Financial Ombudsman Awards Increase

This is good news for consumers. However, from experience, the reality is that once an award is made against a firm, their insurance company tend to appoint legal advisers who will negotiate down the offer with the client. We had this experience years ago with a client who was sent an offer letter with a figure half that awarded by the FOS. The client accepted a lower offer than they had been awarded as they were threatened with a long appeal process with scare tactics suggesting that the offer may be withdrawn entirely. The client accepted on the basis that cash in the bank today, even if lower, is better than the potential of no payment nine plus months down the line. I'd like to see the FOS put more power in the client's hands to confidently deal with these tactics from PI insurers and their legal representatives.

A sensible move, and one that's long overdue. It has always been possible for people to pursue action via the courts rather than FOS but the costs of doing so can be prohibitively expensive. It also carries a risk of costs if the claim fails. Too often ordinary people are costed out due to an imbalance of arms: big companies and insurers can afford to pay for extensive (and expensive) legal representation. Raising the FOS limit allows more claims to be examined via this route but it also allows for appropriate levels of compensation, as the previous cap left too many people in the situation of only being partly compensated.