Successfully negotiating claims since 1867
Our client has a holiday home overseas, insured with a UK insurer. The policy carries a very large five-figure excess for any damage caused by earthquake or volcanic eruption. The house was damaged by one of these over an extended period of time. The insurer applied multiple excesses, a severe reduction of the figure payable. Our Contentious Claims Division took the case on.
We made a complaint. It had three points of appeal, success in any one of which would have defeated the insurer’s action. The first was scientific evidence from a respected and authoritative international body indicating that the continuum of damage – with, admittedly, some pauses – was a natural unbroken sequence of incidents without any intervening cause. In other words, one event.
Our second point was that, although it was admitted that additional damage had been caused on different dates, the client’s construction professionals – surveyors and engineers – testified that all the work eventually done had been necessitated by the initial hit and further damage did not increase the costs at all. Without costs, further excesses had no application.
Finally, the wording of the policy was ambiguous on the application of excesses to “any damage” without further qualification, time definitions or other clarification and as such under the Consumer Rights Act (which we have commented on elsewhere on this site) had to be interpreted in the client’s favour. That was a very powerful legal point.
The complaint went through all the usual procedures and insurers maintained their position. The first assessment in the FOS agreed with the insurer. As did, eventually, the adjudicating ombudsman in the final decision. It was noteworthy that the ombudsman declined to consider our second point fully and peremptorily dismissed the third. We rejected the decision and helped the client to formulate a County Court claim as a litigant in person.
The initial response from the insurer’s solicitors was a risibly low why-don’t-you-go-away offer that the client refused. Shortly before the final filing date for the defence – for which the client had agreed an extension – a new, very much higher offer was made on a commercial basis. It was clear to us and the client that the insurer had had advice to settle at almost any price as the claim was indefensible and the insurer’s exposure to further costs would be wasted money. After negotiation the claim was settled at almost 95% of the figure on the face of the Claim Form.
We find it disappointing that legal action should have been necessary because of a poor decision by the ombudsman ignoring – not just expressing an opinion on, but ignoring completely – essential facts of evidence and matters of law. Perhaps we can put it down to the undue pressures the FOS is currently working under. Perseverance is a Thompson and Bryan watchword and it paid off.