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Case Details

Case Details
National ID [2015] IEHC 557
Member State Ireland
Common Name link
Decision type Other
Decision date 25/08/2015
Court High Court
Subject
Plaintiff Untoy
Defendant GE Capital Woodchester Finance Limited & anor
Keywords insurance contract, insurance policy, unfair commercial practices

Unfair Commercial Practices Directive, Chapter 2, Section 1

Insurance intermediaries owe and are owed a duty of disclosure by their customers. High Court finds the District Court judge erred in determining that a lending institution was beyond reproach in not disclosing to a borrower that he was being charged commission on payment protection insurance that he had taken out for three loans, holding that the lending institution was in breach of relevant legislation by not adequately informing the borrower of all of the transaction details.

The judge concluded that where entities are related and one is paying commission to the other, this information should be given to the consumer as they may not realise that they are essentially paying commission “on the double” to related entities. Significantly, the court went on to state that such conduct was capable of amounting to a “misleading commercial practice” under the Consumer Protection Act 2007.
This case involved an appeal by way of case stated brought by the Plaintiff who claimed the Defendant mis-sold payment protection insurance products to him that were of no benefit to him.

The High Court considered whether the Defendant was obliged to ensure that the policies sold to the Plaintiff were suitable to his circumstances. It also considered the legal consequences of failing to inform the Plaintiff of the relationship between the Defendant and the underwriter and of the non-disclosure of the commission to be earned by the Defendant.
Do insurance intermediaries owe a duty of disclosure to their customers? Can this conduct amount to a “misleading commercial practice” under the Consumer Protection Act 2007?
It was held that where entities are related and one is paying commission to the other, this information should be given to the consumer as they may not realise that they are paying commission “on the double” to linked entities. It was also noted that this was capable of amounting to a breach of the Consumer Protection Act 2007 under the heading of "misleading commercial practices".
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The High Court held that the trial judge erred in holding that the Defendant was not at fault for failing to disclose the relationship between the companies and that commission was not relevant to the case.