ESB made no financial provision for loss in flood claims
The ESB made no financial provision for claims arising out of the 2009 Cork flood because it didn’t think that University College Cork’s (UCC) appeal to the Supreme Court would be successful.
The company is now facing a huge damages bill after the Supreme Court ruling that it was negligent in relation to the significant flood damage to UCC buildings during the catastrophic flood which swamped Cork city in November 2009, with almost 400 other cases pending.
The company has been warned that if it's insurance doesn't cover the full cost of damages, it should not seek to recoup those costs by increasing customer bills.
Affected residents have called on the ESB to devise a full and fair compensation scheme and to do so quickly.
UCC pursued a legal action against ESB in the High Court seeking recovery of €19m for property damage caused to its estate arising out of the flood on November 19, 2009.
The High Court ruled in 2015 that the ESB was 60% liable and that UCC was 40% contributory negligent. Both sides appealed the judgement.
In March 2018, the Court of Appeal held that the flooding damage to UCC’s buildings arose from a natural event, and that the ESB was not responsible. Both sides appealed that judgement to the Supreme Court, which heard the case in July 2019.
In its ruling, the Supreme Court held ESB liable, opening the floodgates to the other claims.
The Supreme Court appeal was among one of the “significant issues” which were being considered by ESB’s audit and risk committee throughout last year.
In its 2019 annual report, published last February, the company said as well as the UCC claim, ESB has been served with 388 sets of proceedings relating to the flood event.
It said the details of amounts claimed have not yet been received and a reliable estimate of the cost wasn’t possible pending the Supreme Court ruling.
“However, ESB does not anticipate that the total amount of damages awarded, if any, and related costs for all of the actions, including the Aviva/UCC action, would exceed its applicable insurance cover,” it said.
“On the basis of the internal and external legal advice received, and as the only ongoing appeal is by UCC (which ESB does not believe will be successful), no provision has been made for such claims in the financial statements.”
The company declined to comment further yesterday.
Barry Keane, who spoke out for the flood affected Mardyke residents in 2009, described the Supreme Court decision as a great result.
“Logic has finally won out over an arrogant dismissal of any negligence on behalf of ESB as can be seen from their 2019 annual accounts which sets out their position,” he said.
“We were fortunate that UCC had the financial muscle to take them on as there was no way of the ordinary person taking the case such were the costs involved."
