Further Judicial Review of an Ombudsman's decision...volcanic ash ruled to be "weather"

[AuntieP]

An Insurance Company (Europ Assistance) has declined to pay out on a claim resulting from the Icelandic volcano eruption and subsequent disruption of aviation by the dust cloud. The claimant went to FOS who said that the volcanic dust cloud was "weather" and told the firm to pay the claim. The firm asked for a JR of the decision.

 

The Case was initially handled by an adjudicator (who looked up "weather" in Chambers dictionary), but ended up with Caroline Mitchell who is lead ombudsman.

 

This is a hugely important issue as it may impact on all travel insurance, and indeed other insurance policies in the future.

 

It may be that the case has such important implications for the insurance industry, that the ombudsman should have invoked the "test case" procedure, and the firm requested this, however Ms Mitchell specifically decided not to do so and she explains why in her decision. Ms Mitchell therefore issued a standard FOS Ombudsman "decision" which is binding on the firm, (if the claimant accepts the decision). It look as though Europ Assistance have reacted to this by asking for a Judicial Review. It is not obvious (to me) whether the JR is of the failure to use the test case procedure, or the assessment of volcanic dust at "weather", or both.

 

The JR judges will have to consider the effect of their ruling on all manner of disturbances in the air and elsewhere which might or might not be considerered to be "weather".

 

• Volcanic dust clouds
  
• Radioactive emissions and dust clouds from nuclear accidents, (the recent Japanese nuclear accident cause huge air travel disruption)
  
• Desert sand storms where dust reduces visibility and can close airports
  
• Flocks of birds (borne along on the wind just like dust). Birds can close airport runways
  
• Smoke from fires near airports, blown on the wind, reducing visibility
  

and so on. This could run and run !

 

Ms Mitchell's discussion of the issues in her decision makes very interesting reading. It is not often we get the chance to read an actual verbatim 'decision', (though Natalie Ceeney recently said that they would all be published in the future).

 

The above clips are taken from the FOS problems website

http://www.financial-ombudsman-problems.co.uk

 

Caroline Mitchell's actual ruling (the actual ombudsman's decision)

http://www.financial-ombudsman.org.uk/publications/technical_notes/travel-insurance-ash-mar11.pdf

 

FOS letter to claimants, whose cases will now be delayed

http://www.financial-ombudsman.org.uk/publications/technical_notes/ash-JR-update-Jul11.pdf

 

FOS Technical Resource page regarding Insurance matters

http://www.financial-ombudsman.org.uk/publications/technical_notes/travel-insurance.htm#fd