The High Court has set aside a Financial Services Ombudsman finding that upheld Allianz’s refusal to cover losses from a burglary and fire at a Dundalk bed and breakfast. The complaint has been remitted to the Ombudsman. The court said the dispute between two experts about the alarm required an oral hearing, but left any further directions to be addressed after submissions from the parties.
Oliver Murphy’s premises were burgled and set alight on 1 August 2009. He claimed losses of about €200,000 under an Allianz policy. Allianz declined the claim, saying information about locks on the premises was inaccurate and that the alarm had been inoperative for years, breaching policy conditions.
Murphy disputed those conclusions. An engineer engaged by Allianz’s loss adjuster, Greg Duggan, reported that the alarm could not be functionally tested because its wiring had been torn out. He observed corrosion and damage and considered the system likely to have been inoperative for many years. Electrician Kieran Nevin, whom Murphy engaged, reported that he tested the removed alarm components and found them working. The experts’ accounts and conclusions differed.
The Ombudsman’s April 2011 finding directed Allianz to pay Murphy €250 for delay in handling the claim, but otherwise accepted Allianz’s position. It found the alarm was not operable and that information about window locks amounted to a material misdescription. The High Court noted that the finding did not analyse the competing expert views or explain how the Ombudsman resolved the alarm dispute.
Murphy appealed, arguing that the Ombudsman should have held an oral hearing and that the finding did not adequately address his evidence and submissions. The Ombudsman said neither party had sought a hearing during the investigation and that he considered one would not have assisted.
Mr Justice Michael Peart held that, in the circumstances, fair procedures required an opportunity for Duggan to explain his report and be cross-examined, and for Murphy’s expert to be heard. The Ombudsman’s power to direct a hearing did not depend on a party requesting one. The judge said the court could not readily defer to the Ombudsman on a technical disagreement outside the Ombudsman’s expertise.
The court set aside the Ombudsman’s 21 April 2011 finding and remitted it to him under section 57CM(2)(c) of the Central Bank and Financial Services Authority of Ireland Act 2004. The judge said he would hear submissions on any further directions. The judgment does not decide whether Allianz must cover the claimed losses or resolve the underlying dispute about the alarm and policy terms.