The High Court has allowed an appeal by a Limerick man against two Financial Services Ombudsman decisions concerning an insurance policy for an investment house. The court found serious and significant errors in the decisions, including the handling of a central factual dispute and the decision not to hold an oral hearing.
The dispute followed a break-in and damage at the house in November 2005. The insurer, Royal & Sun Alliance (RSA), later voided the policy from its start, saying declarations about occupancy were false. The appellant maintained that he had told Bank of Ireland Insurance Services the property would remain unoccupied until he could furnish it, and that he signed blank paperwork which the bank later completed.
The Ombudsman partly upheld complaints about delays and poor communication in handling the claim, directing RSA to pay €400 and the bank to pay €250. But the Ombudsman rejected the main complaints about the policy’s suitability and the information recorded on the proposal form. The decisions were made on written submissions without an oral hearing.
On appeal, the High Court said the Ombudsman’s reasoning treated the appellant as having knowingly signed a completed declaration, but did not explain why his account of signing a blank form was rejected. The judge also noted that the Ombudsman had accepted that the appellant did not report having a tenant and that the bank had incorrectly recorded a sitting tenant and passed that information to RSA. The judgment said the differing treatment of those parts of the account was unexplained, despite a direct factual conflict that could not be resolved solely from documents.
The court held that the appellant’s failure to request a hearing was not conclusive. Although he had expressed a preference for resolving the complaint by agreement, the Ombudsman was obliged to consider an oral hearing where material facts conflicted. The judge concluded that not holding one was an error in this case.
The court also found that the Ombudsman had treated the proposal form as if it contained a single declaration that the property would be occupied by the appellant, his family or a tenant. The form instead contained separate, contradictory statements: one recorded a tenant, while another said the property was occupied solely by the appellant or his family. The judge noted that the appellant appeared to have paid an extra premium for the possibility of letting the house, which suggested a material distinction between tenancy and personal occupancy. The judgment said the providers arguably should have queried the conflicting declarations and cautioned him about the risk of the policy being voided.
The court allowed the appeal, finding that the Ombudsman’s decisions were vitiated by serious and significant errors. The judgment does not specify a further order or set out what happened to the complaints after the appeal.