Financial Ombudsman Service

The Financial Ombudsman Service (FOS) is an independent dispute resolution scheme that exists to assist consumers in resolving complaints with financial services firms. For information on the powers, process and scope of the FOS, see Practice Note: Financial Ombudsman Service—essentials.

The Dispute Resolution: Complaints (DISP) section of the Financial Conduct Authority (FCA) Handbook sets out in detail the role, jurisdiction and procedures of the FOS. DISP 1 contains rules and guidance on how firms should deal with complaints promptly and fairly, including complaints that could be referred to the FOS. For guidance on DISP 1 and the main

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Lost in the war—Judgment in the Russian aircraft claims (Aercap v AIG)

Financial Services analysis: Following a mega trial spanning over 12 weeks, the court held that the aircraft lessors (including AerCap and DAE) were entitled to recover under their contingent War Risks (WR) cover, but were not entitled to recover under their All Risks (AR) cover, for aircraft and engines stranded in Russia following the 2022 invasion of Ukraine. Aercap made its primary claim under its AR cover while DAE advanced its primary claim under its WR cover. The lessors lost the aircraft on 10 March 2022, when the Russian government issued Government Resolution (‘GR’) 311–a decree prohibiting the return of aircraft to the lessors in response to Western sanctions against Russia. As a consequence, while AerCap originally claimed losses of over US$3.4bn under its AR cover (reduced after settlements to US$2.051bn), it failed against its AR cover and its recovery was confined to a US$1.2bn WR aggregate limit. By contrast, DAE succeeded in its primary claim under its WR cover. The case provides significant guidance on various issues. Key issues of interest include: the test for ‘loss’ by deprivation of assets; the scope of the Political Peril (‘act…for political…purposes’) and Government Peril (“by or under the order of any government”); the ‘grip of the peril’ doctrine; the causation analysis where there are concurrent or independent causes of loss; the distinction between Contingent and Possessed covers in lessor policies; and the scope of economic sanctions against Russia. Written by Aradhya Sethiya, pupil barrister at 7 King’s Bench Walk.

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