merricks, chief ombudsman

ombudsman news issue 37 [PDF format]

ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.

The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.