Quinn Direct win appeal against Ombudsman’s blanket decision

THE HIGH COURT has overturned a decision of the Financial Services Ombudsman that insurance company Quinn Direct must refund “administration” charges imposed on all affected customers over a six year period for transferring insurance.

Ms Justice Mary Finlay Geoghegan yesterday ruled that Ombudsman Joe Meade, pictured, had no power to issue such a general direction in circumstances where only one customer had formally complained.

She found the Ombudsman’s power was confined, in this particular case, to directing Quinn Direct to refund only the particular customer who had complained that he had been charged the €25 administrative charge without any notification in policy documents that such a charge would be applied.

However, the judge stressed that, in other cases, it was open to a group of customers to make complaints. If those complaints were upheld by the Ombudsman, then it was open to him to make a direction relating to all those who made the complaint, she said.

She also noted that the Ombudsman has powers to issue a direction to a financial service provider requiring it to change a practice in the future in a way which, she said, would normally affect multiple consumers.

However, she said, that issue did not arise in the case of Quinn Direct as, since the complaint was made and upheld, it had notified policy holders in a 2006 policy document that an administrative fee would be charged on transferring insurance to another vehicle.

Quinn Direct initiated the court action after the Ombudsman’s decision of April 2, 2007 directing the company to return €25 “administration charges” imposed on all consumers who transferred motor insurance from one vehicle to another. He directed Quinn Direct to refund that money within three months.

The court found that this order was not allowed and that the Ombudsman had no power to issue it.