Recommendation 159

Witnesses also suggested that where a FOS ruling involves historic cases or historic mass redress events, it can become punitively expensive for firms. Witnesses highlighted the fact that the FOS applies eight per cent interest a year to the compensation that firms are required to pay. Stephen Haddrill told us that “if the claim goes back over a considerable period, that boosts it quite significantly.” 241 We note, however, that the eight per cent figure is in line with the current rate on judgement debts, as set by the Lord Chancellor. 242