Colm O’Donoghue (Represented by the Equality Authority) V An Post Ltd. t/a One Direct
Mr. Colm O’Donoghue referred a claim to the Director of Equality Investigations under the Equal Status Act 2000. In accordance with her powers under section 75 of the Employment Equality Act, the Director delegated the case to me, Bernadette Treanor, an Equality Officer, for investigation, hearing and decision and for the exercise of other relevant functions of the Director under Part III of the Equal Status Act.
Preliminary Issue – Agency
This case relates to an allegedly discriminatory refusal to quote the complainant for motor insurance on the age ground, which took place on 13/11/2000. One Direct has argued, as a preliminary issue, that their refusal or inability to quote the complainant for car insurance cannot be discriminatory as it was merely an agent fulfilling the terms of its contract with Hibernian Insurance Ltd. At this point I am not addressing the substantive issue, i.e. whether or not the refusal was discriminatory, which is defended. I am deciding on this preliminary agency issue on the basis that the refusal of one Direct to quote is alleged to be discriminatory.
Submission from One Direct, respondent.
Background
- An Post Ltd. trading as one Direct is a multi agency insurance intermediary. One Direct is not an insurer or an insurance broker. Among the products offered via One Direct is motor insurance underwritten by Hibernian Insurance Ltd. The only motor insurance products offered via One Direct are those underwritten by Hibernian Insurance Ltd.
- The relationship allowing One Direct to act as intermediary for Hibernian Insurance Ltd. is based on a contract between them. One Direct’s duties to Hibernian Insurance Ltd. are, inter alia, to interface with potential insureds and offer them quotations on behalf of Hibernian Insurance Ltd.
- In accordance with their contract One Direct may issue quotations on behalf of Hibernian Insurance Ltd. in respect of preferred risks. Quotations to persons under 25 are not included as a preferred risk in respect of a full policy, but are permitted in the case of potential named drivers. One Direct submit that they had no authorisation to deviate from the limitations of the contract.
Legal Arguments in respect of agency issue
1. One Direct submit that S42(2) applies in this situation because One Direct were acting as agents for Hibernian Insurance Ltd, and since they were complying with their contractual duties to Hibernian Insurance Ltd., any liability arising should be Hibernian Insurance Ltd.’s alone. They were unable to offer, and indeed prohibited from offering, Mr. O'Donoghue a quotation. Mr. O'Donoghue was advised to contact Hibernian Insurance Ltd. directly, which he subsequently did.
2. One Direct submit that their refusal to provide a quotation was not discrimination within the meaning of S3 of the Act because that refusal arose from the fact that there were no services suitable to the complainant which One Direct was entitled to lawfully provide under their contract with their underwriters and not from any of the grounds set out in S3.
3. Submissions have been made by Hibernian Insurance Ltd. stating that their decision not to offer insurance to persons under 25 is based on actuarial and statistical data in addition to commercial and underwriting factors. Accordingly, they maintain their decision is not discriminatory by virtue of Section 5(2)(d) of the Equal Status Act, 2000. One Direct join in and support those submissions.
4. One Direct submit that, as they were complying with their contractual obligations, any redress awarded against them would be inappropriate since any discrimination contrary to the Act arises from Hibernian’s actions and can only be remedied by a suitable order against Hibernian Insurance Ltd.
5. One Direct are not arguing that there must be a requirement of privity of contract as a prerequisite to liability, since what the claimant complains of is the fact that a contract was not entered into between himself and Hibernian Insurance Ltd.
6. One Direct cannot owe an independent duty of care to the claimant where One Direct does not have the power to provide that which the claimant seeks, being insurance cover. It is not within One Direct’s capacity to provide insurance cover other than that offered by Hibernian Insurance Ltd. This is acknowledged by Bolger and Kimber “Sex Discrimination Law”, Roundhall, Sweet and Maxwell, Dublin 2000 where the authors quote at p.442 from the UK text Bourn and Whitmore, “Race & Sex Discrimination”, who argue that:
“There is a distinction …… between what is there to be provided and the circumstances of the provision itself. The [UK] legislation is aimed at discrimination relating to the latter, not the former.”
Consequently there can clearly be no discrimination or finding of discrimination or order to remedy a discrimination in relation to a service that One Direct cannot or does not provide.
7. One Direct submit that the Director is not empowered by Section 27 to order One Direct to enter contractual relations with other underwriters other than Hibernian Insurance Ltd. The claimant’s position is that One Direct has discriminated against him by virtue of the fact that One Direct offers Hibernian Insurance Ltd. products only. The corollary of this approach is to accept that One Direct is under an obligation, as an insurance intermediary, to provide other insurance services and that the Act can require compensation to be paid by virtue of One Direct’s failure to do so or can require One Direct to enter into agreement with other principals to ensure that insurance other than on the terms prescribed by Hibernian Insurance Ltd. is available.
Arguments submitted on behalf of the claimant.
- It is submitted that even in contract law the fact that a respondent is an agent does notof itself preclude liability attaching. Liability will be determined by various matters including the construction of the contract, relevant circumstances etc.
- It is submitted that the respondent owed an independent duty of care to the claimant in its dealings with him, pursuant to Section 5 of the Equal Status Act, 2000, not to subject him to unlawful discriminatory treatment. That the principal (Hibernian Insurance Ltd.) will be liable for the statutory or common law torts of the respondent as agent does not preclude liability attaching separately to the agent. There is no basis in law on which the respondent may avoid liability for a tort, statutory or otherwise, on the ground of agency per se.
- Subsection 42(2) reiterates the common law position in respect of the vicarious liability of a principal for the acts of its agent. The subsection goes no further than that and does not provide for any ground on which an agent can avoid liability.
- The respondent’s contract with Hibernian Insurance Ltd. cannot be an adequate defence since there is no provision for such an exemption in the Act.
- The Act prohibits discrimination in the provision of services which clearly includes the refusal of a service.
- The question of an appropriate remedy is a matter for the Equality Tribunal.
- The claimant’s submission is that the respondent, if it chooses to provide a service, should do so on a non-discriminatory basis. It is accepted that it is part of the claimant’s case that discrimination arises from choices made by Hibernian Insurance Ltd. and it is accepted that this can be remedied by an order against Hibernian Insurance Ltd. However, it is submitted that discrimination also arises from the choices made by the respondent as to the service it would provide.
Conclusions of the Equality Officer – Agency Issue
The question which must be considered at this stage is whether or not any potential liability arises for One Direct who were acting as an agent for Hibernian Insurance Ltd., and were bound by a contract. One Direct submit that Section 42(2) provides for the liability being that of Hibernian Insurance Ltd. only, and that because of their agency arrangement they should not be considered a respondent and are not answerable under the Act.
In section 2 of the Equal Status Act 2000, dealing with interpretation, ‘service’means a service or facility of any nature which is available to the public generally or a section of the public and this includes facilities for insurance. I am satisfied that One Direct were making insurance facilities available to the public at the time of the incident and as such were providing a service in terms of the Act.
It is not contested that One Direct chose not to quote the complainant for insurance. It is argued that it was not because of the complainant’s age but because of the contract that this refusal arose. The reason for the refusal is a matter to be addressed during the consideration of the substantive issue. However, in refusing to quote the complainant One Direct was restricting the provision of a service, even if it did so as agent for Hibernian Insurance Ltd.
Section 42(2) and Liability
Section 42(2) states
“(2) Anything done by a person as agent for another person, with the authority (whether express or implied and whether precedent or subsequent) of that other person shall, in any proceedings brought under this Act, be treated for the purposes of this Act as done also by that other person.”
In the first instance I must assess whether or not One Direct was an agent, and whether they had the authority to act as they did.
The contract between Hibernian Insurance Company Ltd. and One Direct, called the Agreement, clearly indicates that both parties to the contract consider One Direct as an agent of Hibernian Insurance Ltd. as contained
- in the recital B of the contract:
Hibernian [Hibernian Insurance Company Ltd.] wishes APD [An post Direct Ltd.] (which is a wholly owned subsidiary of An Post) to act as Hibernian’s agent to sell Hibernian’s motor and home insurance in the Republic of Ireland.
- In Clause 2.1
Hibernian hereby appoints APD with effect from the Commencement Date on the terms and subject to the conditions contained in this Agreement as Hibernian’s non-exclusive agent to sell Hibernian’s Policies in the Republic of Ireland, and APD hereby confirms its acceptance of such appointment on such terms and conditions.
I am satisfied that One Direct was an agent of Hibernian Insurance Ltd. for the purposes of subsection 42(2).
The contract details Hibernian Insurance Ltd.’s preferred risks and as the complainant did not match the criteria in order to be considered within the scope of preferred risks, he was not eligible for a quote. One Direct submit that not only did they have the authority to act as they did, they were required to act in that manner by the contract. This authority was included in the agency contract at clause 3.1 where it states that APD:
will subject to clause 2.3 issue quotations to potential Insureds on behalf of Hibernian in respect of preferred risks and any other special category of Risks specifically authorised in writing in advance by a duly authorised representative of Hibernian with APD.
This is underlined by Hibernian Insurance Ltd.’s own subsequent refusal to quote the complainant for insurance. I find that One Direct had the authority of Hibernian Insurance Ltd. to act as they did in respect of the incident complained of.
In my view subsection 42(2), in relation to this case, might be read as anything done by One Direct as agent for Hibernian Insurance Company Ltd. with the authority of Hibernian Insurance Company Ltd. shall be treated for the purposes of this Act as done also by Hibernian Insurance Company Ltd. The important word, for the purposes of this preliminary issue is ‘also’. While this draws Hibernian Insurance Company Ltd. into any potential liability in respect of the One Direct refusal, in addition to One Direct, it does not remove any potential liability from One Direct.
I am satisfied that the wording of section 42 (2) is clear and that it is not necessary, nor indeed appropriate, to resort to common law rules. I find therefore that section 42(2) does not remove any potential liability from One Direct in this case.
Redress and Liability
One Direct submit that one possible form of redress that could be ordered by an Equality Officer might include the requirement to insure the complainant. Since this would not have been possible for them to provide, at least while the complainant was under 25 years of age, they submit that this removes liability from them in relation to the allegation of discrimination. However, redress is only considered after a prima facie case has been established and a respondent has failed to rebut it. In addition, it is a matter for the Director to determine what redress is appropriate or the Equality Officer where the investigation and decision of a case has been delegated. Liability is not determined by whatever redress may be ordered by the Equality Officer. I find that the possibility of a potentially adverse form of redress being awarded does not remove liability.
I am satisfied that the remaining arguments submitted by One Direct relate to consideration of the substantive issue. These arguments will be considered at the appropriate point.
Decision DEC-S2005-053
I find that the fact that One Direct were acting as an agent for Hibernian Insurance Company Ltd., bound by a contract, does not remove liability from them as a respondent in this case. The substantive issue of discriminatory treatment will be considered in due course.
Bernadette Treanor
Equality Officer
23/6/2005