Insurance Update: A Warning To Solicitors From The Court Of Appeal About Dormant Cases

Author:Ms Nina Gaston, Ailbhe Gilvarry and Rachel Kavanagh
Profession:Mason Hayes & Curran

The Court of Appeal recently overturned a High Court decision where the Judge had concluded that the solicitor was not liable for losses allegedly arising from delays in proceedings.

In the proceedings which gave rise to this professional negligence action, Coakley Moloney ("CM") solicitors had acted for Emerald Isle Assurances and Investments Limited against Hibernian Life Ltd.  The claim arose from the termination of a tied agency agreement and sums allegedly due by Hibernian to Emerald.

Emerald retained CM who issued initial proceedings in 1994 in which damages were eventually claimed for over €7.6 million1.  Hibernian filed a defence in 1997 and lodged the sum of €540,0002.

After Hibernian brought an application to dismiss the action for delay in 2002, CM engaged a forensic accountant to prepare a report on Emerald's alleged loss.  However, between 2003 and 2007 Emerald could not agree with this forensic accountant about what value to put on their claim.  As far as Hibernian's solicitors were concerned, they heard nothing from CM for six and a half years until CM served a Notice of Intention to proceed in 2009.

In January 2010 Hibernian brought a second application to dismiss the action on the grounds of inordinate and inexcusable delay.  Both Senior Counsel and solicitors advised Emerald that there was a real risk that this application would be successful.  Emerald settled the claim for €300,000 inclusive of costs.  Emerald subsequently brought proceedings against CM.

The High Court decision

The High Court, in January 2012, found that "both sides had a degree of culpability".  The President of the High Court concluded that, whilst CM had failed to give a detailed, explicit and elaborate warning as to the consequences that would or might follow from such delay, any such warning would have made no difference in the circumstances.


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