The High Court has dismissed F.B.D. Insurance plc’s appeal against two Financial Services Ombudsman decisions that upheld Terence Mongan’s complaint about the insurer’s refusal to pay a motor insurance claim.
Mr Justice Hedigan delivered judgment on 29 July 2011. The dispute followed a single-car crash on 25 October 2008, in which Mongan’s vehicle was extensively damaged. The insurer refused the claim and declared the policy void from its start, saying he had not disclosed previous convictions when applying for or renewing the policy.
The insurer argued that Mongan should have disclosed four convictions predating the crash. These included a 2002 public order conviction and a 2007 conviction described in the judgment as “burglary intent”. The insurer accepted that five other convictions from 2009 post-dated the crash and should be disregarded. The judgment also noted that two earlier convictions listed in correspondence—a 2008 theft conviction and a failure-to-appear conviction—were not addressed in the Ombudsman’s ruling.
The Ombudsman had concluded that the application form’s questions limited the relevant convictions to motoring offences within a five-year period. The Ombudsman also found that, given the wording of the renewal notices, the policyholder was not obliged to disclose the convictions at issue. The insurer submitted that convictions were relevant to its assessment of “moral hazard” and that the Ombudsman had failed to consider their full extent and significance.
The court applied the statutory appeal test: the insurer had to show, on the balance of probabilities, that the decision-making process as a whole contained a serious and significant error, with due regard to the Ombudsman’s expertise. It said the Ombudsman’s role was an informal complaint-resolution function and that the court should give substantial deference to findings within that role.
The judge held that the Ombudsman was required to consider whether the wording of the insurer’s questions had limited the duty of disclosure. He found no serious error in the Ombudsman’s decision and said its view of the law on that issue was consistent with the authorities cited. The court dismissed the appeal. The judgment did not substitute a new decision on the insurance claim; it upheld the Ombudsman’s challenged decisions against this appeal.