Judge Jay in the High court overturns FOS decision
Aviva took a FOS decision to review at the High Court. This costs £154 application fee to the HM Courts. IFAC filed one last year and we also succeeded – except out of court, which is even quicker. FOS threw their hand in straight away.
It was a really simple case of non disclosure. The life insurance applicant was seeing his GP and being referred to specialists at the time of making an application. Within a month of the policy start date a claim was made. Judge Jay said that a claim under the policy was a certainty, and therefore Aviva was right to reject the claim. But that is not what the case is about.
What is key is that the FOS can be unfair. No surprises there. They do not need to determine cases exactly in accordance with the law. However the ombudsman is required by DISP 3.8.1 to take into account the relevant law, regulations, regulators' rules and guidance and standards, relevant codes of practice and, where appropriate, what he considers to have been good industry practice at the relevant time. He is free to depart from the relevant law, but if he does so he should say so in his decision and explain why.
FOS lost because they did not explain why they was departing from the rules and principles set out in governing law and practice. This is what Judge Jay said:
"I do have personal concerns about a jurisdiction such as this which occupies an uncertain space outside the common law and statute. The relationship between what is fair and reasonable, and what the law lays down, is not altogether clear…who, or what, defines the contours and content of fairness and reasonableness? "