The High Court has ruled that BUPA Ireland Limited and BUPA Insurance cannot recover damages from the State over the 2003 risk equalisation scheme for private health insurance. The court held that the scheme had been void from the outset after the Supreme Court quashed it as ultra vires, but that this did not establish an entitlement to compensation.
The preliminary hearing concerned the effect of the Supreme Court’s 2008 order and whether BUPA could claim damages for alleged breaches of EU law and constitutional rights. The Supreme Court had found that the Minister adopted the scheme on an erroneous interpretation of the Health Insurance Act 1994. It did not decide the other legal challenges or the question of damages, which it remitted to the High Court.
In his judgment delivered on 7 March 2013, Mr Justice Cooke found that the Supreme Court ruling meant the earlier High Court findings that the scheme was objectively justified could no longer be treated as tenable. Those findings had depended on the view that the law authorised “community rating across the market”, which the Supreme Court rejected. The judge also held that the parties were not barred from reopening the substantive issues through issue estoppel. If those issues had to be reconsidered, relevant evidence would need to be heard afresh unless the parties agreed otherwise.
The court nevertheless concluded that the damages claim could not succeed, even assuming a rehearing found the scheme harmful and not objectively justified. BUPA had not made any of the transfer payments required by the scheme. The judge held that no actual attack on its property rights had occurred and that the Supreme Court’s order quashing the scheme had vindicated those rights.
The court also found that the EU law claims did not meet the requirements for State liability. It said the scheme’s preparation involved extensive consultation and addressed a technically complex area, so the adoption of the scheme did not amount to a sufficiently serious breach. The judge further held that BUPA’s voluntary decision to sell its Irish business in March 2007 broke the direct causal link between the alleged breaches and the claimed loss in the business’s value.
The court therefore ruled that BUPA was not entitled to damages for the alleged constitutional or EU law infringements. It did not determine how damages would be calculated, saying that issue did not need to be addressed.