The governing body for four-wheeled motorsport is suing an insurance company and an underwriting firm over a refusal to indemnify the drivers of two cars involved in collisions in which eight racing event spectators were injured in two separate incidents in 2015.
The Irish Motor Sport Federation (IMSF), trading as Motorsports Ireland, claims Allianz and UK-based DTW 1991 Underwriting, trading as Just Underwriting Motorsport, have refused the indemnity for crashes at races in Kerry and Meath.
The first was the Kerry Stages Rally on April 19, 2015, when IMSF-member driver David Murphy was acting as a safety official. While conducting a final inspection, Mr Murphy's vehicle was caused to crash into a barrier as a result of which a husband and wife and their two children were injured.
The second was on July 5, 2015, in the ALMC Rally in Navan, when driver Adrian Spencer was competing and his vehicle was caused to leave the course route and enter a field, as a result of which four men were injured.
All eight spectators issued personal injury proceedings against the drivers, the IMSF and the Irish Automobile Club Company. Tralee Autosports Co, trading as the Kerry Motor Club, and Kerry Co Council, were also sued over the first incident and ALMC was also sued over the second.
IMSF is seeking declarations that it is entitled to a full indemnity and to specific performance of its policies.
It claims Allianz and DTW 1991 both declined to indemnify the drivers citing the existence of "non-contribution clauses" and wording of the policies of insurance. They also refused on the basis of an EU Court of Justice case.
Allianz and DTW 1991 both also claimed the insurance premium had a commensurate risk cover which meant responsibility rested with the other company.
DTW 1991 also claimed the policies excluded an indemnity of another insurance policy was in place and therefore Allianz was the operative policy.
Allianz also denied indemnity on the basis that cover was only for use of insured vehicles travelling on a public road travelling between special stages of rallies. The Kerry incident occurred on a closed road during a special stage, it said. There were also other exclusions relating to racing, pacemaking and speed testing in special stages.
The IMSF appealed the indemnity refusal by DTW 1991 to the Financial Services and Pensions Ombudsman who said last November that as there were legal proceedings, the courts were the "more appropriate forum" for the complaint.
IMSF/Motorsport Ireland chief executive, Leo Hassett, says in an affidavit the effect of the Ombudsman's November decision was to stymie two dispute resolution mechanisms that had been underway.
With eight sets of personal injury High Court proceedings pending, the two drivers involved "currently stand uninsured", he says.
These pending actions and the Ombudsman's decision have brought matters to a head as a result of which Mr Hasset says an application was made to have IMSF’s case admitted to the High Court's fast track commercial list.
Today, Mr Justice David Barniville admitted the case to the Commercial Court on consent between the parties.
The judge was told, however, that the parties were still working towards having a mediation this month.
The judge welcomed the mediation moves but issued directions on how the case should proceed in the event it is unsuccessful. The court will be kept informed about the result of the mediation later this month.