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Ombudsman decision on insurance provider’s conduct in processing claim was erroneous in law

By: Ian Fitzharris BL

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High Court, by way of a statutory appeal against the decision of the Financial Services and Pensions Ombudsman finding that the provider of insurance of an income protection scheme placed too great an emphasis on an attempt to decline cover to its insured applicant, and directing the provider to admit the claim for income protection and make payments into the future, allows appeal and sets aside the decision as invalid in law, on the grounds that: the ombudsman committed legal errors which were serious and significant given, inter alia, that it was appropriate for the provider to ask pointed questions of an independent medical assessor; and the decision failed to properly acknowledge that the provider was entitled, pursuant to the consumer protection code, to verify the validity of a claim received prior to making a decision to admit the claim in the first instance.

Statutory appeal - decision of financial services ombudsman directing insurance provider of income protection scheme to admit claim for income protection from a particular date - whether ombudsman erred in determining that insurance provided had placed too great an emphasis on an attempt to decline cover - whether remedy provided is erroneous - insured party's medical history - fibromyalgia - scheme exclusions - independent medical examination of consultant rheumatologist - no significant degree of rheumatoid arthritis rendering insured disabled from work - ombudsman's decision-making process - preliminary decision - submissions on preliminary decision - final decision - definition of 'disability' under policy - finding of overemphasis by provider to quantify impact of medical conditions on insured's ability to work - ombudsman's jurisdiction - hybrid jurisdiction - previous statutory scheme governing financial service ombudsman - no finding made that insurance provider acted in breach of contract or otherwise contrary to law - High Court's appellate jurisdiction - appeal not intended to take form of a re-examination from beginning of merits of decision appealed from - threshold for successful appeal - serious and significant error or a series of such errors - degree of expertise and specialist knowledge of defendant - standard of review - level of deference on a question of law - assessment by ombudsman of medical evidence - standard of review applicable on an appeal is more exacting than the test of administrative unreasonableness applicable to judicial review proceedings - rationale of decision made - decision confined to a finding that conduct of insurance provider was unreasonable and improper - ombudsman is not required to adjudicate on allegations of breach of contract - ombudsman's assessment of insurance provider's conduct in its processing of claim was erroneous in law - serious and significant error - decision invalid - objective standard of 'reasonableness' - details of underlying contract of insurance - ombudsman's failure to properly acknowledge, in its decision, the insurance provider's entitlement under the consumer protection code to verify validity of claim received prior to making a decision to admit claim - provider's correspondence with medical assessor appropriate - no indication of right of internal appeal - ombudsman's decision must stand or fail on its own terms - subsequent elaboration should not be required and is impermissible - no attempt made to measure conduct against relevant code of conduct - unsubstantiated inferences drawn - remedy directed by ombudsman - no lawful connection between finding of unreasonable or improper conduct and remedy actually imposed - order granted extending time to appeal - order granted setting aside decision - order restricting publication or broadcasting of details of insured party

Note: This is intended to be a fair and accurate report of a decision made public by a court of law. Any errors should be notified to the editor and will be dealt with accordingly.

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