Material Non-Disclosure And Insurance

O'Donoghue v. Office of The Financial Services and Pensions Ombudsman [2018] IEHC 581

The High Court in O'Donoghue v. Office of The Financial Services and Pensions Ombudsman [2018] IEHC 581 examined findings of the Office of the Financial Services Ombudsman("FSPO") in relation to the voiding of an insurance policy where it was claimed material information had not been provided. This case shows how the court will view such findings and also that awards can still be made by the FSPO even where it is held that disclosures were not made.

Background

In 2011, Mr. O'Donoghue made a complaint to the FSPO against Bank of Ireland Insurance Services ("BIIS"), and RSA Insurance ("RSA"), an insurance intermediary and insurance company.

The FSPO addressed the complaints separately and issued its findings in 2012. Those findings were the subject of an appeal to the High Court. O'Malley J. allowed the appeal and sent the complaints back to the FSPO for further review - see O'Donoghue v The Financial Services Ombudsman [2014] IEHC 620. The complaints were then re-adjudicated and an oral hearing was conducted in relation to the complaint against BIIS. There was more correspondence between the parties and additional items of evidence were requested by the FSPO. The FSPO then issued its findings in relation to both the RSA and BIIS complaints in 2017. Those findings were the subject of the appeal before the High Court. The main ground of appeal was that the FSPO was wrong in making a finding of fact that the insurance policy was correctly voided.

Facts

In approximately 2005, Mr. O'Donoghue purchased a residential apartment as an investment property. He contacted BIIS to take out an insurance policy for the property. The underwriter of the insurance policy was RSA with BIIS acting as intermediary.

In November 2005, the property was broken into. Mr. O'Donoghue made a claim under the policy, but, in May 2006, RSA informed him that they were voiding the policy for misrepresentation and refunded the premium paid. The form filled in when purchasing the insurance policy outlined that the questions on that form related to facts considered material to giving insurance and that if there was any doubt as to whether a fact was material it should be disclosed. The form defined a "material fact" as "one which might affect the company's decision to give you insurance and the premium we might charge".

The form described the property as a tenanted property that was "not left...