The High Court is set to consider whether a party who sought to notify a claim under a D&O policy was a “consumer” and therefore able to bring a complaint under the Financial Ombudsman Service.

The court has granted an application for leave to bring judicial review proceedings against the Financial Ombudsman Service. The applicant insurance broker sought permission to challenge a decision by FOS that it had jurisdiction to hear a complaint relating to a failure to notify a claim under a D&O policy. An application made on paper in September last year had previously been refused.

The FOS accepted jurisdiction to hear a complaint by a Mr Lockner against the insurance broker about an alleged failure to notify Mr Lockner’s claim under a D&O policy. The insurance broker has challenged FOS’s decision that it had jurisdiction and the issue will turn on whether Mr Lockner was a “consumer” and therefore eligible to bring a complaint.

The judicial review proceedings will be heard by the Administrative Court which will consider:

  • What test it must apply when considering the jurisdiction question. Is it a matter of law for the court to decide or is the only question whether the decision taken by FOS was so unreasonable that no reasonable person acting reasonably could have made it (the test in Associated Provincial Picture Houses v Wednesbury Corporation (1948)).

If the court gets beyond the first issue:

  • At what point in time should the court assess whether the complainant was acting as a consumer or not?
  • Whether a D&O policy can be considered a consumer transaction.

The judicial review hearing has been listed for 7 November 2014. 


Insurers should take note. D&O policies respond to Wrongful Acts committed by directors (Insured Persons) in their Insured capacity, which means acting as a director and not in some other personal capacity. It is therefore extremely difficult to see how it can be said that a director claiming coverage under a D&O policy can ever be said to be acting as a consumer given that by its very nature the claim against him/her can only arise from their professional capacity. It strikes us that the FOS is the wrong jurisdiction for such a complaint to be dealt with.

Further reading: R (on the application of Bluefin Insurance Services Ltd) v Financial Ombudsman Service Ltd [2014] EWHC 1427 (Admin)