Not upheld: unfair claim decline - policy interpretation complaint against RAC Insurance Limited

Decision detail

Summary

Mr and Mrs P complained that RAC Insurance unfairly declined a legal expenses insurance claim where Mrs P sought to pursue alleged discrimination against a prospective employer, G, after being told she was unsuccessful following a job interview. RAC Insurance declined the claim on the basis that the policy only covers employment disputes where the claimant is an employee or ex-employee, and Mrs P was not an employee of G. Mr P argued that an implied verbal contract of employment had been offered and accepted during the interview, based on discussions about start dates, leave, shift patterns, and Mrs P providing identification documents. The ombudsman found that the interview notes contemporaneously recorded Mrs P as unsuccessful and that the conduct during the interview did not reasonably indicate a contract had been offered. Accordingly, the ombudsman upheld RAC Insurance's decision to decline the claim.

The Ombudsman's reasoning

The ombudsman applied the ordinary meaning of 'employee' by reference to the Employment Rights Act 1996, which requires a contract of employment. The ombudsman found that the conduct during the interview (discussing start dates, leave, shift patterns, and providing documents) did not reasonably indicate that a contract of employment had been offered, particularly given that the interview notes contemporaneously recorded Mrs P as unsuccessful. The ombudsman noted that the private legal advice obtained by Mrs P treated her application as unsuccessful rather than suggesting an offer had been made and withdrawn, supporting the conclusion that no contract existed.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website