FOS criticises new litigation service
The Financial Ombudsman Service (FOS) has come out in response to the release of a new litigation service for investors from law firm Slater & Gordon, calling it “misleading”.
Last week, the law firm announced it would launch RECOVER – a service aimed at assisting people who suffer loss as a result of receiving bad financial advice by giving them the option of not having to pay upfront.
FOS chief ombudsman Colin Neave (pictured) said Australian consumers already had access to free and independent resolution of their financial disputes.
“It is misleading to claim … that ‘mum and dad’ investors have no option but to buy expensive litigation to pursue their claims against negligent financial advisers,” Neave said.
Neave said there was no void in the Australian financial services market that needed filling.
Slater & Gordon responded to the criticisms by FOS, stating it fully supported the work of FOS but that that the service had its limits.
Head of commercial and project litigation, Ken Fowlie, said FOS could only help investors who were looking to claim up to $150,000 and that RECOVER was designed to help with claims over that amount.
Fowlie said Slater & Gordon actively directed investors to the FOS for losses under $150,000.
Under the new offering, Slater & Gordon said investors would be able to get a fixed price assessment on the merits of their case, with some eligible clients being given access to success fee arrangements.
There would also be the prospect of a “no win, no fee” arrangement for their own legal fees, as well as the potential to access insurance in relation to the other sides’ costs.
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