Limerick private hospital has until June to come up with €1.79m for legal costs in claim against VHI

Hospital firm sued the VHI board over its refusal to provide cover for proposed new hospital in Limerick

Judge made the ruling on Thursday when he formalised orders he made last week that Limerick Private Ltd and its director Shay Sweeney must provide security for costs in the case.

An application can be made to strike out High Court proceedings by a private hospital company against the VHI health insurer next July if the company has not first come up with €1.79m in legal costs should it lose the action.

Mr Justice Max Barrett made the ruling on Thursday when he formalised orders he made last week that Limerick Private Ltd and its director Shay Sweeney must provide security for costs in the case.

They have sued the Voluntary Health Insurance (VHI) board claiming the insurer abused its dominant position by refusing to provide cover for their proposed new hospital in Limerick in breach of competition law. 

They also seek damages for interference with their constitutional right to earn a livelihood.

VHI denies the claims.

The Limerick Private Hospital project was a proposal for a five-storey above ground, with three levels underground, hospital, costing some €75m. It would have 95 beds and six operating theatres. Planning permission was granted in March 2007.

It is claimed as a result of the VHI refusing cover for the proposed hospital — a key component in private hospital funding — Limerick Private was unable to obtain third-party funding.

The VHI sought security for costs which was opposed by Limerick Private and Mr Sweeney on grounds including it was the actions of the defendant which led to their impecuniosity.

The VHI denied the claims.

Mr Justice Barrett did not accept their impecuniosity was caused by the defendant's wrongdoing.

When the case returned before him on Thursday, he was told the sides had agreed the wording of orders in relation to the judge's decision on security for costs.

However, there was disagreement on whether there should be a time limit on when the monies should be provided before the VHI would be entitled to apply to strike out the entire proceedings.

The judge disagreed with the VHI's suggestion that the security should be provided within 90 days of the making of his order.

However, he said the money should be provided by June 24 next and if not the VHI can apply in July to strike out the case.