OVER FIVE YEARS ago Anne* was involved in a car accident.
Everything seemed fairly routine at the time: a car hit the back of hers and she then hit the vehicle in front of her. The accident happened in Dublin 4 in summer 2012. The driver who crashed into Anne’s car was covered by Setanta Insurance at the time.
“I was in a lot of shock initially when it happened, I had to be helped out of the car. There was a severe bang, I hit the car in front of me,” she recalls.
Anne, who is in her 50s, felt pain in her neck, shoulders, back and right leg after the accident.
When she visited the doctor, she was referred for an MRI scan. She was told she had soft tissue injuries in her pelvic area and her neck and shoulder-blade area, a labral tear in her right hip-joint and a bulging disc in the base of her spine. She also had whiplash.
In the following weeks, Anne says she experienced “pain almost all the time, to varying degrees”.
“When the whiplash injury was affecting me, I could not move my head without pain and I sometimes found it difficult to breathe because of the pain in my shoulder blades.”
Anne tells TheJournal.ie the pain in her lower back and tailbone was “excruciating”. ”I received several cortisone injections to manage it, some worked for a few months and some were not as effective,” she recalls.
As well as being self-employed, Anne worked two days a week as an accountant in Dublin. In August 2014, the pain became too much and Anne went on indefinite sick leave.
‘Debilitating pain’
“It was October 2015 when my world began to crash around me,” Anne recalls. At this point, a disc in her back impinged on the sciatic nerve causing “unrelenting, debilitating pain”.
Her first surgery for this was in January 2016. She was also on very strong painkillers which had negative effects.
“I suffered mood swings, drowsiness, confusion, nausea, excessive sweating, breathlessness, huge weight gain and even hallucinations,” she says.
Anne had three more surgeries in a bid to help ease the pain – in September 2016, January 2017 and April 2017.
“I had undergone three surgeries in just over six months. In October 2017, I again began to suffer from excruciating back pain and leg pain.”
At this stage, Anne’s pain specialist said the remaining disc had collapsed and he recommended a rhizotomy. This procedure involves severing nerve roots in the spinal cord with the aim of preventing pain signals travelling to the brain.
Anne underwent this procedure last month but it didn’t work as planned. “To date I have not had any relief. The prognosis is that I will have permanent chronic pain,” she tells us.
The difference in my life before July 2012 and after is like the difference between day and night. This has been a nightmare and continues to be.
She eventually resigned her two-day job in March of this year, at the suggestion of her neurosurgeon. She continues to work part-time from home – for about 20 hours a week – to help bring in some money.
Anne says she’s “out of pocket by over €100,000″ – between lost income, legal fees and medical expenses – and that this figure keeps rising.
Despite her accident happening almost two years before the collapse of Setanta, legal delays meant the case was still ongoing when the company was wound up in April 2014.
Anne has received no money to date from the case. Her case is one of more than 1,500 outstanding claims.
Supreme Court
In May, the Supreme Court ruled that the Irish State must be held liable for the outstanding claims, which could cost in the region of €90 million. The State’s Insurance Compensation Fund (ICF) can only pay out 65% of a claim or €825,000, whichever is less.
The Supreme Court ruling overturned a previous High Court ruling that the Motor Insurers’ Bureau of Ireland (MIBI) should foot the bill. The organisation would have been liable for 100% of claims.
Fianna Fáil’s Finance Spokesperson Michael McGrath is one of the politicians who has been raising outstanding Setanta claims in the Dáil.
“In recent weeks we have learned that the liquidation process will only cover 22% of the value of outstanding claims leaving a significant portion of compensation left unpaid by both the liquidation and the Insurance Compensation Fund,” McGrath says.
He states that “no clarity has been provided for both claimants and former policyholders” since the Supreme Court decision over six months ago.
Speaking to TheJournal.ie, McGrath says: “My real fear for the Setanta policyholders and claimants is that this nightmare will just roll on and on for years to come. It is impossible to know how long the liquidation process will take and the government is showing no willingness to get involved in any meaningful way.
We now have the extraordinary situation whereby people who took out a valid motor insurance policy in this State are being told they could be held personally liable for any shortfall in a claim against them. Some people in this situation are genuinely fearful that they could lose their home as a result of this.
“There is a moral obligation on the government and the insurance industry to step in and clean up this mess. Next April will be the fourth anniversary of the collapse of Setanta Insurance and the situation has been allowed to drag on for far too long.”
McGrath says the government’s plan to increase the amount the ICF can pay out on an individual claim from 65% to 100% “will not be retrospectively applied to the Setanta case”.
“In any event, the government hasn’t even introduced this legislation yet so if another Setanta happens – and no one can rule this out – the policyholders and claimants will again be left in the lurch,” McGrath states.
Anne says she can’t get a settlement unless she waives the 35% not covered by the ICF. ”It’s a roll of the dice – fingers crossed you’d get the money, but you may not,” she says.
“I’m not going after someone’s house and mortgage to get the 35%. It was a person in a company car from a very wealthy company (that crashed into me). It’s not a poor innocent civilian who was caught up by it.”
Anne says the situation is being handled by solicitors and she has had no direct contact with Setanta’s liquidator Deloitte or any other involved parties.
“There’s a big black hole out there that you can’t get any answers from. Things are moving at a snail’s pace and the money is dwindling,” she states.
Spokespeople for Deloitte and the MIBI said that neither organisation was in a position to comment.
When asked for a comment, a spokesperson for Insurance Ireland said the organisation “welcomed the decision of the Supreme Court as the Motor Insurers’ Bureau of Ireland was never designed to address the liabilities of an insolvent insurer”. ”Insurance Ireland accepts the decision of the Supreme Court as final,” they added.
Should the insurance industry pay out?
Speaking to TheJournal.ie, former Law Society of Ireland President Stuart Gilhooly describes the current situation as “very unfortunate”.
“We’re left with the situation where 35% of the compensation and indeed the costs are not being paid. There’s a large collection of people who are not going to recover all the money they’re owed.”
Gilhooly notes that some people are owed up to €200,000 to date.
“They may eventually get 20% or so from the liquidator, but even that would be in four or five years’ time,” Gilhooly says, adding that the liquidator won’t be paying out until every single claim has been dealt with.
He says some former policyholders are left dealing with “huge hardship” through “no fault of their own”.
In its court case, the Law Society had argued that the MIBI should cover this cost, noting the organisation paid out on an ex gratia basis (done from a sense of moral obligation, rather than a legal requirement) when Equitable Insurance Company entered liquidation in the 1960s.
Gilhooly estimates it could cost up to €40 million to pay the 35% of claims not covered by the ICF.
€40 million in the grand scheme of things is not that much, at least it would mean that blameless policyholders and claimants would get their money.
He says the insurance industry have “already charged for it” in recent years, citing the insurance premium hikes the industry have said are partially due to the Setanta fallout.
Writing in the Law Society Gazette earlier this year, Gilhooly said the industry “scandalously used the entire debacle to excuse their egregious increase in premiums”.
He says an alternative to the insurance industry footing the bill would be for the government to step in, noting it could be reimbursed by the liquidator further down the line.
Gilhooly says the Setanta claimants will be the only road traffic victims in the history of the State to receive less than 100% of their compensation, as the government has committed to changing the law in this regard. He has written to Finance Minister Paschal Donohoe about the situation.
In his Supreme Court judgement in May, Justice Donal O’Donnell wrote that the provisions of the MIBI’s agreements with respective Ministers for Transport between 1955 and 2009 are “ambiguous and their interpretation is to some extent also dependent on perception”.
To an innocent party whose claim succeeds but who does not receive compensation, it is a matter of irrelevance precisely why an insurance policy is not available to cover the claim or all of the claim, and accordingly entirely sensible that a provision, in this case in the shape of an agreement with the motor insurers, should provide a safety net which ensured that injured claimants were not left uncompensated.
“From the perspective of a motor insurer, there is however a very significant difference between the industry accepting responsibility for compensation of claimants whose injuries are caused by an uninsured (or untraced) driver as a result of an accident, and on the other hand accepting liability for injuries caused by drivers who have insurance policies with a company which has become insolvent,” O’Donnell wrote.
‘Complex’ situation
When McGrath raised the issue in the Dáil recently, Donohoe said the uncertainty that followed the collapse of Setanta “highlighted weaknesses in the existing insurance compensation framework in Ireland”.
Donohoe said estimating the number of former policyholders that could be made personally liable for outstanding claims is “complex”.
“This is due to a number of issues, for instance there may be still ongoing disputes around liability between the policyholder and the third-party claimant, and in some instances, there may be more than one claim against a single policyholder which means that the active claim figure may not equate to an equivalent amount of policyholders,” he said.
The minister noted that 573 claimants have been paid compensation from the ICF to date, subject to the 65%/€825,000 limits.
When asked for a comment, a spokesperson for the Department of Finance told TheJournal.ie the minister “accepts that this is a difficult position for all parties to this process”.
They added that the department is “aware of the issue regarding the potential liability of Setanta policyholders to third-party claimants in the event that those claimants do not receive full compensation”.
“This is a legal matter for the third-party claimants to make a decision on, and the Minister for Finance has no direct role in such a decision.”
The spokesperson said the suggestion that the minister should intervene, through the ICF, to meet the third-party claimant shortfall in full (the 35% over and above the 65% paid by the ICF) and recover what is owed to the claimants (currently estimated at 22% of the value of the claim) from the Setanta liquidator isn’t the best way forward.
“By going down this route and stepping into the shoes of the claimants, there is a legal concern that the ICF would have a lower position in the hierarchy of creditors than the claimant and, as a consequence, it would recover very little if anything from the liquidator.”
The spokesperson added that the department “sought Maltese legal advice on the impact on the ICF’s ability to recover from the liquidated company under Maltese law if it were to compensate third-party claimants for the balance due to them”.
The advice from the Maltese law firm has been reviewed by the Office of the Attorney General, who have written to the Department in recent days. This legal advice will be used to inform the ongoing examination of options for consideration by the Minister in the new year.
The Review of the Framework for Motor Insurance Compensation in Ireland was completed in June 2016 and was approved by the Ministers of Finance and Transport. Its key recommendations were as follows:
Effect on Anne’s family
Anne is married and has three adult children. She says the impact of the accident has also had a huge effect on them.
“I have had to look at the pain in the eyes of my husband as he looked at me when I was in agony, and he couldn’t help. I have seen my daughter leave the hospital in tears because it hurts so much to see her mother in such pain.”
Anne says she is often reduced to tears herself and sometimes has to sit at the bottom of her stairs or give up on climbing them entirely because the pain is too much. She says, despite the chronic pain, she is in a better place psychologically than she was a couple of years ago.
“The lack of work at the time wasn’t an emotional factor, it was the constant pain that had the huge psychological effect.
I mean it was excruciating pain. It was horrendous emotionally, I remember telling my husband I can’t take much more than this. I had very many dark nights of the soul.
Anne says she “definitely” contemplated suicide at one point, noting: “I felt it would be easier to end it all.”
She says the medication she’s on now is helping keep her pain under control but she can’t stay on it indefinitely. ”I am in excruciating pain when I’m not on [the tablets] but they are very strong and addictive so I can’t stay on them long-term.”
‘I’m not the same person’
Anne could have a spinal fusion but it may not be successful and she doesn’t want to go down this road if possible.
“I’m holding out for as long as I can as it’s a very serious surgery and there’s no guarantee it will work … I likely will have chronic pain regardless.”
Anne says the surgery would take around five hours and leave her “completely out of work for six months”, further impacting her income.
The accident has impacted me physically, emotionally and financially. I worry terribly about what the future holds for me.
“I’m not the same person I was before the accident. The life I had before the accident, I can never see myself having that again.”
Anne says, despite everything that has happened to her, “it could be a lot worse”.
Between her husband’s income and the money she’s able to bring in by working part-time she’s “financially still okay”, noting that some people caught up in the Setanta situation are likely much worse off and “might be about to lose their homes over this”.
“I’m helped by the small bit of income I can earn myself, I don’t know how the government expect us to keep living. I’ve lost a huge amount of money, but I’m grateful I can survive and still live a relatively decent life. A lot of people aren’t as lucky,” she says.
*Anne’s name has been changed to protect her identity
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