Regulation  

Fos “ignored” laws of Northern Ireland

Adrian McCall, a Warrington-based structural engineer, claimed that FOS willfully ignored Northern Irish law and the terms of his Aviva buildings insurance when it rejected his complaint against the insurer last year.

Mr McCall alleged that Fos colluded with Aviva to force a low settlement for the devastation caused by a 30-tonne earth mover on Mr McCall’s previous home in Northern Ireland in 2005.

Mr McCall was selling his home when it was hit unlawfully by the digger, employed by a property developer who was interested in buying the property but did not have planning permission.

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Financial Adviser has previously reported that Mr McCall’s complaint was rejected by Aviva, despite photographic proof and independent assessments of the damage. When he complained to Fos, the adjudicator ruled that, under English Law, risk passed from seller to the buyer at exchange of contracts and Aviva did not hold liability.

Northern Irish law dictates, by comparison, that the seller still retains risk for the property until the completion of the buying process. A copy of Aviva’s terms and contracts also stipulates that the insurer’s liability for the home ends “when your insurable interest in the home ends, which is normally when you vacate the home following completion and you hand over your keys to the buyer”.

In documents seen by Financial Adviser, internal staff at Aviva reported conversations with Sarah Holmes, an employee of Fos, who said the client should “play ball” and accept Aviva’s offer of £10,000.

The damage caused by the digger has since been independently valued at more than £200,000, and Mr McCall has suceeded in persuading Aviva to pay £189,000.

The documents, obtained after Mr McCall made a Freedom of Information Request to the Ombudsman, stated: “I spoke to Sarah Homes at the Fos yesterday afternoon...she is happy with what we’re trying to do.

“He [the client] seems to think she can get involved but...she thinks it is with him to play ball.”

Another transcipt stated: “I have gone through the reasons why we have done this and she is happy with our response. She does not feel the customer is doing himself any favours.”

Fos has also refused to order redress from based on the property’s mortgage and costs incurred by Mr McCall during his nine-year battle against Aviva, saying Mr McCall should pursue the case through the courts.

A spokesman for Aviva said: “In 2004 Mr and Mrs McCall advised that a digger had caused damage to their property but that rather than make an insurance claim they would instead be pursuing the developer for redress.

“We were then contacted three years after the event when Mr and Mrs McCall wanted to make a claim for impact damage and subsidence caused by a diverted river. Initial investigations concluded the impact damage was minimal and there was not considered to have been any movement in the property.