Lahore High Court Rules Consumer Courts Cannot Hear Insurance Complaints

LAHORE: The Lahore High Court has determined that consumer courts do not have the authority to address complaints from policyholders against insurance companies. This ruling was issued by Justice Jawad Hassan in response to a petition filed by the United Insurance Company of Pakistan Limited, challenging a decision made by the District Consumer Court in Bhakkar.

The District Consumer Court had previously dismissed an objection from the insurance firm regarding the validity of a complaint lodged by a policyholder, asserting that the case was maintainable due to its basis in the provision of insurance services. However, Justice Hassan’s ruling overturned this decision, highlighting that the lower court failed to adequately consider the relevant legal framework, particularly Section 122 of the Insurance Ordinance, 2000.

Justice Hassan pointed out that Section 122(3) of the Ordinance explicitly prohibits any court other than a specialized tribunal from exercising jurisdiction over claims made by policyholders against insurance companies concerning insurance policies. This ruling underscores the limitations of consumer courts in handling such disputes and raises questions about the accessibility of justice for policyholders.

As a result of this ruling, policyholders may need to seek recourse through specialized tribunals rather than consumer courts, potentially complicating the process of addressing grievances against insurance providers. Legal experts anticipate that this decision could lead to a reevaluation of how insurance disputes are managed in Pakistan.