Utmost Paneurope DAC v Financial Services and Pensions Ombudsman

• Jurisdiction: Ireland
• Judge: Mr. Justice Garrett Simons
• Judgment Date: 10 November 2020
• Neutral Citation: [2020] IEHC 538
• Date: 10 November 2020
• Docket Number: 2019 No. 286 MCA
• Court: High Court

IN THE MATTER OF AN APPEAL UNDER SECTION 64 OF THE FINANCIAL SERVICES AND PENSIONS OMBUDSMAN ACT 2017

BETWEEN

UTMOST PANEUROPE DAC

APPELLANT

AND

FINANCIAL SERVICES AND PENSIONS OMBUDSMAN

RESPONDENT

AND

W.

NOTICE PARTY

[2020] IEHC 538

Garrett Simons

2019 No. 286 MCA

THE HIGH COURT

Insurance – Group income protection scheme – Conduct – Appellant appealing against a decision of the respondent – Whether the respondent’s approach to his assessment of the appellant’s conduct was erroneous in law

Facts: The notice party (the insured party) had a complex medical history and had been the subject of specific exclusions at the time of her entry into a group income protection scheme in 2006. The appellant, Utmost Paneurope, the insurance provider which administered the scheme, subsequently declined a claim made pursuant to the scheme in 2016 on the basis that the insured party’s inability to work was not attributable to a non-excluded illness. The insured party then made a complaint to the respondent, the Financial Services and Pensions Ombudsman, and the Ombudsman upheld the complaint in full. The Ombudsman directed the insurance provider to admit the claim from a particular date, and to make payments from that date into the future. This direction was subject to a rider that the insurance provider remained entitled, in accordance with the policy provisions, to further review the claim at any time in the future. The insurance provider appealed the Ombudsman’s decision to the High Court. The two principal issues for determination by the court on the appeal were as follows: whether the Ombudsman erred in determining that the insurance provider had placed too great an emphasis on an attempt to decline cover; and whether the remedy prescribed under the terms of the impugned decision was erroneous.

Held by Simons J that the approach of the Ombudsman to his assessment of the insurance provider’s conduct in its processing of the claim (and, in particular, the appeal) was erroneous in law. Simons J held that the legal errors were serious and significant, and the decision was invalid as a result. Simons J noted that the Ombudsman purported to make a finding that the conduct of the insurance provider was unreasonable, without any attempt to measure that conduct against the relevant code of conduct, i.e. the Consumer Protection Code (2012) published by the Central Bank. Simons J held that the insurance provider was entitled, under clause 7.6 of the Consumer Protection Code (2012), to verify the validity of the claim received from the insured party prior to admitting the claim. Simons J noted that it was nowhere explained in the Ombudsman’s decision why it was that the insurance provider’s conduct in processing the claim should be regarded as inconsistent with its entitlement to verify the validity of a claim.

Simons J held that he would grant an extension of time for the bringing of an appeal pursuant to s. 64(2) of the Financial Services and Pensions Ombudsman Act 2017. Simons J noted that the appeal was made out-of-time in circumstances where the notification of the decision was initially misfiled within the insurance provider’s offices. Simons J held that he would make an order pursuant to s. 64(3)(b) of the 2017 Act setting aside the Ombudsman’s decision and direction of 15 July 2019 in their entirety. Simons J held that he would make an order pursuant to s. 40 of the Civil Liability and Courts Act 2004 restricting the publication or broadcasting of the name and address of the insured party. Simons J held that this order was appropriate in circumstances where it had been necessary for the purposes of this judgment to set out the notice party’s medical history in detail. Simons J noted that the default position under Part 11 of the Legal Services Regulation Act 2015 is that legal costs follow the event. Simons J held that, in the event that the Ombudsman contended that a different form of order should be made, written submissions should be filed on his behalf by 24 November 2020 and that any replying submissions on behalf of the insurance provider should be filed by 8 December 2020.

Appeal allowed.

JUDGMENT of Mr. Justice Garrett Simons delivered on 10 November 2020

INTRODUCTION 2

MEDICAL HISTORY 3

OMBUDSMAN'S DECISION 7

DETAILED DISCUSSION 12

OMBUDSMAN'S JURISDICTION 12

HIGH COURT'S APPELLATE JURISDICTION 15

(1). WHAT DID THE OMBUDSMAN ACTUALLY DECIDE? 20

(2). IS FINDING VITIATED BY SERIOUS AND SIGNIFICANT ERROR? 23

(3). REMEDY DIRECTED BY OMBUDSMAN 30

CONCLUSION AND FORM OF ORDER 33

NO REDACTION REQUIRED

INTRODUCTION

1 This matter comes before the High Court by way of a statutory appeal against a decision of the Financial Services and Pensions Ombudsman (“ the Ombudsman”). The decision of the Ombudsman concerned the manner in which an insurance provider had processed a claim pursuant to a group income protection scheme (“ the scheme” or “ the policy”). The complaint was made by the insured party against the insurance provider which now administers the scheme. Utmost Paneurope (“ the insurance provider”).

2 In brief outline, the insured party has a complex medical history and had been the subject of specific exclusions at the time of her entry into the scheme in 2006. The insurance provider subsequently declined a claim made pursuant to the scheme in 2016 on the basis that the insured party's inability to work was not attributable to a non-excluded illness.

3 The insured party then made a complaint to the Ombudsman, and the Ombudsman upheld the complaint in full. The Ombudsman directed the insurance provider to admit the claim from a particular date, and to make payments from that date into the future. This direction was subject to a rider that the insurance provider remained entitled, in accordance with the policy provisions, to further review the claim at any time in the future. The insurance provider has appealed the Ombudsman's decision to the High Court.

4 The threshold which must be met before the High Court will interfere on a statutory appeal is discussed in detail presently. For introductory purposes, it is sufficient to note that the impugned decision must be vitiated by a serious and significant error or a series of such errors.

5 The two principal issues for determination by this court on the appeal are as follows. The first is whether the Ombudsman erred in determining that the insurance provider had placed too great an emphasis on an attempt to decline cover. The second is whether the remedy prescribed under the terms of the impugned decision is erroneous.

MEDICAL HISTORY

6 In order to understand properly the issues which fall for determination on this appeal, it is necessary first to refer briefly to the insured party's medical history. It should be emphasised that this is done solely to provide context for the dispute which has now arisen. It is neither necessary nor appropriate for this court to make any findings of fact in this regard.

7 It is common case that the insured party suffers from fibromyalgia. It is also common case that the insured party is excluded from making a claim in respect of this illness. This is because when the insured party was admitted to the group income protection scheme in November 2006, she was subject to a number of “member specific” exclusions, and these are defined in such a way as to exclude claims related to fibromyalgia. (See letter of 22 November 2006 to the insured party).

8 The insured party also suffers, to some extent, from rheumatoid arthritis. The precise extent of this illness, and its implications for her ability to work, had been a matter in controversy during the course of the processing of her claim.

9 The insured party has been examined by three consultant rheumatologists. She had attended two of these consultants in 2016, having been referred to them by her general practitioner. The key findings in their respective reports are set out below. The insured party had subsequently been examined by a third consultant in December 2016 at the request of the insurance provider as part of the processing of her claim.

10 The first report in time is that of Dr. Lee. This report is dated 22 April 2016 and had been included as part of the claim submitted to the insurance provider on 8 June 2016. Insofar as relevant, the report reads as follows.

“There are no clinical evidence of active Rheumatoid Arthritis despite a raised CCP Ab. Her current clinical presentations and features are more in consistent with that of Fibromyalgia. I have commenced her on Lyrica starting at a low dose of 25mgnocte for the first week to be increased to 25mg bd maintenance. I have also advised her to consider Cognitive Behavioural Therapy if needs be. Given the positive CCP Ab. I will see her for follow up in 2-3 months with repeat FBC, FSR and CRP.”

11 The insurance provider made an initial decision to decline the claim on 29 July 2016. The insured party exercised her contractual right of appeal. As part of her appeal, a report from a second consultant rheumatologist. Dr O'Connell. was included. This report is dated 28 September 2016. The relevant part of the report reads as follows.

“Thanks for your letter. With regards to our diagnosis I would regard there being a number of different issues going. It is our feeling that you probably do have rheumatoid arthritis though thankfully it is relatively early. This appears to be causing at least some of the pains in your hands, feet, knees and other joints. It can be associated with marked morning stiffness. In your case it is not associated with marked swelling in the joints but it does have positivity for the anti CCP Antibody and a moderately raised ESR and CRP. Rheumatoid factor is negative. You also have a fair deal of widespread muscular pain with poor sleep and have had bladder problems, a chest pain which thankfully has turned out to be...