Solicitors apply not to represent Setanta Insurance clients

Solicitors apply not to represent Setanta Insurance clients

By Ann O'Loughlin

A number of solicitors representing motorists insured by collapsed insurer Setanta have applied to the High Court to cease representing their clients.

The president of the High Court was told on Monday the applications have potential implications for hundreds of cases in the High and Circuit Court lists being brought against motorists who were insured by Maltese registered Setanta, which sold policies exclusively here before its collapse in 2014.

Because a number of such personal injury cases may get hearing dates shortly for forthcoming High Court sittings in Galway, Mr Justice Peter Kelly agreed to list the matter on Wednesday for directions as to how such cases should proceed.

He was told by Declan McGrath SC, for the official liquidator of Setanta, a number of solicitors representing defendants insured by Setanta want to come off record in the context of the expected shortfall between the company's assets and the amount of claims.

Because solicitors are effectively defending the cases on behalf of the insurer, that raises issues for the defendant motorists, some of whom have consulted their own solicitors, the court heard.

The situation could have consequences for the State's Insurance Compensation Fund, it was also stated. As a result of a Supreme Court decision last May, the fund is liable for a maximum 65% of any damages awarded in claims against persons insured by Setanta. The insurer's liquidator has estimated the cost of an estimated 1,750 claims could be €90m.

Mr Justice Kelly also separately heard, in a letter of January 3 last, the liquidator of Setanta had said, based on actuarial analysis of Setanta reserves in June 2017, it appeared unlikely the company would be able to meet more than 22 per cent of insurance claims out of the liquidation proceeds but the situation was not finalised.

Mr McGrath stressed he did not wish to overstate the situation arising from the applications by defendant solicitors to come off record. There were some 350 cases concerning Setanta in the High Court list but not all of those were likely to be affected and the liquidator had been seeking to settle cases. There are also a considerable number of cases in the Circuit Court lists.

On being told some plaintiffs have opposed any adjournment of their cases, the judge said, if some plaintiffs decided their cases should proceed with a view to getting 65 per cent of their claim, that was a decision they were entitled to take.

He had sympathy for people who took out valid insurance policies with an insurer who collapsed but his "greatest sympathy" was for those injured and he would be "loathe" to give directions which might prevent plaintiffs going on with their cases. He directed plaintiffs be notified of the directions application.

Separately, in a case in which a teenage boy had in 2014 been awarded €30,000 damages against a driver insured by Setanta, the judge ordered the driver should himself now pay the balance outstanding on that award to the boy.

Some €18,000 had so far been paid to the boy by the Insurance Compensation Fund to reflect 65% of the Setanta debt and lawyers for the defendant asked that payment of the balance should await final distribution of funds in the Setanta liquidation.

He was told a letter of January 3 last from the Setanta liquidator had stated application could be made to the ICF and the shortfall to the boy would be admitted as a claim in the liquidation. While the liquidator could not at this point say how much would be available for distribution to creditors, it appeared unlikely the company would be able to meet more than 22% of insurance claims out of the liquidation proceeds, the letter said.

Refusing to adjourn payment of the balance until the situation at Setanta is clarified, the judge said, while it was harsh to seek to have an insured person personally compensate an injured person, it was "less harsh" than denying the boy his compensation.

He made orders allowing the boy execute the balance of the award against the insured man as the boy had been "waiting long enough".

Had the insured attended court, he may have been able to make a case as to what form of order the court should make, the judge added.

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