Many of our clients and thousands nationwide are still awaiting payment of compensation from Setanta. This delay is most frustrating and even though our clients have already had their cases ruled in the High Court (Flynn -v-Hannon ruled by Justice Hedigan on the 20th October 2015), our client have still not gotten paid. Why is this? By way of background it is important to understand the unique circumstances surrounding these cases which are referred to by the legal profession as the “Setanta Cases”
Setanta Insurance Company Ltd (in liquidation) (“Setanta”) is a Maltese incorporated insurance company which sold care insurance, house insurance and all types of Insurance Policies in Ireland. Setanta was placed into voluntary liquidation in Malta in April 2014 and the liquidation is being carried out under Maltese law.
The liquidator is currently working to value the total cost of outstanding claims and to ascertain the extent to which these claims can be met by the assets of Setanta. The liquidator has advised that this process must be completed and all of the company’s liabilities (including claims) must be quantified before any settlements can be paid to claimants. While the process of quantifying claims is still ongoing, the liquidator has indicated that there will be a significant shortfall between available funds and the total value of claims.
For this reason, and given that it is not known when the liquidator will be in a position to make payments, it is intended to make advance applications to the Insurance Compensation Fund (‘ICF’) on behalf of eligible claimants. The eligibility of any particular claimant will be a matter for the liquidator to determine, in the first instance.
What is the Insurance Compensation Fund?
The operation of the ICF is governed by the Insurance Act 1964, as amended by the Insurance (Amendment) Act 2011.The ICF provides compensation to eligible claimants of (i) an Irish-authorised insurance company in liquidation; or (ii) an insurance company authorised in the European Union, which carries on business in Ireland, and which has gone into liquidation. The ICF is maintained and administered under the control of the President of the High Court, acting through the Accountant of the Courts of Justice (the “Accountant”). Payments from the ICF must be approved by the President of the High Court following an application by the Accountant.
Also we have to point out that A maximum of 65% of the value of the claim, or €825,000, (whichever is less) can be recovered from the ICF
So are all RTA Claims against Setanta covered by the ICF? The Answer is Yes and the claimant is known as a third party claimant who is an individual taking a claim against another individual who is a policyholder of the insurer in liquidation;
The ICF does not cover the THESE CLAIMS AS THEY ARE LIKELY to be paid by another body, such as the Motor Insurers’ Bureau of Ireland (‘MIBI’); The MIBI is a non-profit making private company which was incorporated in 1955 by agreement between the Government and Irish motor insurance companies. Its principal role is to compensate victims of road traffic accidents caused by uninsured and unidentified vehicles and the rules that apply to claimants taking a case for compensation for personal injuries against the MIBI are set out in the 2009 MIBI Agreement between the MIBI and the Minister for Transport
In early 2015, High Court proceedings were instituted by the Accountant to determine the potential liability of the MIBI to pay certain claims under Setanta insurance policies. The Accountant adopted a neutral position in the proceedings and the Law Society of Ireland was appointed by the High Court to act as the ‘applicant’ in the case. The proceedings, Law Society of Ireland v Motor Insurers’ Bureau of Ireland Record No. 2015/85SP, were heard by the High Court in July 2015. The outcome of that case was appealed by the MIBI to the Court of Appeal in September 2015. On 2 March 2016, the Court of Appeal issued a judgment which upheld the High Court judgment and ruled that the MIBI is potentially liable to pay out in respect of certain claims against persons who were insured with Setanta at the time of its entry into liquidation in April 2014. The MIBI has appealed this judgment to the Supreme Court.
It is not known when the Supreme Court will hear this Appeal but until it does so every single claimant is in limbo and cannot enforce Court Orders for payment of compensation due which is really an appalling state of affairs.