In June 2014, Mr. Justice Hedigan of the High Court found that an Insurer was liable to pay the entire costs of a successful Plaintiff and a Co-Defendant for defending a personal injury action where the Insurer repudiated a policy of insurance held by their insured nearly two months before the trial of this matter. ¹
The Court held that “Insurers should remain vigilant where circumstances are present which could cause Insurers to repudiate cover.
It is clear that Insurers are not entitled to rely on statements of assertions of insureds in the absence of a thorough investigation.”
The Court further held that the Plaintiff and Co-Defendant were lulled into a false sense of security on the basis of the insurance position of the homeowners and that therefore the Insurer was obliged to cover the costs of the Plaintiff and the Co-Defendant in defending the entire action.
Ms. Berney suffered an injury when she tripped on the footpath outside the Defendants’ home. Although the Defendants had mislead the Insurer by telling the investigator that they did not have any work done on the footpath when the evidence was to the contrary, the company could have ascertained the true position via a thorough investigation. The Plaintiff, who lives down the street from the couple, tripped on a lip created when a ramp was built into a second entrance to their home during extension works in 2010.
In 2012, the Plaintiff issued proceedings claiming damages against South Dublin County Council, as the responsible authority for roads and footpaths for injuries she received in the fall. The Plaintiff also sued Mr. Gallagher and Ms. Hutchinson when the Council lodged a defence pleading that the couple carried out work on the footpath without its knowledge or consent.
The Insurer repudiated liability on behalf of the couple after it learned, when proceedings were under way, they had had work done to create an entrance into a driveway and last January also withdrew its legal representation for the couple. Last March, Mr. Gallagher and his wife were found liable for damages.
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¹ Elizabeth Berney v Dublin City Council, Des Gallagher and Emma Hutchinson (2014) 6 JIC 502