The High Court has set aside a Financial Services Ombudsman finding against Deirdre Earls in a dispute over FBD Insurance’s decision to void her home insurance policy. The court found legal errors in the Ombudsman’s handling of her complaint and remitted it for review. It did not decide whether FBD must pay the fire claim or resolve whether the 2008 shooting damage had to be disclosed.
Ms Earls’ home in St Mary’s Park, Limerick, was slightly damaged when bullets struck its walls during a random shooting in March 2008. She contacted her then insurer, AXA, but made no claim. In November 2010, she took out cover with FBD after answering “0” to a question about accidents or claims in the previous five years.
A fire seriously damaged the inside of her home in August 2013 while she was away. FBD later said it would treat the policy as void from its inception, on the basis that she had failed to disclose a previous claim relating to the gunfire. The judgment states that Ms Earls had made no such claim to AXA. FBD’s complaint response also described the shooting as an attack on her property and attributed the absence of a claim to paperwork; the court said those descriptions were inaccurate.
The Deputy Financial Services Ombudsman rejected Ms Earls’ complaint in August 2014, finding that the shooting was a material fact that should have been disclosed, even though she had not pursued a claim with AXA. Ms Earls appealed under section 57CL of the Central Bank Act 1942.
The High Court said it was reviewing the Ombudsman’s decision for serious and significant error, rather than rehearing the insurance dispute from the beginning. It identified at least five legal errors. Among them, the Finding did not appear to consider that insurance contracts require utmost good faith from both parties; that an insured’s disclosure duty involves a genuine effort to achieve accuracy; or that questions on an application form may limit what a reasonable applicant would understand must be disclosed. The court also said the Finding did not address what a reasonable insured would consider relevant or whether the policy was the kind of “over-the-counter” insurance discussed in earlier case law.
The court set aside the Ombudsman’s Finding and remitted the complaint for review. It did not substitute its own decision on the merits of the insurance claim.