Assurant General Insurance Limited, R (on the application of) v Financial Ombudsman Service Limited & Ors

On judicial review of a compulsory-jurisdiction decision by the Financial Ombudsman Service, the applicable standard depends on the statutory scheme and the nature of the issue. The Ombudsman is ordinarily the primary fact-finder, subject to conventional public law review. The court must, however, determine questions of law for itself, including the construction and legal effect of a written contract.

An agency relationship depends on the substance of the parties’ agreement rather than its label. A retailer acts as an insurer’s agent in selling insurance where the agreement, construed as a whole, authorises the retailer to bind the insurer and contains characteristic indicators of agency, such as control over marketing, fiduciary obligations concerning premiums and an exclusive selling arrangement.

Four consumers complained to the Financial Ombudsman Service that retailers had mis-sold payment protection insurance underwritten by Assurant General Insurance Ltd. The retailers were not themselves subject to the relevant statutory regulation when the policies were sold. The Ombudsman nevertheless accepted jurisdiction because the retailers had acted as Assurant’s agents.

Collins Rice J dismissed Assurant’s judicial review claim in [2022] EWHC 2766 (Admin). She treated the agency issue as a mixed question of fact and law for the Ombudsman, subject to review for conventional public law error, and did not construe the agreements herself. Assurant appealed, contending that the court had to decide the jurisdictional issue and that the agreements did not make the retailers its agents when selling the policies.

The central questions were the respective roles of the court and the Ombudsman in determining jurisdiction, and whether the agreements created the relevant agency relationship.

1. Appeal dismissed. The High Court’s approach to the contractual issue was wrong in law, but the Financial Ombudsman Service had correctly concluded that the complaints were within its jurisdiction. Singh LJ gave the judgment, with which Warby and Peter Jackson LJJ agreed.

2. The fact that an issue concerns a jurisdictional fact does not automatically require the Administrative Court to determine that fact afresh. The allocation of responsibility depends on the proper construction of the governing statute and on the nature of the issue. Evaluative questions involving degree or opinion are ordinarily for the statutory decision-maker, subject to conventional judicial review: R (A) v London Borough of Croydon [2009] UKSC 8 applied.

3. Under the compulsory Ombudsman scheme established by the Financial Services and Markets Act 2000, factual questions are primarily for the Ombudsman. Its fact-finding is reviewable on conventional grounds, including irrationality and procedural unfairness. Judicial review is not an appeal and does not permit the complaint simply to be re-argued.

4. The construction and legal effect of a written contract are questions of law for the court. Where the terms of a contract are disputed, identifying those terms may require factual findings for the Ombudsman. Once the facts and terms are established, however, the court must determine the contract’s legal construction and whether the law has been correctly applied to the jurisdictional facts. The High Court erred by asking only whether the Ombudsman’s interpretation was rational instead of construing the agreements itself.

5. Agency is determined from what the parties agreed in substance, not from the label attached to their relationship. A general relationship that is not one of agency may also contain particular tasks for which one party assumes an ad hoc agency responsibility.

6. On their true construction, the insurance agreements made the retailers Assurant’s agents when selling the policies. The retailers could create binding insurance contracts between consumers and Assurant. Assurant exercised substantial control over marketing; the retailers owed fiduciary obligations concerning premiums; and they were required to market Assurant’s insurance exclusively. A clause denying partnership or authority beyond that expressly conferred could not negate the substantive agency relationship.

7. The retailers’ allegedly wrongful acts in selling the policies were therefore acts performed as Assurant’s agents. The Ombudsman had compulsory jurisdiction to determine the four complaints. The appeal was dismissed for reasons differing from those of the High Court.

1. Court of Appeal (Civil Division): In [2023] EWCA Civ 1049, the court dismissed Assurant’s appeal. It held that the High Court had applied the wrong standard to the contractual question, but concluded on its own construction that the retailers were Assurant’s agents and that the Ombudsman had jurisdiction.

2. High Court, Administrative Court: Collins Rice J dismissed the judicial review claim in [2022] EWHC 2766 (Admin). She reviewed the Ombudsman’s agency determination on conventional public law grounds and found no error of law or irrationality.

3. Financial Ombudsman Service: An Ombudsman decided on 26 October 2021 that the four complaints fell within the compulsory jurisdiction because the retailers had acted as Assurant’s agents. The merits remained undetermined.