Derek O'Regan v Financial Services Ombudsman
| Jurisdiction | Ireland |
| Judge | Ms. Justice Iseult O'Malley |
| Judgment Date | 02 February 2015 |
| Neutral Citation | [2015] IEHC 85 |
| Date | 02 February 2015 |
| Court | High Court |
[2015] IEHC 85
THE HIGH COURT
BETWEEN
AND
ULSTER BANK INVESTMENT FUNDS LTD v FINANCIAL SERVICES OMBUDSMAN UNREP FINNEGAN 1.11.2006 2006/56/11976 2006 IEHC 323
GOVERNEY v FINANCIAL SERVICES OMBUDSMAN UNREP HEDIGAN 26.8.2013 2013/22/6429 2013 IEHC 403
HYDE v FINANCIAL SERVICES OMBUDSMAN UNREP CROSS 16.11.2011 2011/26/6887 2011 IEHC 422
LYONS & MURRAY v FINANCIAL SERVICES OMBUDSMAN UNREP HOGAN 14.12.2011 2011/31/8710 2011 IEHC 454
HAY v O'GRADY 1992 1 IR 210 1992 ILRM 689 1992/2/502
SCHUIT v MYLOTTE & ORS UNREP SUPREME 18.11.2010 2010/46/11639 2010 IESC 56
DOYLE v BANVILLE UNREP SUPREME 1.5.2012 2012/10/2784 2012 IESC 25
CENTRAL BANK ACT 1942 PART VIIB
CENTRAL BANK & FINANCIAL SERVICES AUTHORITY OF IRELAND ACT 2004
CENTRAL BANK ACT 1942 S57BB(C)
CENTRAL BANK ACT 1942 S57BK(1)
BANKING LAW
Financial Services Ombudsman
Statutory appeal - Principles to be applied - Oral hearing - Deference to expert tribunal - Mortgage protection policy - Serious illness cover - Misselling - Whether decision of Ombudsman vitiated by serious error or series of serious errors - Ulster Bank v Financial Services Ombudsman [2006] IEHC 323, (Unrep, Finnegan P, 1/11/2006); Governey v Financial Services Ombudsman [2013] IEHC 403, (Unrep, Hedigan J, 26/8/2013); Hyde v Financial Services Ombudsman [2011] IEHC 422, (Unrep, Cross J, 16/11/2011); Lyons v Financial Services Ombudsman [2011] IEHC 454, (Unrep, Hogan J, 14/12/2011); Hay v O'Grady [1992] 1 IR 210; Schuitt v Mylotte [2010] IESC 56, (Unrep, SC, 18/11/2010) and Doyle v Banville [2012] IESC 25, (Unrep, SC, 1/5/2012) applied - Central Bank Act 1942 (No 22), ss 55BB and 55BK - Central Bank and Financial Services Authority of Ireland Act 2004 (No 21) - Appeal dismissed (2014/169MCA - O'Malley J - 2/2/2015) [2015] IEHC 85
O'Regan v Financial Services Ombudsman
Facts: The appellants appealed against the respondent”s decision not to uphold their complaint against Zurich Life Assurance (‘Zurich’). The appellants were a husband and wife who believed they had taken out a mortgage protection policy that covered both of them in relation to serious illness. When the husband was diagnosed with rheumatoid arthritis he sought to make a claim against the policy. Zurich refused his claim because they stated that the policy did not include serious illness cover. The plaintiff appealed to the respondent in relation to Zurich”s decision. Zurich claimed they were not made aware of the family”s medical history and the serious illness cover was excluded for affordability reasons. Zurich also contended that the appellants did not apply for serious illness cover in the form they completed. The respondent found that the appellants” complaint was unsubstantiated. They appellants appealed to the High Court and the High Court remitted the matter for oral hearing. The respondent concluded that the documentary and oral evidence did not support the complaint that the provider removed the serious illness cover from the appellants” policy without their knowledge or consent. The appellants appealed to the High Court again on the basis they had been misled in relation to the policy. The appellants also argued that the paperwork since the original complaint had been “doctored” and there were inconsistencies in the documents put before the respondent.
Held by O“Malley J: The court felt great sympathy for the appellants. It determined the appellants had told Zurich the truth because there was no reason why they should try to conceal relevant information in subsequent years. The court agreed with the respondent”s conclusions and found no serious errors in the way the respondent dealt with the case.
This is an appeal against a decision by the respondent, made after the holding of an oral hearing, not to uphold the appellant's complaint against Zurich Life Assurance ("Zurich").
The appellant's case was that he at all times believed that a mortgage protection policy taken out by himself and his wife included serious illness cover. They discovered for the first time that it did not when, in 2011, he was diagnosed with rheumatoid arthritis and sought to make a claim against the policy.
Although the appeal is brought in the name of Mr. O'Regan only, it is accepted by the respondent that it is also brought on behalf of his wife since the mortgage and the insurance policy were in joint names. They are therefore referred to as "the appellants" or, where appropriate, by name.
Between 2005 and 2011 the appellants applied to Zurich for a number of mortgage-related insurance policies. Most, but not all, of the policies were applied for through a Mr. Pat Crowley, a financial consultant with Zurich. The appellants say that the policies always included cover for serious illness. It is their case that they were particularly conscious of the necessity for such cover because of certain issues in the family's medical history.
In January 2011, Mr. O'Regan was diagnosed with rheumatoid arthritis in his ankle and knee joints, which rendered him unable to pursue his normal occupation as a plasterer.
In August 2011, the appellant applied to Zurich pursuant to what he believed to be the terms of the then current insurance policy (dating from 2009) due to the diagnosis of rheumatoid arthritis. Zurich refused the plaintiff's claim on the basis that the policy in force did not include serious illness cover. According to the appellants, this was the first time that they realised that their insurance policy did not contain serious illness cover. It transpired that the most recent previous policy, entered into in 2008, also did not cover serious illness.
In September 2011, the plaintiff appealed the decision of Zurich to the respondent. In the Financial Services Ombudsman complaint form dated 22 nd September 2011, Mr. O'Regan summarised his complaint as follows:
"Our serious illness cover was taken out without our consent in 2008. We never got any paper work regarding this situation. We were insured since 2005 for serious illness why would we stop that premium? We just want fair play, what was owed to us."
Mr. O'Regan wrote a number of letters outlining the various issues he had with Zurich's refusal of his claim. Mr. O'Regan and his wife had serious illness cover from 2005 to 2007 at €88 per month. In 2007 they re-mortgaged the family home, which involved the taking out of a new policy. Thereafter they paid €83.23 per month for the new policy, which included serious illness cover. According to the appellants, this policy lapsed temporarily and they "reinstated" it in 2008 for €80.70 per month. In 2009, they say, they were offered new terms which would bring the cost of the premium down if they excluded rare diseases. They claim they were told "everything else stays the same". They assumed they were paying for serious illness cover all along and say, therefore, that Zurich removed it without their consent.
In asserting that the new policy contained serious illness cover, reference is made by the plaintiffs as to the comparison of the price of the premium paid in the 2007 policy containing serious illness cover and the premium in the 2008 policy, a difference of around €3.
Mr. O'Regan emphasises the importance of serious illness cover to their family in light of the family's medical history of cancer and arthritis. Mr. O'Regan claims that Mr. Crowley knew that his brother had died of cancer in 2002 and, therefore, knew that he wanted this particular cover. He also says that any errors in relation to medical questions on the form are Mr. Crowley's fault, as he filled in the form after being given the relevant information. Mr. Crowley's evidence was that he was never made aware of the relevant medical history. He says that the serious illness cover was not included in 2008 or 2009 for reasons of affordability and that the appellants were fully informed as to what their choices were.
Zurich has at all times maintained that there was never an option of dropping "rare diseases", or any diseases, from the serious illness cover. A customer either opted for the cover or did not. Mr. Crowley's evidence was to the same effect, and he denied ever having made suggestions to the contrary.
The appellants say that Mr. Crowley did not explain the changes to their policy and that they never received a copy of the full documentation relating to the new policy. They therefore claim that they were deprived of information relating to the cover they had taken out, and denied the opportunity to identify any errors and change the policy.
Zurich's position throughout has been reiterated that the in-force policy did not include serious illness cover because it was not applied for on the form that the appellants completed. Zurich also asserted that a letter was sent to the appellants on 27 th January, 2009, enclosing a policy certificate, policy document and disclosure notes. They say they are satisfied that the policy operated in accordance with its terms and conditions, that the details of the policies were correct and in accordance with the signed application forms and confirmed in the various documents issued to them.
Following an investigation carried out by way of correspondence with the parties, the respondent made a finding on 24 th July, 2012 that the complaint was not substantiated.
On the 25 th February, 2013 this finding was appealed to the High Court. On the 5 th March, 2013 the High Court...
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O'Regan v Financial Services Ombudsman
...O'Regan, from the decision of the High Court (O'Malley J.) delivered on 2nd February 2015: see O'Regan v. Financial Services Ombudsman [2015] IEHC 85. The issue arises in the following fashion. 2 On various dates between 2004 and 2011 the appellant, Mr. Derek O'Regan and his wife, Ms. Sonia......