Assurant General Insurance Limited v Financial Ombudsman Service

On a judicial review of the Financial Ombudsman Service’s jurisdiction, the reviewing court must determine its role by statutory interpretation. A jurisdictional issue is for the court as an objective precedent fact only where the statutory scheme indicates that Parliament intended the court to be the final fact-finder. Where the issue is a complex, multifactorial and evaluative question of mixed law and fact, overlaps with the merits, and benefits from specialist expertise, the Ombudsman may be the final decision-maker, subject to ordinary public law controls.

Whether retailers acted as an insurer’s agents was such a question. Agency depends on the substance of the relationship, particularly authority to alter the principal’s legal relations, assessed objectively in contractual and commercial context. Labels, mutual profitability and equality of bargaining power are not conclusive.

The Financial Ombudsman Service accepted jurisdiction over four complaints alleging mis-selling of payment protection insurance sold through catalogue retailers. The policies were provided and underwritten by Assurant General Insurance Limited, while the retailers sold the policies to consumers.

Assurant sought judicial review of the FOS’s final decisions under [2022] EWHC 2766 (Admin), arguing that the retailers were not its agents and that the agency issue was a precedent fact for the court to determine. The FOS contended that the issue was a mixed question of law and fact for its own determination, subject to ordinary judicial review principles.

The central issues were the correct scope of review and whether the FOS had erred in concluding that the contractual arrangements created an agency relationship.

1. The claim was dismissed. Judgment was entered for the Financial Ombudsman Service. The four final decisions accepting jurisdiction were not disturbed.
2. The court’s role on a jurisdictional challenge must be identified through statutory interpretation of the relevant scheme. The question is whether the issue is an objective condition precedent intended to be determined finally by the court, or a matter entrusted to the specialist decision-maker. Relevant considerations include whether the issue is pure and objective fact, whether it is mixed law and fact or evaluative, whether it overlaps with the merits, and whether specialist expertise assists its resolution.
3. The agency issue was a complex, multifactorial and evaluative question of mixed fact and law. It also involved contractual interpretation and materially overlapped with the merits of the mis-selling complaints. The FOS’s specialist expertise, informal procedure and iterative process for keeping jurisdiction under review were important features of the statutory scheme. The FOS was therefore the intended decision-maker, subject to procedural fairness, rationality in fact-finding and correction of errors of law.
4. The FOS had rationally applied the law of agency and construed the contracts. Agency is a matter of substance, not label. The central question was whether the retailers were authorised to alter Assurant’s legal relations with consumers, assessed objectively in the contractual, commercial and regulatory context. The retailers’ authority to create insurer-insured relationships binding Assurant was a legitimate starting point.
5. The FOS was entitled to consider the retailers’ exclusivity, administrative and fiduciary functions, contractual controls, commission, profit share and the absence of a conclusive express exclusion of agency. Mutual profitability, equality of bargaining power and the absence of an express agency label did not establish a principal-to-principal relationship. The FOS’s conclusion was rational and legally open to it.

Not stated in the judgment.