Motorists who may be liable for part of awards following Setanta collapse to have cases heard

This was so the court could first determine issues over whether lawyers who have been representing both the drivers and Setanta, as their insurer, can cease representing them because of what the lawyers says is now a conflict of interest.

High Court President Mr Justice Peter Kelly said he was prepared to grant an adjournment in four cases in which liability for the accidents had already been conceded and which will only be before the court for assessment of damages. They were due to be heard in February but will now take place in April.

In the meantime, the court will consider the applications by lawyers for the Setanta clients to "come off record" because of the conflict of interest in representing both named individual clients and the insurer itself in the context of the expected shortfall between the company’s assets and the amount of claims.

As those solicitors are effectively defending the cases on behalf of the insurer, that raises issues for the defendant motorists, some of whom have consulted their own solicitors.

The liquidator of Setanta, who has estimated the cost of an estimated 1,750 claims could be €90m, had earlier this month said it was likely the insured motorists could have to meet some 22 per cent of any award made against them. This was based on an actuarial analysis of Setanta reserves last June.

This was because the State’s Insurance Compensation Fund (ICF) will only pay 65 per cent of awards. It follows a Supreme Court ruling last year in which it was found that the Motor Insurers Bureau of Ireland, which compensates victims of uninsured driving, would not be liable for 100 per cent of the Setanta awards.

The outstanding 35 per cent would fall to the insured motorist but, taking Setanta’s reserves into account and the costs of dealing with the claims, this dropped to 22 per cent.

Mr Justice Kelly was told to dat that the liquidator now believes the amount which Setanta-insured motorists could be as low as 13 per cent, although this was still not clear due to a number of factors, including whether claimants were prepared to accept lower settlement figures in cases which did not go to trial.

After asking whether there was any likelihood that the State, through the ICF, would fund the shortfall, Emily Egan McGrath BL, for the liquidator, said her client did not have any information about that or whether it might happen.

Ms Egan McGrath urged the judge to adjourn the hearing of the cases so that the representation issue could be dealt with first.

Lawyers for the plaintiffs in the four cases opposed the adjournment pointing out the accidents, in which their clients were injured, dated back to 2010 and 2011. They were anxious to get their cases on.

Mr Justice Kelly said he had sympathy for the plight of the plaintiffs but the question over representation should first be dealt with. He also said in other cases - there are some 350 Setanta-related claims before the High Court - defendants should be notified of the application by solicitors to cease representing Setanta.

Those defendants, who had lawfully taken out insurance policies with Setanta, were blameless in all this but they should be given the opportunity of being heard by the court in circumstances where they could be made personally liable for part of any awards in the cases against them, he said.