The Law Society of Ireland v The Motor Insurers Bureau of Ireland

• Jurisdiction: Ireland
• Court: Supreme Court
• Judge: Denham C.J.,Charleton J.,O'Malley J.
• Judgment Date: 29 April 2016
• Neutral Citation: [2016] IESCDET 57
• Date: 29 April 2016

IN THE MATTER OF AN APPLICATION BY THE ACCOUNTANT OF THE COURTS OF JUSTICE PURSUANT TO THE INSURANCE ACT 1964 (AS AMENDED BY THE INSURANCE (AMENDMENT) ACT 2011

Between:

THE LAW SOCIETY OF IRELAND

CLAIMANT (By Order of the Court) /RESPONDENT

AND

THE MOTOR INSURERS' BUREAU OF IRELAND

APPLICANT/RESPONDENT (By Order of the Court)

[2016] IESCDET 57

Denham C.J.

Charleton J.

O'Malley J.

An Chúirt Uachtarach

The Supreme Court

DETERMINATION

APPLICATION FOR LEAVE TO APPEAL TO WHICH ARTICLE 34.5.3° OF THE CONSTITUTION APPLIES

RESULT: The Court makes an order allowing an appeal to this Court under Article 34.5.3° of the Constitution from the judgment of the Court of Appeal delivered on the 2nd March 2016.

REASONS:

1 This determination concerns an application brought by the Accountant of the Courts of Justice concerning the proper interpretation of the Motor Insurers Bureau of Ireland Agreement, the MIBI Agreement. The issue is whether the MIBI have responsibility under their agreement with the Government to pay out successful claims to plaintiffs who have sued drivers formerly insured by Setanta Insurance Company Ltd, amounting to around 1,750 cases. The applicant here is the MIBI because the answer in the High Court and in the Court of Appeal was affirmative. On this application for leave to appeal, the Accountant of the Courts of Justice has remained neutral. The Law Society of Ireland advanced the claim in the High Court, essentially for reasons of legal clarity, and there is opposition from that body for any further appeal.

2 The background is that Setanta Insurance Company Ltd went into liquidation following an Extraordinary General Meeting in Malta on 16th April 2014. It seems that it had written insurance in Ireland at very competitive premium rates and this eventually turned out to be insufficient to cover liabilities. What the state of the liquidation is, has not been disclosed in the papers but it is a matter of reasonable inference that the liabilities of the liquidated insurance company will be nowhere near enough to cover any potential claims by plaintiffs injured in road traffic accidents. Drivers in Ireland are required to be covered by an approved policy of insurance under s. 56 of the Road Traffic Act 1961 and membership of an agreement between the insurers in Ireland for road traffic liability and the Government is required under s. 78 of that Act. Essentially, this means that when untraced or uninsured driver is involved in an accident, that the MIBI will run the claim and pay the damages, with the possibility of recovery against the driver at fault, if he or she can be traced or has any money, and this scheme is run by levying all of the insurance companies at an annual rate to fund this service. It is a requirement of European Union law that there be such a scheme, but the actual terms of it not dictated by any European legislation and in Ireland the nature of the liability and those were able to recover is governed by the MIBI Agreement, with certain sections of particular statute is perhaps informing the interpretation thereof. Clause 4.1.1 of the Agreement has been quoted in all the judgements and, as quoted, reads as follows:

Subject to the provisions of clause 4.4 if Judgement/Injuries Board Order to Pay in respect of any liability for injury to persons or death or damage to property which is required to be covered by an approved policy of insurance under Section 56 of the Act is obtained against any person or persons in any court established under the Courts (Establishment and Constitution) Act 1961 (No 38 of 1961) or the Injuries Board established by the PIAB Act 2003 whether or not such person or persons be in fact covered by an approved policy of insurance and any such judgement is not satisfied in full within 28 days from the date upon which the person or persons in whose favour such judgement is given becomes entitled to enforce it then MIBI will so far as such judgement relates to injury to persons or damage to property and subject to the provisions of this Agreement pay or cause to be paid to the person or persons in whose favour such judgement was given any sum payable or remaining payable thereunder in respect of the aforesaid liability including taxed costs (or such proportion thereof as is attributable to the relevant liability) or satisfy cause to be satisfied such judgement whatever may be the cause of the failure of the judgement debtor.

In especially quoting as above, there were inferences to be drawn that this is the only clause that is of importance and the entire context requires to be looked at. Further, in quoting the above, this determination is not one as to the potential liability of the parties but as to whether the test under the Constitution is met...