The Institute of Insurance Brokers (IIB) has warned the Treasury it will seek a judicial review if it imposes the Financial Ombudsman Service (FOS) on general insurance intermediaries.

Announcing its response to the proposals, the IIB claimed that the FOS "flies in the face of natural justice". IIB director general Andrew Paddick warned earlier that if it were applied to general insurance products, the costs involved for brokers would be enormous.

Paddick said: "I am currently discussing our options with lawyers. No one should be in any doubt, that failing an acceptable outcome to negotiations, the IIB will pursue every legal remedy available, just as it did by appealing against the director general of fair trading's decision and winning over the GISC Rule F42 issue."