Court of Appeal reaffirms strict test in considering Financial Services Ombudsman decisions

The recent decision in the Court of Appeal case De Paor -v- Financial Services Ombudsman reaffirms the stringent test which must be adopted by the High Court in considering decisions of the Financial Services Ombudsman. The appellant joined Quinn Healthcare’s (the Provider) medical expenses insurance scheme. In August 2008, she was diagnosed with breast cancer and underwent surgery. She contacted the Provider following surgery, to enquire about cover for her further treatment, and in particular, a course of radiation. She was advised by the Provider that this treatment would not be covered under her Personal Care Plan, but that if she transferred to a Family Care Plan for a slightly higher premium, she would be covered for the specific form of radiation required. On the basis of this advice, the appellant agreed to change her policy to a Family Care Plan and proceeded with her medical treatment. It subsequently transpired that she would require chemotherapy before the radiation treatment – when advised the Provider of the change she was informed that she was not covered for either radiation or chemotherapy as her cancer was considered to be a pre-existing illness. The Provider ultimately agreed to cover her for eight sessions of chemotherapy but refused to cover her for radiation treatment. The appellant complained that by failing to honour the assurances given to her and classifying her condition as pre-existing, the Provider caused her inordinate stress and worry in relation to payments for various elements of her on-going cancer treatment and forced her to suspend further treatments required (such as bone density scans, MRI and CT scans and ECGs) pending a resolution of the dispute which she referred to the Financial Services Ombudsman in April 2010. The Provider acknowledged that the appellant was incorrectly advised on aspects of cover on her policy for the treatment, and then agreed to pay not only for the treatment but also to make further payment as a gesture of goodwill in respect of other aspects of the on-going treatment. An award of €850 was made to the appellant in respect of distress and inconvenience, and it is in respect of this amount of compensation that the appellant appealed the High Court. The parties agreed that it is not the function of the Court to place itself in the shoes of the Financial Services Ombudsman, and held that if the Court was to treat matters such as this as an appeal on quantum in the usual sense, it is likely that such appeals would frequently come before the courts arising out of decisions of the Ombudsman. If that were permitted, it would have the effect of frustrating the purpose of the scheme which is aimed at informal resolution of consumer issues. The whole purpose of the legislative scheme is to keep the process – so far as possible – out of the courts. The Court’s decision was reached not on the issue of whether the learned judge would have awarded a greater sum for stress and inconvenience but rather whether “taking the adjudicative process as a whole, the decision reached was vitiated by a serious and significant error or a series of such errors”. Finding nothing in the Respondent’s decision that would meet that test, the appeal was dismissed.