Moloney v Dunne and Another
| Jurisdiction | Ireland |
| Judge | Mr Justice Twomey |
| Judgment Date | 15 February 2024 |
| Neutral Citation | [2024] IEHC 84 |
| Court | High Court |
| Docket Number | Record No. 2020/00159 |
and
[2024] IEHC 84
Record No. 2020/00159
THE HIGH COURT
CIRCUIT COURT APPEALS
JUDGEMENT of Mr Justice Twomey delivered on 15 th day of February, 2024
. For several years there have been two completely contradictory approaches by the High Court to whether it is lawful to insert terms into the court order which is made when a personal injuries case settles (“Personal Injury Settlement Orders”).
. One view is that these orders are perfectly legal, even though they prejudice the Department of Social Protection, which is not party to the proceedings.
. The other view is that they are not lawful and they are, in effect, a means by which the taxpayer ends up funding payouts by insurance companies to plaintiffs to settle their personal injury claims.
. Yet, despite that uncertainty in the High Court regarding the law applicable Personal Injury Settlement Orders, there has been no clarification from the Court of Appeal/Supreme Court as to which approach is the correct one.
. This is because there has been no appeal, by the parties to such cases, of such orders. It is also because the High Court itself has no way of resolving these conflicting interpretations. This is because under s 38 of the Courts of Justice Act, the High Court cannot, of its own accord, seek to clarify the law by referring the issue to the Court of Appeal by way of case stated (in contrast to the District Court which under s 52 of the Courts (Supplemental Provisions) Act, 1961 can state a case to the High Court).
. This means that today, a judge of the District, Circuit or High Court, who is dealing with a personal injuries case that has settled, has an arbitrary choice as to which of the two conflicting interpretations to apply.
. This is an issue of considerable importance, since the rule of law requires that all persons are accountable to the same laws, rather than there being an arbitrary choice for a judge of which law to apply. It was of sufficient importance in 2020 that Keane J published an article on the issue in the Irish Judicial Studies Journal. 1 In that article, he highlighted that the lack of uniformity of approach in the courts to Personal Injury Settlement Orders, was ‘ bound to have an adverse effect on public confidence’.
. However, in the many years which have passed since this lack of uniformity first arose, and also since it was first highlighted by Keane J., there does not appear to have been any appeal by a defendant/insurance company of a refusal of a court to insert terms into a Personal Injury Settlement Orders and so the legal uncertainty continues.
. This is also a matter of considerable practical relevance when one considers that personal injury cases are one of the most common types of cases heard in the Irish courts, with 12,459 personal injury cases in 2022. 2 Furthermore, since circa 99% of personal injuries cases settle, 3 this means that Personal Injury Settlement Orders play a huge part in personal injury law. Indeed, it is arguable that one of the most important practical and financial issues in personal injury law today is the question of the legality of the terms of Personal Injury Settlement Orders. Yet, even though hundreds of Personal Injury Settlement Orders are made on a weekly basis in the Irish courts, there continues to be an arbitrary choice for judges as to which law to apply to the finalisation of their terms. On the one hand, Kuczak v Treacy Tyres (No. 2) [2022] IEHC 619 says that it is unlawful to insert terms, which prejudice an unrepresented third party, in such orders. On the other hand, Wilson v Leonardi [2022] IEHC 670 takes the completely contrary position, i.e. that it is lawful for these terms to be inserted in those orders.
. This issue arose in this case because there was an application by a defendant/insurance company to insert terms in a Personal Injury Settlement Order, which have the effect of
. However, the Law Reform Commission has stated that it is ‘wrong’ that, in personal injury cases, such as this one, the taxpayer has to ‘ foot the bill for what might be regarded as a business expense of the insurance companies’. 4 Yet, in this Court's view, this is exactly what happens with the current practice of insurers inserting a term in court orders when a personal injury case settles with the intention of depriving the Department of a repayment, to which it would otherwise be entitled (e.g. the insertion of a term in a Personal Injury Settlement Order that ‘liability was split 50/50’ or that there ‘was no claim for loss of earnings’).
. For this reason, in Kuczak (No. 2), this Court agreed with the Law Reform Commission and concluded that it would be ‘wrong’ to insert such terms in Personal Injury Settlement Orders. It did so because, inter alia, the only purpose of such terms is to financially prejudice the Department, which is not represented when the order is made.
. The real-life effect of such court orders is that an insurance company has more money, at the expense of the taxpayer, to fund a payout to a plaintiff on the settlement of his personal injuries' claim. In effect therefore, the taxpayer is funding a payout to a plaintiff on the settlement of his personal injuries' claim, which this Court believes is ‘ wrong’.
. For example, in Fahy v Padraic Fahy Tiling Contractors Ltd & Anor [2021] IEHC 682, if this Court had inserted the order in the Personal Injury Settlement Order, the insurance company would have saved on having to pay €42,000 in ‘ recoverable benefits’ to the Department. Then, it could have used this saving to pay that sum instead to the plaintiff for settling his case. It is this Court's view that this sum of €42,000 is taxpayer's money and should be paid to the taxpayer and so the defendant/insurer should not be relieved of the obligation to repay the Department.
. As is clear from that decision in Kuczak (No. 2) at para 43, the Minister for Social Protection (“Minister”) also took the view that these terms should not be inserted in court orders. Her view on the law was the same as this Court's i.e. that s 343R(2) of the Social Welfare (Consolidation) Act, 2005 ‘does not apply to settlements’. It is this Court's view that to be a court order for the purpose of s 343R(2), the term which is inserted (apart from those inter partes terms, such as striking out the proceedings, vacating previous orders, allocating costs) had to be one determined by a court after hearing the case and determining liability and any other factual issues regarding a personal injuries claim. To put it another way, a court order for the purpose of s 343R(2) is not some statement that is agreed between a plaintiff and defendant for their financial benefit, as part of their settlement, which is put into a court
order in order to prejudice the taxpayer (who is not party to the proceedings) and help fund the payment of a settlement sum to the plaintiff. However, since the Kuczak (No. 2) case was heard, the Wilson judgment has been handed down, in which another High Court judge reached a different conclusion from this Court. In line with Re Worldport Ireland Ltd (In Liquidation) [2005] IEHC 189, that court departed, as it was entitled to do, from Kuczak (No. 2). For the reasons set out in that judgment, it found that it is appropriate for such terms to be inserted in Personal Injury Settlement Orders, even though they financially prejudice a third party, which is not party to the proceedings.
. There is, of course, nothing unusual in two judges carefully analysing the law and reaching different conclusions. On the contrary, it might be regarded as a positive, from the perspective of the independence of the judiciary, that all judges do not hold the same views. For example, the recent Supreme Court case of O'Meara v Minister for Social Protection [2024] IESC 1 is a case where two of the seven judges differed on the relevant law. However, different judicial opinions at appellate court level do not create any uncertainty regarding the state of the law, since the majority opinion is the settled law.
. In contrast, where judges of a trial court, such as the High Court, reach different views, there is a resulting lack of certainty regarding the state of the law. This lack of certainty is normally very short-lived, as it is usually resolved by an appeal by one of the parties, which results in a decision of an appellate court, which clarifies the law.
. Yet, what is unusual about the law relating to Personal Injury Settlement Orders is that there have been no appeals, and no apparent prospect of such appeals, to enable the Court of Appeal/Supreme Court to clarify the law.
. This is despite that fact that the divergence in practice has been in existence for several years 5 and was first brought to public attention in 2020 by Keane J., who was then sitting in the personal injuries list. This is because, in the absence of an appeal, and the absence of any power by the High Court to state a case to the Court of Appeal, Keane J. brought this issue to the attention of the judiciary by publishing his article in a journal whose primary purpose is ‘ to provide Irish judges with analyses and opinions that are relevant and useful to them in their work’. 6
. Crucially all of this means that when this Court is asked by the plaintiff and the defendant in this case to insert...
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