The High Court allowed Andrew and Joanna Law’s appeal against a Financial Services Ombudsman decision rejecting their complaint that an investment product had been mis-sold. The court found serious errors in the Ombudsman’s reasoning and assessment of evidence. It did not determine the form of the order, saying it would hear counsel on that issue.
The Laws had invested €800,000 in the Evergreen Fund in October 2007 after selling an office building and placing €1.1 million in a Bank of Ireland deposit account. They cashed in the investment in October 2010, losing €192,000. They complained to the Ombudsman, who rejected the complaint on 21 January 2014 after an oral hearing.
On appeal, the Laws argued that the product was unsuitable for them and that the Ombudsman had made procedural and substantive errors. The High Court rejected their claim that the Ombudsman’s process was unfair. The judge said they had been represented throughout and had a fair opportunity to present their case. She also found no error in the Ombudsman’s conclusions about the adviser’s expertise, the regulatory guidelines, the Laws’ potential vulnerability, or whether they had been compelled to invest.
However, the judge found that the Ombudsman had placed unjustifiable weight on the Laws’ signatures on investment documents. A signed statement about risk, she said, was one relevant indicator but did not by itself establish that the investors understood the product or that it was suitable. The Ombudsman had also asked whether there was “objective evidence” of mis-selling when the investors’ actual understanding and the information given to them required a fact-specific assessment.
The judgment identified gaps in the Ombudsman’s treatment of the sale documents and the Laws’ finances. The Ombudsman accepted that part of the policy quotation, including details about management structures and service costs, had not been given to the couple at the time of investment. The judge said he had not adequately addressed the mandatory information requirements or the significance of the missing cost information. She also found that the financial review did not clearly show that the reported monthly income was expected to come from the fund itself, rather than a pension or other secure source.
The court held that the Ombudsman had failed to weigh and explain the evidence sufficiently, and that his decision was vitiated by serious error. The judgment allowed the appeal against his finding. It did not decide the underlying mis-selling complaint or specify a remedy; the form of the order remained for further submissions.