The High Court set aside a third party notice against Medical Defence Union Limited (MDU) in proceedings arising from a cosmetic procedure, ruling that the notice disclosed no reasonable cause of action and had no reasonable prospect of success.
The judgment, delivered by Mr Justice Binchy on 30 June 2016, concerned a procedure performed in January 2007 by Samy Malhas at a clinic operated by Cosmedico Clinic Dublin Limited. Ann Marie Kiernan alleges negligence by the clinic and Mr Malhas. The court’s decision concerned only the MDU notice, not the merits of her negligence claim. The third named defendant was said to have no involvement in this application.
After Mr Malhas died in January 2013, the MDU ended the discretionary assistance it had been providing to his defence. His estate was found insolvent, and its beneficiaries disclaimed any interest. An administrator ad litem was appointed to reconstitute the proceedings against the estate, but that step had not yet been completed when she applied to join the MDU.
The application and resulting notice were based on the assertion that Mr Malhas had a valid insurance policy with the MDU and that the estate was entitled to an indemnity under it. At the hearing, counsel for the administrator accepted that no insurance policy existed and that she could not advance an estoppel argument. The judge said the pleadings advanced no other claim against the MDU, and no amendment was proposed that could save them.
The administrator’s counsel argued that the MDU had failed to provide an indemnity and that evidence or documents might show its decision to end assistance was unfair or procedurally improper. The judge found no such allegation in the pleadings. He held that the case pleaded was based solely on an insurance policy, so the notice could be set aside under Order 19, rule 28 of the Rules of the Superior Courts.
The judge also considered the court’s inherent jurisdiction and concluded that it supported setting aside the notice. He reasoned that any challenge to the fairness of ending assistance would have to be assessed in relation to the deceased member or his estate. Given the estate’s insolvency and the beneficiaries’ disclaimer, he said it was difficult to see how the decision could harm the estate; further document disclosure could not change that. Any argument that Kiernan herself relied on earlier indications of assistance and was thereby entitled to prevent the MDU from denying indemnity was hers to make, not the administrator’s.
The judgment did not determine Kiernan’s negligence claim. It noted that she had earlier rejected a settlement offer and that the delay, the death and insolvency of Mr Malhas, and the MDU’s decision left her facing litigation risks. The court also observed that doctors were not then legally required to hold professional indemnity insurance in Ireland, and raised concern that proposed legislation’s reference to “other indemnity arrangement” could include discretionary cover of the kind the MDU provided.