Assurant General Insurance Ltd v Financial Ombudsman Service
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Collins Rice |
| Judgment Date | 02 November 2022 |
| Neutral Citation | [2022] EWHC 2766 (Admin) |
| Docket Number | Case No: CO/273/2022 |
| Court | King's Bench Division (Administrative Court) |
[2022] EWHC 2766 (Admin)
THE HONOURABLE Mrs Justice Collins Rice
Case No: CO/273/2022
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Miss Saima Hanif KC & Mr Theodore Van Sante (instructed by Pinsent Masons LLP) for the Claimant
Mr James Strachan KC (instructed by Financial Ombudsman Service) for the Defendant
Hearing dates: 11 th & 12 th October 2022
Approved Judgment
This judgment was handed down remotely at 10.30am on 2 October 2022 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
Introduction
Mrs Joanne Manley, Miss Lynn Evans, the late Mrs Elaine Bradley and Mrs Rachael Gooding used well-known home-shopping catalogues (Freemans, Grattan and Express Gifts, respectively). Each took advantage of the retailer's credit facilities to spread payment for their purchases. And each was also sold a ‘payment protection insurance’ policy to ‘cover’ that credit arrangement.
They have all complained to the Financial Ombudsman Service that they were mis-sold the PPI. At the time, the retailers were not directly subject to statutory financial services regulation in respect of selling insurance (the position has changed since). However, the PPI policies themselves were provided and underwritten by Assurant General Insurance Ltd. The FOS has decided to accept the individuals' complaints against Assurant, for further consideration.
Assurant brings these judicial review proceedings to try to establish that the FOS has no jurisdiction to do so.
The issues
(a) The Ombudsman's jurisdiction
The FOS has satisfied itself, in ‘final decisions’ made in each of the four cases on 26 th October 2021, that it has jurisdiction to consider those cases under section 226 of the Financial Services and Markets Act 2000, the statute which sets it up and gives it its functions. The section provides as follows:
226. – Compulsory jurisdiction
(1) A complaint which relates to an act or omission of a person (‘the respondent’) in carrying on an activity to which compulsory jurisdiction rules apply is to be dealt with under the ombudsman scheme …
Those rules are contained in the Financial Conduct Authority's Handbook, in the section dealing with ‘Dispute resolution: Complaints’ (DISP 2: Jurisdiction of the Financial Ombudsman Service).
Here we find the Rule (2.3.1R) that confers jurisdiction on the FOS to consider a complaint ‘ if it relates to an act or omission by’ Assurant. And we find Guidance (2.3.3G) that ‘ complaints about acts or omissions include those in respect of which… [Assurant] … is responsible (including business of any … agent … for which … [Assurant] … has accepted responsibility’.
FOS says it has jurisdiction because the catalogue retailers were acting as agents for Assurant in selling PPI policies. So their acts and omissions were its acts and omissions. Assurant says that is wrong, and FOS erred in finding there was an agency relationship between it and the retailers. That is the challenge for which Assurant has been granted permission for judicial review.
(b) The correct approach of the reviewing Court
The parties dispute not only the answer to the agency question, but the approach I should take to considering their dispute.
Assurant says the question: ‘ were the retailers acting as its agents?’ is
a question of precedent fact and/or a question for which there is either a right or a wrong answer, such that it is for the Court to determine.
But the FOS says this:
the Ombudsman finds the facts based on the evidence made available to the Ombudsman (where such fact-finding is subject to review on Wednesbury grounds) and the Court decides, on the facts found by the Ombudsman, whether the application of the law to them is correct rather than reasonable.
Analysis
(i) The correct approach of the reviewing court
(a) Introduction
In general, a court undertaking Judicial Review of a public authority's decisions will take a different approach to questions of law and questions of fact. If an error of law is alleged, a court must make up its own mind about what the law is, and decide whether there has been an error accordingly. But if an error of fact is alleged, a court will show appropriate deference to the fact-finding functions of the authority (particularly where conferred under statute), and intervene only if it considers the authority's decision to be outside the spectrum of findings reasonably available to it on proper consideration of the materials before it.
Where, however, a challenge is made not to a decision in the exercise of an authority's functions, but to a decision about whether it has those functions in the first place – a jurisdictional question, in other words – matters are less simple. If, on a proper analysis, it appears that jurisdiction itself depends on the existence of a matter of fact, then a reviewing court may have to take its own view of whether that fact does or does not exist. It cannot otherwise know what functions, if any, the authority properly has in law. In such cases, and in that sense, jurisdictional questions always engage issues of law.
The correct approach of reviewing courts to jurisdictional questions in general, and to FOS's jurisdiction in particular, have been the subject of a number of recent decisions of the courts. What follows is by way of reference to those that were particularly drawn to my attention by the parties.
(b) The caselaw on jurisdictional challenge
I start, as invited by Assurant, with the landmark Supreme Court case of R (A) v Croydon LBC [2009] UKSC 8, and the much-quoted analysis of Baroness Hale JSC. Local authorities have distinctive decision-making powers and duties in relation to ‘children in need’, so that is a jurisdictional matter. Whether a child is ‘in need’ is a complex, multifactorial and evaluative issue. So ‘ within the limits of fair process and Wednesbury reasonableness there are no clear cut right or wrong answers’ and a reviewing court will defer accordingly to the local authority as the intended final arbiter within the legislative scheme. But whether someone is ‘a child’ in the first place is a different kind of question. The relevant statutory scheme is entirely for and about children. Someone's date of birth is a wholly objective fact. Ascertaining it may be difficult (and often is, in the case of young asylum seekers with no papers). But the truth of the matter is not something for the reasonable evaluation of the local authority, it is something for a fact-finding exercise by a court, weighing the evidence. It is, jurisdictionally, a ‘precedent fact’ on which the courts, not the local authority, were the intended final arbiters within the statutory scheme in question.
A local authority is not disinterested in the answer to the question of whether someone is a child: onerous practical and resourcing consequences ensue in law if so. The relevant statutory scheme was found in these circumstances to have envisaged a role for the court in ensuring the question is determined by full and impartial judicial process. But in other cases it will always be for a court to decide in the first place whether any jurisdictional challenge before it turns on a factual issue which is (a) within the authority's remit as final arbiter or (b) within the court's own remit to decide as an objective condition precedent to jurisdiction. That decision is, crucially, always governed by the statutory context within which the question arises. It is a question of law, of statutory interpretation.
I was then taken to a small group of High Court decisions following Croydon which have had to grapple with this question of law, or statutory interpretation, in the specific context of that part of the Financial Services and Markets Act 2000 (including s.226) which governs the jurisdiction of the FOS.
A careful piece of statutory analysis was undertaken by Sales J (as he then was) in R (Bankole) v FOS [2012] EWHC 3555 (Admin). At issue was the correct approach of the reviewing court to the question of whether a complaint had been received within the time limit provided for in the statutory scheme. The Court declined to categorise this as a precedent fact for it to determine itself: it was ‘clear’ as a matter of statutory interpretation – bearing in mind in particular ‘ the general objective for a statutory scheme under which certain disputes may be resolved quickly and with minimum formality by an independent person, being the ombudsman’ – that the question was a matter on which the decision of the FOS was final, subject only to review by the High Court on usual judicial review grounds.
Bankole was considered and distinguished by Wilkie J in R (Bluefin Insurance Services Ltd) v FOS [2014] EWHC 3413 (Admin), a case particularly relied on by Assurant. Here, the issue was how to characterise the question of whether someone was an ‘eligible complainant’ at the relevant time. That depended in turn on whether they were a ‘consumer’, that is, acting outside their trade, business or profession, as provided in the DISP section of the FCA Handbook. This time, the statutory interpretation exercise led the Court to conclude that the question was a ‘precedent fact’ issue for it to decide itself, bearing particularly in mind that ‘ access to the compulsory jurisdiction of FOS, with its enhanced benefits or burdens, is determined by reference to limiting conditions stated in objective terms’. Interestingly, the Court also proceeded on...
To continue reading
Request your trial