# Personal Injury Claim - ex employer has no insurance



## Happy Girl (21 Oct 2015)

A friend of mine has a personal injury claim against an ex employer for a pretty serious accident at work some time back. He went through the PIAB system and as his ex employer would not respond to any PIAB correspondence over a period of almost 12 months he was advised that they (PIAB) were issuing an Authorisation to proceed to legal proceedings which he duly did. The ex employers are not responding to any of his solicitor's correspondence and have still not nominated a solicitor. Now my friend's solicitor has been advised that the ex employer's insurance company is "declining indemnity" and he is being told that if the company were wound up then he would have difficulties in recouping any monies in circumstances where there would be no insurance company to back up any award. We are wondering if there is any equivalent in my friend's personal injury situation to MIBI who provide insurance backup in the event of claims against non insured drivers


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## Brendan Burgess (21 Oct 2015)

Happy Girl said:


> We are wondering if there is any equivalent in my friend's personal injury situation to MIBI who provide insurance backup in the event of claims against non insured drivers



No, there isn't.


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## Happy Girl (22 Oct 2015)

Thank you for that Brendan. If he were awarded a claim by the courts would he be deemed a creditor of the company if it were to be wound up


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## thedaddyman (22 Oct 2015)

The directors and managers of the company in question can be criminally prosecuted and may be personally liable if they were found to be in breech of Health and Safety legislation. Obviously it would depend on the circumstances but there may be merit in having a conversation with the HSA and PIAB to see if a prosecution is feasible and needed. At worst, such a move might get the companies attention.


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## Jim Stafford (22 Oct 2015)

He should seek legal advice on his claim.  For example, if he was injured by a defective piece of machinery, he might have a claim against the manufacturer of the machinery.

If your friend obtained a judgment against the company he would be categorised as a preferential creditor.  Preferential creditors receive payment before  unsecured creditors.  Your friend would have to assess if the company had sufficient assets to pay a dividend to preferential creditors in a liquidation.


Jim Stafford


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## DirectDevil (22 Oct 2015)

This may not help but in view of the seriousness of the injuries any avenue is worth exploring.

Unfortunately, your friend is not a party to the contract of insurance. Therefore, he has no rights / privity in contract against the insurers who are reportedly refusing indemnity. However, if it still exists, section 62 of the Civil Liability Act 1961 might help.

Link to S. 62. http://www.irishstatutebook.ie/eli/1961/act/41/section/62/enacted/en/html#sec62

The idea behind S. 62 is that if the policyholder [the employer in this case] was to be wound up the proceeds of the policy would go to the claimant rather than in to the assets of the company being wound up. AFAIK this is the only Irish equivalent to the UK Third Party (Rights Against Insurers) Act of 1930.

The problem with this case is that if the insurers are refusing indemnity to the employer there will probably be no liability on them to pay the employee if the company winds up. If S. 62 is interpreted in the same way as the UK act of 1930 the employee will have no better rights against the insurers than the policyholder. I think that there may have been some cases relating to S. 62 but the law is unclear. See Browne -v- Norwich Union & Anr for an example. Link http://www.bailii.org/ie/cases/IEHC/1985/1985_IEHC_8.pdf

Your friend's solicitor needs to try and crack in to the issue as between the employer and insurer to try and assert some rights with a view to making a S. 62 application if that section still exists. This might involve an application for discovery. Sounds like it will be a far fetched exercise but worth considering to see if it can be explored given what seems to be at stake.

BTW there is also the possibility that the employer is just a bare-faced liar and just wants to obstruct your friend's case for reasons of self-interest. The employer is the only one giving the insurance information which nobody seems to have verified independently.


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## Happy Girl (22 Oct 2015)

Thank you so much to everybody for replies. Just to clarify it was the insurance company who stated that they are "declining indemnity". The ex employer has not responded to any correspondence sent by my friend's solicitor and have not nominated a solicitor either as was requested.


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## Happy Girl (22 Oct 2015)

Under what circumstance might an insurance company "decline indemnity" in personal injuries claims such as this.


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## DirectDevil (22 Oct 2015)

There are a great number of reasons for refusing indemnity. The insurers will know but are probably not going to say which is why your friends solicitor needs to get cracking !


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## Ravima (23 Oct 2015)

If Policyholder did not comply with Policy conditions, then Insurers can decline indemnity. As there is no compulsory Employer Liability insurance in Ireland, then unless Policyholder successfully arbitrates, Insurer will stand back.  Your friend and/or his/her solicitor has no right against Employer, nor can they force them to arbitrate either. Naturally, there is no point in arbitrating if the Insurer's reasons are very clear cut and there was a very clear breach of Policy conditions.


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## Happy Girl (23 Oct 2015)

It would appear to be pretty clear cut then for him. It seems terrible and dreadfully unfair that his employer cannot be held responsible for the dreadful accident that happened my friend and that it is the injured party who is the only one who loses out.


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## Ravima (23 Oct 2015)

Just because insurer will not indemnify does NOT mean that employer is not liable. They are two very different matters. Perhaps employer could afford to pay compensation?  If they are his ex employers, then what has he to lose by not making a claim? Talk to a friendly personal injury solicitor who will guide him.


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## Happy Girl (28 Oct 2015)

If the company is a limited company does that not mean that the owners cannot be held liable?


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## DirectDevil (29 Oct 2015)

Happy Girl said:


> If the company is a limited company does that not mean that the owners cannot be held liable?



The limited liability entity is it's own owner in effect  i.e. the limited liability company is a distinct legal entity possessed of the legal capacity to sue and be sued in it's own name and in it's own right.

The "owners" are separate legal entities. By "owners" I take that you mean the effective controlling minds such as the directors but that could also mean shareholders. 

Assume ABC LTD is owned by X, Y and Z. Say that X, Y and Z are the sole directors and sole shareholders. Generally, they would not be vicariously liable for the negligence of the company. However, because of the nature of a limited liability company it acts through it's servants and agents and their negligence is usually imputed to the limited company vicariously.

It is possible for a negligent employee or "owner", as conceptualised above, to have a personal liability on the facts but we don't know enough about the case to comment further on that. Say that Mr. X is a working director and does something negligent like driving a fork lift truck in to an employee. Mr. X is personally liable for his own negligence and ABC LTD is vicariously liable for his negligence.

So, in summary, I think that the answer to your question - as worded - is that "owners" would not be expected to have a personal liability. However, that is a general observation based on very limited information.  

Your friend really should get this sorted out promptly by his solicitor. It might be worth getting a preliminary opinion from counsel given that there seems to be a lot at stake. Ultimately, a decision is going to have to be made soon to proceed or not and that means gambling on whether or not the company will wind up.


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## Happy Girl (3 Nov 2015)

Thank you DirectDevil for going to the trouble with such a detailed response. My friend has been with his solicitor who advised that proceedings have just been served on the company itself and they have to be given a reasonable time to respond (4-5wks). After that they will be given a 21 day notice to respond so this is going to drag on. My friend has been asked to see if he can ascertain the financial ability of the company to pay if an award was made to him. He has obtained the company's last accounts but really isn't sure what to look for in them that would show ability to pay and unfortunately I am no help to him either.


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## DirectDevil (5 Nov 2015)

Happy Girl said:


> Thank you DirectDevil for going to the trouble with such a detailed response. My friend has been with his solicitor who advised that proceedings have just been served on the company itself and they have to be given a reasonable time to respond (4-5wks). After that they will be given a 21 day notice to respond so this is going to drag on. My friend has been asked to see if he can ascertain the financial ability of the company to pay if an award was made to him. He has obtained the company's last accounts but really isn't sure what to look for in them that would show ability to pay and unfortunately I am no help to him either.



You are welcome. I am glad to see that the matter is actually proceeding in the right direction. Good luck to your friend.


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