The Supreme Court has dismissed an appeal by the Motor Insurers’ Bureau of Ireland (MIBI), holding that its 2009 agreement generally requires it to cover claims against drivers insured by Setanta Insurance when the company became insolvent.
The judgment, delivered by Mr Justice Clarke on 25 May 2017, concerned who should meet compensation claims by people injured in accidents caused by drivers whose Setanta policies could not be paid because of the insurer’s insolvency. The alternatives were the MIBI or the Insurance Compensation Fund, which can pay only where it appears unlikely that a claim can be met elsewhere.
The Law Society of Ireland, appointed to represent potential claimants, argued that the agreement required MIBI to pay qualifying judgments that remained unpaid for 28 days, whether or not the driver was in fact insured. MIBI argued that its agreement covered a narrower group, such as claims involving uninsured drivers, and did not extend to an insurer’s insolvency.
The High Court ruled for the Law Society, and the Court of Appeal dismissed MIBI’s appeal. The Supreme Court considered the agreement’s wording and context, including its preamble, conditions for claims, the Fund legislation and arguments about the consequences for insurers and drivers.
Justice Clarke said the agreement was ambiguous in part, but gave significant weight to clause 4.1.1, which he described as the primary provision defining MIBI’s obligations. He concluded that it generally covers an unsatisfied judgment against a driver whose use of a vehicle was subject to compulsory insurance, including where the driver’s insurer became insolvent. The agreement’s conditions precedent must still be satisfied where they are relevant in practice.
The ruling determined the interpretation of the agreement; it did not decide individual Setanta claims or establish that any particular claimant met the agreement’s conditions. The Court also did not determine whether the Insurance Compensation Fund must pay in a particular case. It dismissed MIBI’s appeal.