The High Court has allowed Ciaran O’Neill’s appeal against a Financial Services Ombudsman decision on his flood-damaged van insurance claim, and remitted the complaint to the Ombudsman for a rehearing. Mr Justice Hogan said the conflicting evidence about the damage raised a central factual dispute that could not fairly be resolved without an oral hearing.
The appeal concerned Zurich Insurance plc’s refusal to indemnify Mr O’Neill under a commercial vehicle policy for damage to his diesel Mercedes van. The van was caught in flooding in Newcastle, Co. Dublin, on 24 October 2011. The judgment recounts that after a vehicle travelling ahead passed through floodwater, Mr O’Neill followed. A Jeep coming the other way sent water over the van’s bonnet; its engine stalled. As a nearby river burst its banks, the van became submerged to windscreen level, and Mr O’Neill escaped through the open driver’s window.
The assessors’ accounts differed sharply. Zurich’s assessor reported a light engine knock and possible water ingress, but later concluded there was no evidence that the engine components had been damaged by flooding. Mr O’Neill’s assessor said water ingress had caused a small hydraulic lock and damaged the cylinder-head gasket, and concluded the damage resulted from the van being submerged. The repairer, Automotive Services, also reported replacing a water-damaged starter motor. Zurich’s assessor reported being told by the repairer’s service manager that no engine-component damage had been found.
The Ombudsman had accepted Zurich’s position based on its assessors’ reports, finding that the company was entitled to decline the claim. The Ombudsman also said the case did not require an oral hearing to resolve a factual conflict. A separate complaint about Zurich’s handling of telephone records had resulted in a €500 payment for maladministration; that issue was not part of this appeal.
Mr Justice Hogan held that the assessor reports presented a stark conflict on the central question of whether flooding caused the damage. He said the Ombudsman could not fairly reject the complaint without giving Mr O’Neill an opportunity to address that dispute at an oral hearing. The judgment referred to the statutory ground for substantiating a complaint where conduct was based on a mistake of fact, and to the requirement for fair procedures.
The court allowed the appeal under section 57CM(2)(b) of the Central Bank Act 1942 and remitted the complaint to the Ombudsman for rehearing under section 57CM(2)(c). It did not determine whether Zurich was required to cover the van’s damage; that question remains for the rehearing.