Good news for motorists in Setanta ruling

THERE was good news for motorists yesterday when fears that their insurance payments could jump by up to €50 next year were allayed.

The Supreme Court ruled that motor insurance firms aren’t liable for outstanding compensation claims after the collapse of Setanta Insurance.

Setanta was wound up in April 2014, leaving a sea of unpaid claims in its wake.

The majority verdict from the highest court in the land ends a lengthy legal battle, and will see the State’s Insurance Compensation Fund foot the bill instead rather the industry-operated Motor Insurers’ Bureau of Ireland which was set up to compensate victims of road traffic accidents caused by uninsured drivers.

The liquidator of Maltese-registered Setanta, which sold insurance policies exclusively in Ireland before it collapsed in 2014, has determined the cost of claims could run to about €90million with the number of claimants estimated at 1,750.

In a judgment supported by five of the Supreme Court’s seven judges, Mr Justice Donal O’Donnell said the court had to interpret the ‘ambiguous’ terms of the agreement made between the Motor Insurers’ Bureau of Ireland (MIBI) and ministers for transport over a number of years from 1955 to 2010. Justice O’Donnell said that on balance, he had come to the conclusion that the MIBI’s insistence that it should not compensate victims of drivers with insolvent insurers was correct. He said it was more ‘plausible’ that the Department of Transport and the MIBI had intended that the agreement was only intended to cover uninsured and untraced cases.

He noted that his judgment would benefit insurers at the expense of victims, as there would be a limit on the amount road traffic victims of Setanta drivers could recover from the State’s fund.