Sweeney v The Voluntary Health Insurance Board

• Jurisdiction: Ireland
• Court: Court of Appeal (Ireland)
• Judge: Mr Justice Maurice Collins
• Judgment Date: 09 June 2020
• Neutral Citation: [2020] IECA 150
• Docket Number: Court of Appeal Record No 2019/329
• Date: 09 June 2020

Between

Shay Sweeney and The Limerick Private Limited

Plaintiffs/Respondents

and

The Voluntary Health Insurance Board Limited

Defendant/Appellant

[2020] IECA 150

Faherty J.

Power J.

Collins J.

Court of Appeal Record No 2019/329

THE COURT OF APPEAL

CIVIL

Expert witness – Exclusion – Conflict of interest – Appellant seeking the exclusion of an expert witness for the respondents – Whether there was a conflict of interest

Facts: The plaintiffs/respondents, Mr Sweeney and The Limerick Private Ltd, had plans to develop a private hospital in Limerick City. In 2006, the plaintiffs approached the defendant/appellant, the Voluntary Health Insurance Board Ltd (the VHI), requesting that it would approve the hospital and agree that the cost of providing medical services to VHI members in it would be covered by the VHI. In 2014, the VHI refused to approve cover. In proceedings commenced in May 2015, the plaintiffs challenged the lawfulness of that refusal. The statement of claim asserted that the VHI was in a dominant position in the market for the provision of private health insurance in the State and that it also held a dominant position in the related market for the purchasing of private medical services. The refusal to approve their hospital was, the plaintiffs said, an abuse by the VHI of this position(s) of dominance for which there was no objective justification. Accordingly, the Plaintiffs said, the VHI was in breach of the provisions of s. 5 of the Competition Act 2002 and/or Article 102 TFEU. The plaintiffs sought damages and various declaratory reliefs, including a declaration that they were entitled to have their hospital approved by the VHI. The VHI appealed to the Court of Appeal against the judgment and order of the High Court (Barrett J) refusing its application to exclude Professor McDowell from acting as an expert witness for the plaintiffs in the proceedings that order was made on 4 June 2019, following on the High Court’s considered judgment of 28 May 2019. The essence of the VHI’s complaint was that Professor McDowell ought not to be permitted to act as expert in the proceedings, not because of his retainer in the RAS Proceedings (High Court Record No 2010 No 5713P, RAS Medical Limited t/a Auralia/Park West Clinic v The Voluntary Health Insurance Board) and the CMC Proceedings (High Court Record No 2012 No 1101P, CMC Medical Operations Limited (In Liquidation) t/a Cork Medical Centre v The Voluntary Health Insurance Board) per se, but because of the privileged and confidential information that had been provided to him by the VHI for the purposes of that retainer and the risk that such information could be disclosed in these proceedings.

Held by Collins J that the applicable test was not that applied by the High Court. He also determined that, on the basis of the affidavit material before the Court, the Judge was wrong to conclude that, even if the applicable threshold test was as stated by the Judge, VHI’s application ought to be refused; as the VHI observed, the Judge did not in fact correctly address himself to that test and he also failed to engage appropriately with the uncontested evidence of Mr Quigley of McCann FitzGerald, the solicitors for the VHI. Collins J held that the Judge appeared to have been unduly influenced by the spectre of the “rich client” cornering the market in expert witnesses. While the precise circumstances in which the plaintiffs came to retain Professor McDowell had not been disclosed, Collins J held that it was reasonable to suppose that the plaintiffs were at all material times aware of Professor McDowell’s prior retainer by the VHI in the RAS and CMC Proceedings; they could have decided to look for another expert at that stage but did not do so. Professor McDowell could have declined to act, but he did not and that was, in Collins J’s view, an error of judgment on his part. Collins J held that, by agreeing to his engagement by the plaintiffs in these proceedings, Professor McDowell put himself into a position of obvious conflict of interest, belatedly recognised before the Court when the plaintiffs acknowledged that there would be “no reality” to him continuing to act for the VHI if permitted to remain as expert for the plaintiffs. In those circumstances, and contrary to what appeared to have been the view of the Judge, there was in Collins J’s opinion nothing overbearing or inappropriate about the VHI’s application.

Collins J held that the VHI’s appeal would be allowed.

Appeal allowed.

No redactions needed

JUDGMENT of Mr Justice Maurice Collins delivered on 9 June 2020

INTRODUCTION

1 The Voluntary Health Insurance Board Limited (“ the VHI”) appeals against the Judgment and Order of the High Court (Barrett J) refusing its application to exclude Professor Moore McDowell from acting as an expert witness for the Plaintiffs in these proceedings. That Order was made on 4 June 2019, following on the High Court's considered judgment of 28 May 2019.

2 The broad circumstances in which that application comes to made may be stated relatively briefly, though it will be necessary to look more closely at the facts in due course. The Plaintiffs (the First is a director of the Second) have long had plans to develop a private hospital in Limerick City. In 2006, the Plaintiffs first approached the VHI — the State's largest provider of private health insurance (“PHI”) — requesting that it would approve the hospital and agree to cover the cost of providing medical services to VHI members in it. In 2014, after what appears to have been a protracted process of engagement/negotiation, the VHI refused to approve cover.

3 In these proceedings — commenced in May 2015 — the Plaintiffs challenge the lawfulness of that refusal. The Statement of Claim asserts that the VHI is in a dominant position in the market for the provision of PHI in the State and that it also holds a dominant position in the related market for the purchasing of private medical services. The refusal to approve their hospital is, the Plaintiffs say, an abuse by the VHI of this position(s) of dominance for which there is no objective justification. Accordingly, the Plaintiffs say, the VHI is in breach of the provisions of section 5 of the Competition Act 2002 and/or Article 102 TFEU. The Plaintiffs seek damages and various declaratory reliefs, including a declaration that they are entitled to have their hospital approved by the VHI.

4 All of these claims are denied by the VHI.

5 In October 2017, Professor McDowell was retained on the Plaintiff's behalf as an independent economic expert. Professor McDowell is a former lecturer in economics in University College Dublin who has acted as an economic expert and witness in many actions before the Irish courts, including a significant number of competition law claims. The VHI's legal advisers first became aware of Professor McDowell's retainer in November 2017 and objected to it. The essential basis of that objection — which forms the basis for the application now before this Court — is that Professor McDowell was and continues to retained by the VHI as an economic expert in two other competition law actions brought against the VHI arising from decisions made by it not to provide PHI cover to other private hospitals elsewhere in the State. 1 Professor McDowell was also retained by the VHI in respect of other contentious matters but the focus of debate before this Court (and before the High Court) was on his engagement in those two actions.

6 The VHI says that this is a case where the Court should exercise its inherent jurisdiction — one which it accepts is “undoubtedly… rare” — to exclude Professor McDowell from acting as expert witness for the Plaintiffs. 2 It says that it would be unfair if the expert witness that it retained to assist in its defence of the RAS and CMC Proceedings — and to whom in that context it provided a significant amount of privileged and commercially confidential material — should be permitted to act as an expert witness against it in these proceedings which, the VHI says, involve very similar, if not substantially identical, issues. It also says that its ability to instruct Professor McDowell in the RAS and CMC Proceedings would be undermined if he is permitted to continue to act for the Plaintiffs in these proceedings.

7 I should record immediately that Professor McDowell has stated on affidavit that he is fully cognisant of his duties as an independent expert, that he does not retain hard or electronic copies of the material provided to him on behalf of the VHI and that he has not relied on any information provided to him by on behalf of the VHI, confidential or otherwise, in the preparation of the draft report which he has apparently provided to the Plaintiffs. None of this is contested. Professor McDowell has also offered an undertaking not to disclose any confidential information provided to him by the VHI. Professor McDowell's bona fides are not in question, as Counsel for the VHI, Mr Gallagher, made clear in his submissions to this Court. The VHI does not suggest that Professor McDowell would intentionally misuse the privileged and/or confidential information previously provided to him. Nonetheless, it says that Professor McDowell cannot “unknow” that information or compartmentalise it so as to prevent its inadvertent or unwitting use or disclosure in these proceedings and that the only effective remedy in the circumstances is an order excluding him from continuing to act as an expert witness for the Plaintiffs.

8 For the reasons set out in its written judgment of 28 May 2019 ( [2019] IEHC 360), the High Court (Barrett J) refused the VHI's application, though “in an abundance of caution” the Judge directed Professor McDowell to give the undertaking that had been offered in the course of the hearing before him. The High Court Judge considered that the applicable...