Two High Court justices clashed over the court’s practice of making consent orders in personal injury settlements, so insurers do not have to reimburse taxpayers for benefits. ‘State paid to the plaintiffs because of their injuries.
The conditions of consent mean that the insurers / defendants do not have to reimburse the Department of Social Welfare (DSP) for certain benefits paid to the injured party, leaving the defense with more money to buy back the claim of the injured party. applicant.
The ministry estimated that some 20 million euros of recoverable benefits were missing in 2017, noted Judge Michael Twomey.
The main dispute between Judge Twomey and Judge Kevin Cross is whether the High Court should make such orders by consent.
In judgments on three separate cases, two in June and the last one published this month, Judge Twomey concluded that the court should not, for reasons including that such orders resulted from a private settlement between parties whose the interests were aligned in the search for the term consent.
Judge Twomey reiterated this point of view in his latest judgment, which follows a July judgment by Judge Cross, which strongly disagrees with his colleague.
Judge Cross, who manages the court’s personal injury list, said the universal practice in personal injury cases is that in consent cases, the parties’ agreement on the position regarding recoverable benefits is accepted by the judges.
The relevant law on recoverable benefits does not place any limitations on the types of court orders to be made or stipulate that the order should only be made after hearing testimony or submissions from states parties, he said. declared.
The issue is of widespread importance in many cases and the Supreme Court may ultimately be called upon to resolve the dispute.
Under the 2014 Recoverable Compensation and Assistance Plan, defendants found liable for injuries sustained by a plaintiff must reimburse the state for benefits paid to the plaintiff as a result of their injuries. The amount is ordered or assessed by a court under section 343R (2) of the Social Welfare Consolidation Act.
However, when plaintiffs and defendants / insurers settle a case, they can come to a private agreement regarding the extent of the defendant / insurer’s liability.
Judge Twomey noted that the parties may, for example, agree that the defendant is only liable for 10%, so that he is also only required to reimburse 10% of state benefits.
If a court inserted this agreed-upon term into the court order, the DSP would end up subsidizing the defendant / insurer to pay the claimant the settlement, he said.
He pointed out that there was no suggestion of fraud on the part of the plaintiffs or defendants nor any suggestion of bad faith on the part of the parties or lawyers involved in such settlements.
In the first two cases before the judge where the issue arose, the defendants were insurers but the third case concerned a settlement with the HSE.
In all three cases, he considered that the conditions of consent should not be inserted in court orders because they were: (1) not based on evidence tested before a judge with no financial interest in the conclusion; (2) arose out of a private settlement between parties whose interests are aligned in the search for conditions; (3) the effect is to cause the taxpayer to subsidize the payment of the settlement by the insurer / defendant and: (4) the taxpayer has no say in the proposed consent term.
He rejected arguments that a different situation applied in the third case because the defendant who made the settlement was the HSE, a State Party.
In this case, a man sued his brother’s tiling company and the HSE after falling at the HSE premises while working for the company, which is no longer in business and does not appear to be be assured.
The HSE decided to buy out the litigation risk by agreeing to a “relatively modest” settlement – compared to the normal damages and costs of the High Court – for reasons such as the alleged primary responsibility for the accident on the HSE. ‘business and contributory negligence issues.
Most of the settlement would go to the man’s legal fees, Judge Twomey noted.
The man had received state benefits in the amount of approximately € 42,000 and for his part, as well as the HSE, wanted the court order to include a clause which would have the effect that the DSP does not recover not this amount with the HSE.
This means that the taxpayer would subsidize the HSE by paying a small amount to the man, but mainly for the payment of legal costs, the judge said.
The court could not presume, as the HSE argued, that such an order was in the financial interest of the state, he said. The fact that both the HSE and the DSP were state bodies was not sufficient to distinguish this case from its finding that such conditions of consent should not be included in a court decision.