FBD challenges ombudsman over pub owner complaint

Limerick pub complained about refusal of business interruption claim

FBD has brought a High Court challenge against the Financial Services and Pensions Ombudsman's decision to investigate a pub owner's complaint over the insurer's refusal to pay out for a business interruption claim due to the Covid-19 pandemic.

FBD Insurance plc says the investigation of the complaint made to the Ombudsman by Phil Flannery's of Denmark Street Ltd in Limerick should be halted on grounds including that the same issue is the subject of High Court proceedings brought by pubs against the insurer.

Four test cases, brought by are due to commenced before the Commercial Court, the business division of the High Court , in early October.

Those actions have been taken by Dublin bars Aberken, trading as Sinnotts Bar; Hyper Trust Ltd, trading as The Leopardstown Inn and Inn on Hibernian Way Ltd trading as Lemon & Duke. A fourth action has been taken Leinster Overview Concepts Ltd, which trades as Sean's Bar, in Athlone, Co Westmeath.


FBD claims that arising out of the fact the court cases raise the same issue which is the subject of Phil Flannery’s complaint, it asked the Ombudsman to discontinue its investigation, on grounds that the courts are a more appropriate forum to determine the dispute.

However the ombudsman, FBD claims,, refused to halt its probe forcing the insurer to deal with the same issue in multiple fora.

FBD claims that this decision is not appropriate, nor proportionate and will result in the insurer having to engage in needless duplication and costs.

FBD further claims that the ombudsman’s decision to continue with its investigation is also in breach of fair procedures.

Judicial review

In judicial review proceedings against the ombudsman, FBD, represented by Remy Farrell SC and Declan McGrath SC, seeks various orders, including one quashing the decision to investigate the complaint.

It also seeks various declarations including that the ombudsman lacks jurisdiction to investigate the complaint.

If further seeks a declaration that the ombudsman has acted contrary to law by failing to discontinue the investigation of a complex complaint where the courts are a more appropriate forum.

Phil Flannery’s is a notice party to the proceedings.

Permission to bring the challenge was granted on an ex-parte basis by Ms Justice Niamh Hyland. The judge made the matter returnable to a date in October.

In relation to the test cases, the Commercial Court has previously heard that hundreds of pubs and bars are affected by the dispute, which arose after the insurer refused to provide them with cover since the pandemic resulted in the closure of pubs in mid-March.

The pub owners claim they are entitled to have their consequential losses covered by what they claim is an insurable risk.

They each claim their insurance policy with FBD contains a clause that states the pub owners will be indemnified if their premises is closed by order of the local or Government authority if there are “outbreaks of contagious or infectious diseases on the premises or within 25 miles of same.”

That interpretation is disputed by FBD, which informed the pub owners that a pandemic does not fall within the scope of the clause and that “no insured” event has occurred.

FBD considers that the closures did not occur as a result of an outbreak of disease at the premises or areas where the pubs are located. The closures occurred as a result of measures taken at a national level that involved a nationwide closure of business, it claims.