The High Court has overturned a decision of the Financial Services Ombudsman that insurance company Quinn Direct must refund "administration" charges imposed on all affected customers over a six-year period for transferring insurance from one vehicle to another.

Ms Justice Mary Finlay Geoghegan yesterday ruled that ombudsman Joe Meade had no power to issue such a general direction in circumstances where only one customer had formally complained.

She found the ombudsman's power was confined, in this particular case, to directing Quinn Direct to refund only the particular customer who had complained that he had been charged the €25 administrative charge without any notification in policy documents that such a charge would be applied.

However, the judge stressed that, in other cases, it was open to a group of customers to make complaints.

If those complaints were upheld by the ombudsman, then it was open to him to make a direction relating to all those who made the complaint, she said.

She also noted that the ombudsman has powers to issue a direction to a financial service provider requiring it to change a practice in the future in a way which, she said, would normally affect multiple consumers.

However, she said, that issue did not arise in the case of Quinn Direct as, since the complaint was made and upheld, it had notified policyholders in a 2006 policy document that an administrative fee would be charged on transferring insurance to another vehicle.

Quinn Direct initiated the court action after the Ombudsman's decision of April 2nd, 2007 directing the company to return €25 "administration charges" imposed on consumers who transferred motor insurance from one vehicle to another.

Consumers who had paid such charges in the six years prior to his decision should be refunded that money within three months, he directed.

Mr Meade issued the general direction after dealing with a July 2006 complaint by a man that Quinn Direct had overcharged him for a motor insurance policy, had charged him administration charges for transferring insurance from one vehicle to another and had also charged him after he cancelled his insurance policy with the firm.

Mr Meade dismissed the complaints of overcharging of policy and of charging for cancellation of insurance. However, he upheld the complaint about the €25 administration charge and directed Quinn Direct to refund the complainant €50.

Quinn Direct accepted the Ombudsman's direction was properly given in relation to the particular complainant and, although it disagreed with the €50 amount of the refund, agreed to pay that sum.