IECLA 5 - Killilea & anor -v- Liberty Mutual Insurance

• Year: 2015
• Decision Date: 27 August 2013

[2015] IELCA 5

IN THE MATTER OF THE ARBITRATION ACTS 2010

AND IN THE MATTER OF AN ARBITRATION

BETWEEN MARK KILLILEA AND TONY REYNOLDS

CLAIMANTS/PLAINTIFFS

AND

LIBERTY MUTUAL INSURANCE EUROPE LIMITED

RESPONDENT/DEFENDANT

1. The costs of the Claimants, pursuant to Arbitrator’s Award dated 18 December 2013 were

initially taxed by me on 22 January 2015.

2. The Claimants have carried in Objections confined to item no. 23 of the bill of costs which

relates to the amount allowed in respect of the solicitors’ instructions fee. The sum claimed was

€95,000 which I reduced to €17,500.00

3. The Claimants are solicitors and were formerly partners in the firm of Killilea Reynolds

Whelan (‘the firm’). The Respondent Company provides insurance to, inter alia, firms of

solicitors.

4. The background to the arbitration proceedings is succinctly set out at para 4 of the

Arbitrator’s Award No. 1 dated 15 October 2013, as follows:

“4. The firm acted for a number of parties including David Bean and Rose Bean (“the Beans”)

and Edward Tynan. Five sets of proceedings have been commenced.

a) On the 30th July, 2012 the Beans sued the firm seeking the delivery up of files and

records.

b) On the 13th September, 2012 the Beans instituted substantive proceedings against the

firm claiming damages for breach of contract, negligence and breach of duty.

c) On the 13th September, 2012 the Beans also issued a writ against Edward Tynan for

damages for breach of contract, negligence and breach of duty. It appears that the

parties had entered into a partnership agreement concerning lands in County Kildare.

d) The Beans also commenced proceedings against Allied Irish Banks plc (“the bank”) on the

27th November, 2012 seeking inter alia declarations that they had no obligation on foot of

a letter of sanction on the 27th March, 2009.

e) The final set of proceedings (“the bank’s proceedings”) was commenced by the bank

against the firm by Special Summons on the 30th November, 2012 under Special

Summons bearing record number 2012/681SP.”

5. The Arbitration herein was concerned only with the indemnity which the Claimants asserted

should be provided by the Respondent under the terms of a contract of insurance (‘the Policy’)

provided by the Respondent to them and covering the period 1 December 2010 to 30 November

2011. The firm also completed a proposal form for insurance cover in the following year and

the Respondent provided cover to it for the period 1 December 2011 to 30 November, 2012.

6. The Respondent denied it had any obligation to indemnify the Claimants in respect of the

bank’s proceedings under the terms of the policy, as in accordance with the policy, it was

asserted that the claim was not one, in respect of civil liability, first made against the firm and

notified to the Respondent during the period of the policy.

7. The essential background to the dispute is that by letter of 4 October 2011, a firm of

solicitors acting on behalf of the bank wrote to the Claimants’ firm alleging that it was in breach

of four solicitors’ undertakings provided to the bank. The total of the advances made by the

bank on foot of the loans in question, which had been provided to Edward Tynan, amounted to

€5,787,005.10. Although demanded, the sum due had not been repaid to the bank. The bank’s

proceedings against the firm allege that the firm failed to ensure that the bank obtained a valid

first legal mortgage, failed to ensure execution of the necessary deeds of charge and failed to

stamp and register the deeds. Compensation in regard to the banks’ losses was sought.