The High Court has refused an application by the State to strike out proceedings in which Liberty Insurance seeks to recover from the State money it paid to settle claims by injured unseated passengers.
Ms Justice Bolger said the State had not met the high threshold required to show that Liberty’s arguments were unstateable and bound to fail. She held that the complex legal and factual issues should be considered at trial, where the evidence could be explored. The ruling does not decide whether Liberty is entitled to recover damages or establish its claimed right to subrogation.
The underlying claims arose from road traffic accidents between 2000 and 2005. The original plaintiffs were passengers travelling in parts of vehicles without seating accommodation. At the time, section 65 of the Road Traffic Act 1961 and regulations required insurance policies to exclude liability for personal injuries suffered by such passengers.
The drivers were insured by Quinn Insurance, whose business transferred to Liberty in 2011. The original plaintiffs sued the drivers, the insurers and the Motor Insurers’ Bureau of Ireland, and later joined the State defendants. After a High Court decision found the insurer liable in light of the Third Motor Insurance Directive, Quinn/Liberty settled with the plaintiffs while preserving their ability to pursue the State. The State did not consent to or participate in those settlements.
Liberty says it settled believing the State would indemnify it as it had indemnified FBD Insurance in related litigation, Smith v. Meade. It now seeks Francovich damages, a remedy for loss caused by a State’s breach of EU law, relying on what it says is a right of equitable subrogation. The State disputes the claim, arguing, among other things, that Liberty received what it bargained for or paid voluntarily. It also raised concerns about delay and whether the arrangements amounted to an impermissible assignment of a cause of action.
Justice Bolger said Liberty had identified evidence it intended to present about its reasons for settling, the effect of the payments on its reserves, and the delay since 2013. She considered those plans bona fide. She also noted that earlier Court of Appeal and EU court statements concerning the related FBD dispute could not be treated as binding findings on the issues in this case, but were sufficient to show that Liberty’s arguments could not be dismissed as unstateable at this stage.
The judge refused the State’s strike-out application. She made no finding on the merits of either side’s arguments. Her indicative view was that Liberty should receive its costs of the application, with execution stayed pending the outcome of the proceedings. She listed the matter for further submissions on costs and any other required orders on 12 October 2023.