It can also be expected that there will be more joined up thinking between the Fos and the FCA now and in the future, particularly given the focus on cross-sector trends in the Fos' latest business plan, where it has identified financial hardship as a particular trend; noting the FCA’s work in this area, as well as the challenges of persistent debt and indebtedness, particularly in the use of high-cost credit.
Issues around indebtedness and financial hardship will naturally become an increasingly prominent issue given the current circumstances, and it is likely the Fos will draw on current FCA Covid-19 guidance in future when reaching adjudications and decisions in this and other areas.
This lock-step approach has also been reflected in the numerous platforms that the Fos and FCA have shared in recent months in various webinars aimed at financial service firms and advisers.
Prior to the pandemic, the Fos had been facing scrutiny from parliament, the media and the general public in terms of reducing its waiting times to investigate and resolve cases and has stated that it does aim to achieve this.
However, it is difficult to see how, under the current situation, this is going to be possible particularly given the necessary Covid-19 alterations the Fos has put in place around the way it works, reducing its phone line access hours and declining to accept posted mail.
It is also important to view these immediate issues in terms of the Fos's wider budgetary position, in which it has had to absorb significant costs of just over £25m through the reduction of its reserves.
This is likely to make the deployment of resource and personnel more challenging than before, potentially resulting in slower decision-making.
These delays may also be compounded by potential legal challenges to Fos's final decisions by losing parties – particularly in cases where a Fos decision may potentially pose an existential threat to a business or have wide-ranging adverse impacts across its business lines.
Delays may also occur where the Fos may be keeping a close eye on the outcome of significant court cases relating to financial services - such as the FCA test case above - which may have a bearing on its thinking and lead to certain workstreams being put 'on hold' until the court has issued a judgment.
All of the above factors mean that firms may face potentially significant delays before Fos complaints are resolved, leading to uncertainty.
And, even where they are resolved, firms will then need to take time to understand the learnings from such complaint decisions to ensure that they are complying with them properly as required under the FCA's rules.
