The Equality Tribunal
3 Clonmel Street
Dublin 2
Phone: 353-1-4774100
Fax: 353-1-4774141
E-mail: info@equalitytribunal.ie
Website:www.equalitytribunal.ie
Equal Status Acts, 2000 to 2008
Equality Officer Decision
DEC-S2011-016
Patrick Mongan
[Represented by Mr Michael Binchy B.L. instructed by John Sherlock & Co. Solicitors]
-v-
FBD Insurance plc
[Represented by Claffey Gannon & Co. Solicitors]
File Ref: ES/2009/035
Date of Issue: 19 April 2011
Keywords: Equal Status - Membership of Traveller community - inability to read or write - cancellation of car insurance- direct and indirect discrimination - non-declaration of pending criminal prosecution - Burden of proof - Equal Status Acts 2000 to 2008, ss. 3 (1) (a), 3 (1) (c), 3 (2) (i), 5 (1). 25 (1) and 38A.
1. This complaint was referred to the Director of the Equality Tribunal on 23 March 2009 under the Equal Status Acts, 2000-2008 (hereinafter "the Acts"). On 16 December 2009 the Tribunal received a written submission from the complainant. A responding submission was received from the respondent on 3 February 2010. As required by section 25(1) of the Acts and as part of my investigation, an oral hearing was held on 13 January 2011 and both parties were in attendance.
2. Dispute
This dispute concerns a claim by the complainant, Mr Patrick Mongan (hereinafter "the complainant") that he was discriminated against, within the meaning of section 3 (1) (a) and section 3 (1) (c) of the Acts by FBD Insurance plc (hereinafter "the respondent") on the Traveller community ground in terms of section 3(2) (i) of the Acts by having his motor insurance policy cancelled, contrary to section 5(1) of the Acts. Claims of discrimination by association and victimisation were not pursued at the oral hearing.
3. The facts
The complainant is a member of the Traveller community. He cannot read or write. He first became a customer of FBD Insurance in 2005 when he took out commercial van insurance. In 2007 he transferred his insurance policy to another van. On 20 July 2008 the complainant was involved in a public order incident outside a pub in Lusk Co. Dublin for which he was arrested and charged that night. He was released on bail to attend the District Court in Balbriggan Co. Dublin on 4 September 2008. In August 2008 the complainant bought a second-hand passenger car, a Renault Laguna. He presented himself at the main FBD offices on the Naas Road, Dublin, where he spoke to a woman at the reception area. He wished to transfer his previous van insurance to his new car. He was told that that was impossible. Instead he was advised to take out a new insurance contract on the car, dated 29 August 2008. The woman he dealt with asked him had anything changed, had he had an accident since his previous application. He answered no. The policy had the following standard condition:
"It is understood that no driver has been involved in an accident of loss in the last five years, or has been convicted of any driving or criminal offence or has any prosecutions pending."
On 4 September 2008 the complainant appeared before Balbriggan District Court where he was given the benefit of the Probation Act.
On 17 October 2008 the complainant parked his car in a car park near licensed premises in Finglas, Dublin. When he returned to retrieve it the following morning it was gone. He reported the theft to An Garda Siochana and to the respondent by phone. The employee of the respondent who took his call (Ms A) of the New Claims Section formed the opinion that there may be potential fraud about the claim. She recorded her suspicions as follows in a "Claim Notification Form" in a section titled "Claim Notification Next Action Notes" and in an e-mail to the underwriting department of the respondent, on 20 October 2008, as follows:
"Insured was very undecisive (sic.) and uncertain about the area where he left his car. He also said he had the car six months or since its been on cover here which is only since the 29th of August and then argued that he wants full value for it since its brand new. Also he said he got it off his brother but did not have contact details for him and could say where he got him (sic.) Was very undecisive about times. He was unsure if he had alarm or not but has immobiliser plus he said there is only one key a cardkey which he still has in his possession. Also there is a lot of presie (sic.) notes on his policy for lapse/cancellation/direct debit problems plus there is an injury on insurance link for Ms M. at the same address."
Ms A was prompted in her conversation by preset questions displayed on her computer screen. At the end of the call she completed what is known as a risk indicator sheet which gave a weighting to a large number of various risk factors. The relevant indicators with their weighting in this case were:
Indicator Weighting
Recent policy inception/Cancellation/substitution 3
Difficulty in obtaining facts circumstances 6
Handlers intuition 15
Vehicle purchased within the last year & previous owner cannot be located
(buy & sell) cash purchase 3
The total points were 27. The minimum number to trigger a referral for decision for further investigation is 15. So "handlers intuition" which is the gut feeling of the employee who received the call is given sufficient weight to be enough on its own to generate a referral.
A Mr B carried out an investigation of the claim. He found no evidence of fraud. During his inquiries he was informed by a source (not An Garda Siochana) of the complainant's summons before Balbriggan District Court. The respondent wrote to the complainant on 3 December 2008, in the following terms:
"Dear Sir
We understand that at the inception of the Policy you may have had a prosecution pending which may have resulted in motoring/criminal offences.
Please let us have full details of same, together with an explanation as to why this material fact was not disclosed to us.
If we do not hear from you within 10 days from the date of this letter, we will proceed to cancel the above numbered policy.
Yours faithfully
Underwriting Department."
The complainant consulted his solicitor and swore the following in an affidavit on 19 December 2008:
I say that I was involved in an incident outside Murtagh's Pub, Lusk on the 20th July 2008 following a social gathering.
I further state that I was arrested for intoxication in a public place and subsequently attended court on the 4th of September 2008 at Balbriggan District Court. The judge stated that I was never in trouble before that he would apply the Probation Act in this case.
To the best of my knowledge and through searches of the Local Garda Station I have no further criminal record.
I state that I was not aware that it was necessary to inform my insurance company of this incident as it did not relate in any way to my Motor vehicle or to a motoring offence.
Notwithstanding this explanation, the respondent wrote to the complainant on 9 January 2009 as follows:
"It has been brought to our attention that information declared by you in your Proposal form is incorrect. You did not declare that you had a Prosecution pending for a criminal offence on 20 July 2008. This represents non-disclosure of a material fact on your behalf. In the circumstances, we are treating the Policy as null and void ab initio."
In response to an inquiry from the complainant's representative, the respondent advised on 18 February 2009 that:
"The Policy has been treated as null and void ab initio due to the fact Mr Mongan signed a declaration that he had not suppressed or misstated any material fact and that he had not been convicted of any criminal offence or had prosecutions pending. As this is not the case, we would consider this a material fact and had we been aware of this, we would not have provided a quotation and in the circumstances, we regard the above Policy as null and void ab initio from inception."
4. Summary of complainant's case against the Respondent.
The complainant has two elements to his case, indirect and direct discrimination.
Element 1 - indirect discrimination.
The complainant has a low level of literacy. He was educated to the age of 4 or 5. He was not in a position to read or write. He is a member of the Traveller community. Members of the Traveller community have a significantly higher risk of low literacy than settled persons. The respondent indirectly discriminated against the complainant on the Traveller community ground by failing to read out the contents of the Proposal Form and, in particular, by not explaining to him the condition on pending prosecutions which led to the cancellation even though the complainant informed the respondent's employee that he could not read or write.
Element 2 - direct discrimination.
The complainant believes that because he is a Traveller the respondent treated him less favourably than they would treat another person in exercising their discretion to cancel his insurance contract. The complainant does not believe that the respondent would ordinarily cancel an insurance contract for prosecution for a minor public order offence, particularly where the Probation Act had been applied.
The complainant also believes that the process followed by the respondent leading up to the taking of the decision to cancel his contract was tainted by discrimination. The decision to identify his claim as a potentially fraudulent one was taken by Ms A based on her "handler's intuition". If it was not for Ms A's exercise of her discretion to refer his case for fraud investigation, an allegation that was proved to be unfounded, the fact of the complainant's prosecution for a minor public order offence would not have emerged, and his contract would not have been cancelled. The complainant deplored that Ms A's motivation for taking the decision she did could not be tested because she was not present at the hearing, although she was still employed by the respondent in the same capacity.
5. Summary of respondent's case.
The contract of insurance is one of the utmost good faith (uberrimae fidei). Non disclosure of a material fact renders an insurance policy voidable ab initio at the instance of the insurance company. There is plenty of decided case law on this which supports the respondent's actions. The complainant did not disclose a material fact and they cancelled his insurance, as they would do so in respect of everyone in those circumstances, irrespective of background. The fact that the complainant was a Traveller was not known to them and did not influence their decisions.
As regards the claim of indirect discrimination on the Traveller ground because of not making allowances for a customer's potential illiteracy, the respondent states that it is their policy to read out the proposal form in detail, every single question and declaration, to anyone who identifies themselves as having problems understanding the form. The respondents deny that the complainant disclosed his illiteracy when taking out the insurance. They argue that it would be discriminatory to assume that any client who happened to be a Traveller was illiterate. In any event, the respondents claim that it is their practice to ask all persons taking out insurance about prosecutions pending or otherwise.
6. Conclusions of the Director
In reaching my decision, I have taken into account all of the submissions, written and oral, made by the parties.
I have no jurisdiction to consider whether or not the respondent complied with the terms of the insurance contract or with insurance law when they cancelled the contract.
Claim of indirect discrimination.
Indirect discrimination is defined in section 3 (1) (c) of the Acts as:-
"where an apparently neutral provision puts a person referred to in any paragraph of section 3(2) [i.e. covered by one of the discriminatory grounds] at a particular disadvantage compared with other persons, unless the provision is objectively justified by a legitimate aim and the means of achieving that aim are appropriate and necessary".
Section 3 (3A) of the Acts provides that in any proceedings statistics are admissible for the purpose of determining whether indirect discrimination has occurred.
First of all it is for the complainant to identify the apparently neutral provision which he seeks to impugn. It is then for the complainant to prove, on the balance of probabilities, that this provision puts a Traveller at a particular disadvantage compared with non-Travellers. If he succeeds in this, the burden of proof shifts to the respondent to prove that the criterion is objectively justified by a legitimate aim and that the means of achieving that aim are appropriate and necessary.
'Provision' is defined in the Acts to mean a term in a contract or a requirement, criterion, practice, regime, policy or condition affecting a person. The complainant claims that the apparently neutral provision in this case is an omission to read out the terms of the proposal form, the omission to explain the policy to any given customer to take into account the possibility that the client may be illiterate. I do not consider that there is a policy or provision on the part of the respondent not to explain the terms and conditions of their contracts. I conclude that they operate on the assumption that most clients are literate and can read the terms and conditions for themselves, but are prepared to go through the proposal form in detail for any client who informs them that they have difficulty in understanding. I do not find that there is a general provision which disadvantages those with low literacy. I conclude that there is a policy is to facilitate those with literacy problems. It may not have been applied in the complainant's case.
I found the complainant to be a credible witness. I accept his account of what transpired when he went to the Naas Road offices of the respondent. In particular, I accept that he made the respondent's employee aware of his problems with reading and writing. I think it is important to note that the complainant was an existing customer and that both the complainant and the employee who served him may not have been as painstaking in concluding the paperwork as they might have been if the complainant was a new customer. It is my conclusion that the complainant was aware of the need to divulge any accidents he was involved in and any criminal convictions, but genuinely did not understand that this obligation extended to declaring any pending prosecutions for non-motoring offences. This misinterpretation is one that might also be shared by a literate person casually reading the relevant clause:
"It is understood that no driver has been involved in an accident of loss in the last five years, or has been convicted of any driving or criminal offence or has any prosecutions pending."
On the facts of this case I do not consider therefore that the complainant was, by reason of his low literacy, put at a particular disadvantage compared with other persons. I conclude that the complainant has not proved that the respondent applies an apparently neutral provision which by reason of their greater likelihood to have low literacy level, puts members of the Traveller community at a particular disadvantage compared with other persons. Therefore his claim of indirect discrimination fails.
Claim of direct discrimination
Direct discrimination is defined in section 3 (1) (a) of the Acts as occurring where a person is treated less favourably than another person is, has been or would be treated in a comparable situation on any of the grounds specified in subsection (2) (in this Act referred to as the 'discriminatory grounds'). The complainant alleges that the respondent treated him less favourably that they would a non-Traveller in two respects:-
They cancelled his contract for non-disclosure of his pending prosecution for a minor public order offence in circumstances where they would not have cancelled the contract of a non-Traveller; and
They referred his claim for the loss through theft of his car for investigation for potential fraud, leading to the discovery of his prosecution, a subjective decision that was tainted by discrimination.
As regards 1, the respondent argues that they have a rigid policy of cancelling policies where a material fact is not disclosed in the proposal form. They apply this policy irrespective of the social background of the insured. They argue that if the complainant had disclosed at the time he signed the proposal form that he had a prosecution pending for a public order offence they would have declined cover. The reason for this is that individuals with pending prosecutions or convictions for public order offences have, in the respondent's experience, a higher risk of losses in terms of fire or damage than an individual with no such convictions or pending prosecutions. In oral evidence and cross-examination a manager from their underwriting department stated that they cancelled at least 250 policies annually for non-disclosure of a material fact. However, he had no idea how many were for non-disclosure of a pending prosecution. The only offences they would overlook if not disclosed were parking offences. The key issue was the non-disclosure of a pending prosecution. Section 38A of the Acts provides that where in any proceedings facts are established by or on behalf of a person from which it may be presumed that prohibited conduct has occurred in relation to him or her, it is for the respondent to prove the contrary. In this case the complainant has made assertions but has not established facts from which I can conclude that a prima facie case of discrimination has been made in the cancellation of his contract for non-disclosure of his pending prosecution.
As regards 2, the complainant points out that a subjective element, "handler's intuition" or "gut feeling" played a decisive role in the decision of Ms A to refer of his claim for the theft of his car for fraud investigation. Ms A did not give evidence at the hearing and was not available for cross-examination. The complainant however, in response to the question: Do you think it would have been clear to Ms A that you were a member of the Traveller community? said: "I don't know. I wouldn't think so. I don't know." The complainant has not established the basic fact that Ms A was aware of his being a Traveller. Therefore the burden of proof does not shift to the respondent and they are not required to prove that the decision to refer the claim for fraud investigation was in no sense whatsoever on the grounds that the complainant was a Traveller.
7. Decision
In accordance with section 25 of the Acts I make the following decision:
The respondent did not discriminate against the complainant within the meaning of section 3 (1) (a) and section 3 (1) (c) of the Acts on the Traveller community ground in terms of section 3(2) (i) of the Acts.
Niall McCutcheon
Director
19 March 2011