Increased FOS limit is 'inappropriate', warns AMI

The Association says that by increasing the limit, the FCA has "lost sight of both its own and FOS’s purpose", which is to cater for cases that could be dealt with speedily and by using dispute resolution techniques.

The AMI says cases above these levels were deemed to be more appropriate for legal decisioning in courts based on contract law.

Last week, the AMI announced that it was "deeply concerned" over the FCA’s approach to the changes, believing it was misleading to say that respondents had “strongly supported” the extension.

It was revealed that of the 65 responses, 13 - predominantly trade associations who responded on behalf of their members - raised fundamental objections to extend the eligibility.

Robert Sinclair, chief executive of the AMI, said: “Accessing dispute resolution for such significant cases on a fair and reasonable basis rather than a proper legal dispute procedure through the courts is just inappropriate.

"Just because there are examples of higher claims being paid out does not warrant a radical increase to the FOS limit. Even most of the respondents who agreed to the extension of FOS eligibility to include larger SMEs did not support an increase to the limit, with only three suggesting that it should be that high. Relying purely on data analysis is not a sufficient justification. It was always considered that higher value disputes with complex arguments should be the subject of legal remedy rather than FOS.

"AMI will respond to the consultation accordingly and we encourage individual firms to do the same.”