Lloyd's Maritime and Commercial Law Quarterly
THE INSURANCE OMBUDSMAN BUREAU AND JUDICIAL REVIEW
R. v. Insurance Ombudsman Bureau, ex p. Aegon Life
The judgment of the Divisional Court in R. v. Insurance Ombudsman Bureau, ex p. Aegon Life Assurance Ltd.1 represents the latest addition to a burgeoning jurisprudence on the role and scope of judicial review of administrative action in the financial services sector.2 It furnishes us with valuable guidelines as to the proper scope of judicial review and decisively resolves the previously entirely open matter of the relationship between self-regulatory Ombudsman schemes and judicial review. Two stark questions were posed for the court: (1) has the court power to subject awards made by the Insurance Ombudsman Bureau3 (IOB) to the judicial review jurisdiction?; and (2) if it has, was the determination by the IOB that Aegon (a member company of the scheme) was liable to honour a guarantee given by its general agent flawed? In the event the court did not have to grapple with the latter question, following its ruling that the IOB is not a body susceptible to judicial review.
Rose, L.J., delivered a clear and comprehensive judgment on behalf of the Divisional Court outlining the background to the creation of the IOB, its legal basis and jurisdiction. He noted the benefits accruing to insurance companies from membership of the scheme, namely “improved public relations, self-regulation as a preferred alternative to legislation, cost-effectiveness because decisions are generally made on documents without legal formalities, conciliation promoting settlements, regard for good industry practice and consistency in decisions”. He then turned to
1. [1994] The Times, 7 January. This commentary is based on the Lexis transcript of the case. For a fuller account of the facts than is available on Lexis, see: Insurance Ombudsman Bureau, The Insurance Ombudsman Bureau—Annual Report and Case Review 1993, 15 and The Times [1993] 17 December.
2. See, e.g., R. v. Panel on Takeovers and Mergers, ex p. Datafin Plc [1987] 1 Q.B. 815; Bank of Scotland v. IMRO [1989] S.L.T. 432; R. v. LAUTRO, ex p. Ross [1993] Q.B. 17; and R. v. Lloyd’s of London, ex p. Briggs
[1993] 1 Lloyd’s Rep. 176. For useful academic commentary, especially on the breakthrough in Datafin, see: P. Cane, “Self-Regulation and Judicial Review” [1987] C.J.Q. 324; J. Beatson, “Financial Services: who will regulate the regulators?” (1987) 8 Co. Law. 34; Sir Harry Woolf, “Judicial Review in the Commercial Arena” (1987) 8 Co.Law. 167; and T. Lowe, “Public Law and Self-Regulation” (1987) 8 Co. Law. 115.
3. Full accounts of the institutional structure and jurisdiction of the IOB can be found in: J. Birds, “Self-Regulation and Insurance Contracts” in F. D. Rose (ed.), New Foundations for Insurance Law (1987), Chap. 1; and A. McGee, The Financial Services Ombudsmen (1992), Chap. 2.
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