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LAW SOCIETY -v- MIBI

  • 01-06-2017 3:32pm
    #1
    NUTLEY BOY
    Registered Users, Registered Users 2 Posts: 2,346 ✭✭✭


    Just started wading my way through this one. Messy or what.

    High Court judgment link
    http://www.bailii.org/ie/cases/IEHC/2015/H564.html

    Court of Appeal judgment link
    http://www.bailii.org/ie/cases/IECA/2016/CA60.html

    Supreme Court judgment link
    http://www.bailii.org/ie/cases/IESC/2017/S31.html

    1. As I read it a "third party" victim of a Setanta policyholder is only going to get 65% of their claim. What a paradox. A plaintiff who is struck by someone conscientious enough to take out motor insurance ends up getting 65% of their entitlement. A plaintiff struck, in identical circumstances, by a waste of space who drove without insurance gets full indemnity from the MIBI :mad:

    2. I think that the Department of Finance observation in relation to the unrecovered balance of 35% is that there may well be further funds due when the liquidation is complete. If Finance are so confident why don't they give a full indemnity to the victims for 100% of their losses and subrogate themselves to the victims' positions and take the risk in relation to what might be realised on liquidation. Otherwise, the claimants run the risk of getting nothing over 65%.

    3. What is the position of the Setanta policyholder who has incurred a legal liability to a plaintiff who can only secure 65% from the compensation fund ? Are they open personally to being pursued for the balance by the plaintiff.

    Suppose that a plaintiff has a decree for €100,000 against a Setanta policyholder. The compensation fund stumps up €65,000. Is the Setanta policyholder personally liable for the balance of €35,000 ? That could produce some interesting scenarios if the policyholder has means. This is also paradoxical in that the policyholder who paid the premium for the risk to be carried by the insurer may well now be his own insurer for the unpaid element of the claim !

    Only in Ireland.


Comments

  • #2
    Sue Pa Key Pa
    Closed Accounts Posts: 2,060 ✭✭✭Sue Pa Key Pa


    MIBI only applies to uninsured drivers causing a loss. Setanta policy holders were fully insured, there just wasn't enough of a reserve. Everyone is paying substantial levies in to the compensation fund to cover an insurer not being able to meet it's commitment. To cover 100% of every loss might encourage further reckless behaviour by insurers


  • #3
    NUTLEY BOY
    Registered Users, Registered Users 2 Posts: 2,346 ✭✭✭NUTLEY BOY


    Sue Pa Key Pa wrote: »
    MIBI only applies to uninsured drivers causing a loss. Setanta policy holders were fully insured, there just wasn't enough of a reserve. Everyone is paying substantial levies in to the compensation fund to cover an insurer not being able to meet it's commitment. To cover 100% of every loss might encourage further reckless behaviour by insurers

    They may have been fully insured but they are not being fully indemnified. Ergo, third party claimants are not being given a proper indemnity either.


  • #4
    NUTLEY BOY
    Registered Users, Registered Users 2 Posts: 2,346 ✭✭✭NUTLEY BOY


    Sue Pa Key Pa wrote: »
    MIBI only applies to uninsured drivers causing a loss. Setanta policy holders were fully insured, there just wasn't enough of a reserve. Everyone is paying substantial levies in to the compensation fund to cover an insurer not being able to meet it's commitment. To cover 100% of every loss might encourage further reckless behaviour by insurers

    Would any system of bonding help with avoiding the shortfall problem that has arisen here ? I suspect not as it would probably be so high as to be commercially unattractive to insurers.


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