The FSPO Decision
The FSPO dismissed a complaint made by an insured against their
insurance provider (Decision). The insurance provider
(Appellant) declined cover in respect of business
disruption at the insured premises during the Covid-19 pandemic.
The FSPO decided three points of contractual interpretation in
favour of the insured, but ultimately held that the insured had
failed to produce evidence that there was a likelihood that
Covid-19 would occur at the insured premises.
In an unusual turn of events, the successful Appellant appealed to
the High Court, Chubb European Group SE v FSPO [2023] IEHC
74.
High Court Appeal
Although the Appellant was the successful party in terms of the
formal outcome before the FSPO, it maintained that the Decision
contained potentially prejudicial findings. Specifically, the
Appellant contended that the Decision gave a particular
interpretation to wording in an Insurance Policy
(Policy) that was used in other insurance policies
entered into by the Appellant. The Appellant also submitted that
the Decision triggered certain obligations under the Central
Bank's supervisory framework for business interruption
insurance. This, it argued, obliged the Appellant to carry out a
beneficial impact assessment of the Decision to identify other
persons in similar positions to the insured.
The FSPO submitted that the appeal was inadmissible where the
Financial Services and Pensions Ombudsman Act 2017
(Act), does not allow for a "winner's
appeal".
Precedent and FSPO Decisions
Simons J found that he did not need to resolve a question of whether the doctrine of precedent applies to FSPO decisions. Rather, the FSPO must act reasonably, which implies a general obligation to act consistently in deciding cases. Simons J found that whilst a previous decision is not determinative of a subsequent complaint, as there may be distinguishing grounds to justify a departure, FSPO decisions are of "persuasive" precedent.
Substance of Appeal
The FSPO argued that only the outcome of a decision was appealable. This was rejected, having regard to the wording of section 60 of the Act, under which the concept of a "decision" is given a wide meaning. Applying, section 60(3), the concept of a "decision" includes
- the decision itself,
- the grounds for the decision, and
- any direction given by the FSPO.
Simons J found that the statutory right of appeal under the Act embraces the outcome, and the grounds for that outcome.
Standing
The FSPO's substantive argument was that a successful party
could not appeal to the High Court. The FSPO had sought to rely on
an earlier ex tempore judgment of Kearns P to establish
that this point was previously decided by the High Court, and was
binding in this appeal. However, as there was no formal record of
the judgment, the Worldport jurisdiction did not apply.
Simons J, therefore, held that he had to adjudicate on the issue,
and having regard to the wording of the Act, he dismissed the
argument that a successful party to an FSPO decision cannot appeal
to the High Court. It would be illogical to interpret the Act such
that a right of appeal against certain FSPO findings (for example,
on contractual interpretation) which affected a party's
interests, was only available if the overall outcome of the
complaint went against that party.
The FSPO argued that an appeal by a successful party runs contrary
to the purpose of the FSPO scheme i.e., to keep the process out of
the courts. Simons J dismissed this argument, cautioning that
legislation cannot be readily interpreted as being so confined. The
nature of a statutory appeal depends on the wording of the
underlying legislation rather than a presumed intention to restrict
a right of access to the courts.
Findings
Simons J concluded that the FSPO committed a serious and significant error in his approach to contractual interpretation. Firstly, in interpreting the Policy without applying the proper principles of contractual interpretation as most recently set out in Brushfield Ltd (T/A The Clarence Hotel) v Arachas Corporate Brokers Ltd [2021]. Secondly, in not applying fair procedures, by not properly engaging with submissions made by the Appellant and failing to provide any reasons for not following those submissions.
Simons J concluded that it would be inappropriate for him to determine the questions of contractual interpretation. He continued that
"The court will not, therefore, be taking a blue pencil, as it were, to the impugned decision and substituting the court's own findings for those of the [FSPO]".
Simons J granted an order setting aside the Decision, with no order of remittal (although the latter part was only a provisional view, and Simons J will hear the parties further on this point). This means that the "offending findings" made against the Appellant are expunged and the Decision cannot be relied upon as a precedent or to trigger the Appellant's obligations under the Central Bank's supervisory policy.
Impact
It does not follow, as a matter of course, that the judgment can
be read across other statutory schemes or appeals. The nature and
extent of statutory appeals depend on the wording of the
underpinning legislative provisions. A distinguishing feature from
other statutory appeals is the extensive powers of the High Court
in disposing of appeals from the FSPO.
The case featured novel points around the substance of a statutory
appeal from the FSPO to the High Court, and who has standing to
bring such an appeal. The findings of Simons J will be cautiously
welcomed by financial service providers who, although ultimately
successful in an FSPO complaint, can point to potential prejudice
by its decision. Superficially at least, it appears paradoxical
that a successful party has a decision overturned, and remains to
be seen whether the provisional view of Simons J on remitting the
case will change on further submissions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.