The High Court allowed solicitors for the first defendant, Arthur O’Leary, to come off record in a personal injuries action, but made that permission conditional on Liberty Insurance bearing the costs of the application and certain costs incurred by the plaintiff after 5 February 2015.
Mr Justice Max Barrett delivered the judgment on 17 July 2019. The application was brought under Order 7, rule 3(1) of the Rules of the Superior Courts. The court’s decision concerned whether the solicitors could cease acting and who should bear costs. It did not determine whether Liberty was entitled to refuse insurance cover.
Liberty told Mr O’Leary in a letter dated 16 February 2018 that it was declining cover and had withdrawn its instructions to LK Shields Solicitors. The letter said the firm had sought his comments on the plaintiff’s draft statement of claim in 2012 and sent repeated reminders. It said his responses to further queries did not arrive until July 2017, were inadequate or raised further questions, and that he did not respond to those further queries. Those were the insurer’s account of events, recited in the judgment.
The judge reviewed the correspondence and said it did not appear that any meaningful reply had been received until July 2017. He rejected the submission for the solicitors that there had been no unreasonable delay by the insurer. Although the insurer had given Mr O’Leary close to three years to engage, the judge considered that by 5 February 2015 it had enough information to decline cover on the basis it later relied on. The delay from that point until the declinature in February 2018 was an unusual feature of the case.
The court stressed that this assessment did not decide whether the insurer’s refusal was valid. It addressed the insurer’s handling of the matter only insofar as it affected costs. The judgment also noted that no dispute over the insurer’s liability had been referred to arbitration within the nine-month period specified in the policy letter.
The solicitors were permitted to come off record, subject to Liberty bearing the costs of the application and the plaintiff’s costs, from 5 February 2015, of processing her claim against Mr O’Leary as represented by the insurer. If Liberty undertook to pay those costs, the matter could be dealt with on that basis; otherwise, the judgment said, the insurer would have to be joined as a party to ensure recovery.