Smartt v Financial Services Ombudsman

• Jurisdiction: Ireland
• Judge: Mr. Justice Hedigan
• Judgment Date: 20 November 2013
• Neutral Citation: [2013] IEHC 518
• Docket Number: [2012 No. 253 MCA]
• Court: High Court
• Date: 20 November 2013

BETWEEN

IRENE SMARTT

APPELLANT

AND

THE FINANCIAL SERVICES OMBUDSMAN

RESPONDENT

[2013] IEHC 518

[2012 No. 253 MCA]

THE HIGH COURT

Financial dispute - Appeal against adjudication of the Financial Services Ombudsman - Insurance - Serious Illness Cover - Replacing existing policies

This case concerned an appeal against an adjudication of the Financial Services Ombudsman (FSO). The appellant, Irene Smart, complained to the FSO that her insurers cancelled her Serious Illness Cover (SIC) without notifying her and without consent. She asserted that she was diagnosed with breast cancer in November 2010 and thereafter attempted to claim under this policy. She was informed that the SIC had been cancelled in 2008. In the complaint to the FSO, the appellant argued that she had not instructed the Society to cancel the SIC and alleged that the Society subsequently changed the documentation to give the impression that she did not need SIC. The insurance provider, however, submitted that it acted in compliance with the appellant”s instructions to replace a Mortgage Protection Policy which included SIC with a decreased cover which did not.

The FSO indicated that he considered the complaint of the appellant with reference to the written evidence. The appellant had signed various forms whilst replacing her Mortgage Protection Policy and ticked a box acknowledging that she had been advised as to the consequences of replacing an existing policy. The appellant also signed the Business Replacement form which stated that the old policy was ‘Mortgage Protection and Serious Illness’ and that the new policy was ‘Mortgage Protection’ only. The Welcome Pack letter of February 2008 also asked the appellant to ‘carefully consider the documentation’ to confirm that the cover provided was in line with her expectations. Moreover, the Policy Schedule and Customer Information Notice was clear in stating that only life cover had been taken out. Taking this evidence into account, the FSO decided that the applicant had foregone SIC.

Following the guidance set out in Ulster Bank v Financial Services Ombudsman and Others, Hedigan J. held it was not for the court to agree or disagree with the finding of the FSO so long as it was a decision reasonably based on the evidence available. On the finding of the FSO that in accepting a reduced premium and being put on notice by her policy documentation, that the appellant had foregone SIC, the court held this to be reasonable. The FSO was held to be entitled to rely on the appellant”s repeated signatures of documents acknowledging the risks and consequences of replacing her existing policy cover. It was found that in an appeal such as this, the appellant was required to show that the adjudication was compromised by significant error. This standard was not met, and the decision of the FSO was held to have been reasonably based on the evidence available.

The appeal was therefore dismissed.

Mr. Justice Hedigan

JUDGMENT of Mr. Justice Hedigan delivered on the 20th day of November 2013

1 The role of the Financial Services Ombudsman is now well established. It provides an informal, cost-free system of resolving disputes. See Walsh v. The Financial Services Ombudsman (the High Court, 27 ^th June 2012).

2 The role of the court in an appeal such as this is also well established. In Ulster Bank v. Financial Services Ombudsman and Others[2006] IEHC 323, Finnegan P. stated:

"To succeed on this appeal the Plaintiff must establish as a matter of probability that, taking the adjudicative process as a whole, the decision reached was vitiated by a serious and significant error or a series of such errors. In applying the test the Court will have regard to the degree of expertise and specialist knowledge of the Defendant. The deferential standard is that applied by Keane C.J. in Orange v The Director of Telecommunications Regulation & Anor and not that in The State (Keegan) v Stardust Compensation Tribunal."

3 From this case, it is possible to extract the following principles that should guide the court in an appeal such as this:

(i) The burden of proof is on the appellant;

(ii) the onus of proof is a civil standard;

(iii) the court should not consider complaints about process or merits in isolation, but rather should consider the adjudicative process as a whole;

(iv) in light of the above principles, the onus is on the appellant to show that the decision reached was vitiated by a serious and significant in or a series of such errors;

(v) in applying this test, the court will adopt what is known as a deferential stance and must have regard to the degree of expertise and specialist knowledge of the Ombudsman.

The court can only intervene if it concludes that the Financial Services Ombudsman could not reasonably have come to the decision impugned based on the facts he had before him. See Governey v. Financial Services Ombudsman[2013] IEHC 403.

4 The complaint made to the Financial...