Rejected insurance claim - Ombudsman or legal action?

Discussion in 'The Financial Services Ombudsman' started by Brendan Burgess, Mar 9, 2018.

  1. Brendan Burgess

    Brendan Burgess Founder

    A friend of mine has told me that he is suing an insurance company who rejected a fire claim on his home. Damage of around €200k.

    He has instructed a firm of solicitors and junior and senior counsel. They seem to be working on a no foal, no fee basis.

    I don't know how good or bad his claim is, but I suggested that he go to the Ombudsman instead. He had not even considered it and his solicitors apparently hadn't mentioned it as an option either.

    Advantages of the Financial Services Ombudsman

    He is more likely to win his case under the FSO

    Under the Act...

    (4) The Financial Services Ombudsman is... is required to act in an informal manner and according to equity, good conscience and the substantial merits of the complaint without regard to technicality or legal form.

    A judge will decided according to the law and not equity or substantial merits, so he has a better chance of winning with the Ombudsman.

    There is a fair chance that the complaint will be settled during the mediation stage.

    Financial Services Companies do not want to be named and shamed in the FSO's annual report, so they may settle it quicker.

    He does not run the very high risk of paying the costs if he loses.

    Advantages of the courts system

    I'm struggling to think of any advantage in going to court.

    If he wins, he will recover his legal costs from the insurance company.

    Maybe the threat of expensive legal proceedings will make the insurance company settle?

    If he has a weak case, he has a better chance of winning, as a judge will give a lot less time to it than the Ombudsman and so might make a wrong decision. But against that, if his case is weak, he is likely to lose and get an award of costs against him.

    People seem to put some value on getting "their day in court".

    Disadvantages of the courts system

    The frustration of dealing with multiple court appearances and adjournments.

    Reliance of the legal profession to make your case for you. Many solicitors are incompetent and seem to enjoy dragging stuff out for years and years.

    I would argue against using no foal no fee solicitors

    Good solicitors and barristers are very likely to be too busy to take on speculative work. So if someone is doing it on this basis,they will probably not be very motivated or very good. They will end up against a good team used by the insurance company.

    I have often seen a "rock solid" case deteriorate dramatically on the steps of the court. The plaintiff comes under huge pressure from his legal team to settle. They know that if they lose,they will get nothing. But if they settle for €50k + costs, they will get paid.
  2. RETIRED2017

    RETIRED2017 Frequent Poster

    I would say the Ombudsman all the way before a no foal no fee solicitor . are you sure the junior and senior counsel and barrister are on a no foal no fee often you will find out the will require an up front fee to cover advice and expenses before going into court ,

    An Ombudsman will take time to go through all of the Information on paper all involved know the results will reflect the Information presented to back up there claim,
  3. renter45

    renter45 Registered User

    The insurance company should give a reason why his claim is being declined, if its non disclosure I doubt ombudsman or judge would overturn that.
    This isn't the fella that shed blew up and insurance declined the claim as he had tenants in the house and never advised them??
  4. cremeegg

    cremeegg Frequent Poster

    That is a brilliant post Brendan.

    This especially opened my eyes.
    It reminds me of certain employment law advisors who say that they will refund their fees to any client who follows their advice and has an award made against them. When it comes down to it their advice is "settle".

    However I dont think many other posters would get away with a comment like this.:)

    Substitute "public servants" for "solicitors" and see how it reads.
  5. todo

    todo Frequent Poster


    Which court are they going to, if its the high court then yes go the FSO route first.

    But if they plan to go to a lower court maybe the costs of losing would be allot less, then if they had to fight the FSO in the high court.