The High Court has set aside a Financial Services Ombudsman direction requiring Quinn Direct Insurance Limited to refund €25 vehicle-change charges to consumers beyond the complainant whose case was before the Ombudsman.
In a judgment delivered on 4 October 2007, Ms Justice Finlay Geoghegan held that the direction was not authorised by section 57CI(4)(a) of the Central Bank Act 1942. That provision allowed the Ombudsman to direct a financial service provider to review, rectify, mitigate or change the conduct complained of or its consequences, but the court found that its scope was confined to the complainant or complainants concerned.
The underlying complaint was made by a motor policyholder identified in the judgment as Mr Gallagher. The Ombudsman had partly upheld his complaint on 2 April 2007, finding that Quinn Direct charged him a €25 administration fee when he changed his vehicle without having notified him of the charge in his policy documents. The complaint also concerned premiums and cancellation charges; the cancellation-charge element was not substantiated.
Quinn Direct agreed to pay Mr Gallagher €50, as recommended by the Ombudsman’s investigator. That part of the finding was not appealed. The appeal concerned a separate direction requiring the insurer to return €25 charges to consumers who had paid them during the preceding six years, and to report the number of refunds made. The direction set a three-calendar-month deadline.
The court concluded that a complaint under the statutory scheme must concern a financial service provider’s treatment of the complainant. It therefore held that the Ombudsman could not use the provision relied on to require refunds to other consumers who had not complained. The court noted that a separate power to direct a provider to change a practice could extend to future conduct affecting other customers, but that issue did not arise here; the insurer’s 2006 policy document already gave notice of the vehicle-change fee.
The court set aside the refund direction. It did not determine Quinn Direct’s further arguments that the direction breached fair procedures or was not included in the finding as required. The €50 payment to Mr Gallagher was outside the appeal and was not set aside.