The court cut Barclays’ recoverable costs by 8%, while Santander, NatWest and Vanquis recovered 100%.
The High Court has ordered the Financial Ombudsman Service (FOS) to pay 100% of the costs of Santander UK, NatWest and Vanquis following their successful judicial review claims. Barclays will recover 92% of its costs after the court found a limited reduction was appropriate.
Mr Justice Dexter Dias delivered the costs judgment on 7 September 2026 following a contested trial involving four banks and the FOS. The underlying claims concerned the FOS’s interpretation of its jurisdiction over complaints about potentially unfair credit relationships under section 140A of the Consumer Credit Act 1974.
The banks had challenged decisions made by ombudsmen in July 2024. The court previously ruled in favour of the four banks and quashed the decisions, finding that the FOS had made a fundamental error of law in its interpretation of its jurisdiction.
The subsequent dispute focused on how much of the banks’ legal costs should be recoverable and how much should be paid before detailed assessment.
The FOS argued that Barclays should recover only 60% of its costs, while Santander, NatWest and Vanquis should recover 50%. It also proposed that only 40% of the relevant costs should be paid on account.
The court rejected most of those arguments.
For Barclays, the judge found that one ground of challenge — an Article 1 Protocol 1 argument under the European Convention on Human Rights — had failed. However, its impact on the overall costs was limited. The court also rejected criticism of Barclays’ conduct, finding that it had acted reasonably and had taken the lead in establishing the fundamental legal error in the FOS’s decision-making.
The judge ultimately reduced Barclays’ recoverable costs by 8%.
For Santander, the court found no valid basis for reducing its costs. Its submissions were considered useful and non-duplicative, while its correspondence seeking reconsideration by the FOS was described as reasonable litigation conduct.
The court reached the same conclusion for NatWest and Vanquis. Their submissions were found to be focused and proportionate, while attempts to resolve the claims were considered reasonable conduct in compliance with alternative dispute resolution obligations.
The judge also rejected the FOS’s argument that a costs order could have a significant “chilling effect”. The court noted that the FOS is not a statutory regulator and had provided no evidence demonstrating such an effect. It concluded that there was no appreciable or plausible chilling effect on the day-to-day decisions of ombudsmen.
The court ordered the FOS to pay 92% of Barclays’ costs and 100% of the costs of Santander, NatWest and Vanquis, subject to detailed assessment. Each bank is also to receive 50% of its relevant costs as a payment on account, with payment due within 14 days of the court’s order.