The Setanta car crash: what about injured parties?

The collapse of Setanta Insurance is not just a shambles for policyholders. They, at least, could arrange new insurance and at worst lost only the unexpired value of their policy. But what about someone injured in a road traffic accident cause by a Setanta policyholder?

The situation remains murky. Information available from the Central Bank and other sources initially referred to the Irish Insurance Compensation Fund. Calling on the ICF for all claims involving Setanta would put further pressure on the Fund but also be significantly unfair to injured parties, as it only pays out 65% of a claim or €825,000 (whichever is lower). For example: a claimant for €1.5 million would only get €825,000 from the ICF; a claimant for €100,000 would only get €65,000.

In the aftermath of the news solicitors obviously reviewed their personal injury files for claims against Setanta and, in the case of such claims, look for another source of cover. The prospect of involving the Motor Insurers’ Bureau of Ireland immediately arose. The gut response is that MIBI was set up to cover claims against uninsured or untraced drivers, whereas the ICF was set up to cover insolvent insurers. Surely a claim against Setanta “belongs” with the ICF?

The MIBI agreement is poorly worded at the best of times but in this situation perhaps for the better. The agreement says that if an award which should be covered by an approved policy of insurance is not paid in full within 28 days then, whether or not insurance actually was in place, MIBI will pay it. This interpretation is supported by guidance from Insurance Ireland, the industry body, which says that awards not honoured by Setanta should be referred to MIBI who would pay out and seek to recoup funds in Malta, where Setanta is regulated.

On 1 May 2014, the Minister for Finance stated in the Dáil that

The Motor Insurance Bureau of Ireland [sic] (“MIBI”) have indicated that they intend to accept all third party claims in connection to Setanta policies.

The minister responsible for the agreement with MIBI is the Minister for Transport. The Department of Transport has not had much to say about Setanta to date but the Minister for Transport was asked in the Dáil on 8 May 2014 how MIBI would handle Setanta claims. He responded:

The arrangement MIBI puts in place for dealing with the Setanta claims is a matter for the MIBI itself under the terms of the Agreement. I will arrange for the Deputy’s question to be forwarded to the MIBI for them to respond directly to her.

This does not go so far as confirming that MIBI will, in fact, be covering Setanta claims. The question asked of him is important because when a claim arises from an uninsured driver MIBI is sued alongside the defendant (or as the sole defendant if the driver is untraced), whereas the obligation to pay out on foot of an award which has not been honoured by an insurance company is different. There are likely to be a number of cases where a claimant has already sued the other driver but might now be statute barred as against MIBI, if required to join them. However, in that situation one would assume that MIBI should not necessarily be sued as a co-defendant. But the Law Society advises that claims against Setanta be notified to MIBI in the same manner as uninsured/untraced driver cases. This would involve MIBI being sued alongside the driver.

The Irish Brokers Association got a legal opinion on the situation but really it goes no further than to summarise the ICF and MIBI regimes and state that “recent Dáil comments indicate the MIBI scheme may be available in the context of Setanta.”

What has been the response of MIBI to such notifications? I received my first this morning.

Paul Merceica has recently been appointed as liquidator of [Setanta Insurance] and will be responsible for the administration of the Company’s assets and liabilities … You may also wish to refer to the website of the Malta Financial Services Authority for further information …

This is an update about the liquidation of Setanta Insurance, not about how MIBI will deal with Setanta claims made against it. [As an aside: good luck trying to get a substantive response from the Setanta contact centre.] The only relevant response was as follows:

At this point we cannot confirm our position.

Accordingly, how can it be said with certainty that MIBI will voluntarily meet Setanta third party claims? And who is in charge?

In relation to the wider problem with Setanta, David Murphy has a great post on the RTÉ Business blog which highlights a significant fact:

The Central Bank became aware that there were problems in Setanta late last year, it was still permitted to sell insurance policies until it the end of 2013 and went bust last month.

While a customer of Setanta with the foresight to see the writing on the wall had the option of switching cover before the appointment of a liquidator and getting a refund of part of their policy, someone with a claim against Setanta had whether or not they got their money out largely depend on lucky timing.

Service of court documents by social media in Ireland

In recent years there has been a steady flow of stories about the service of court proceedings using Facebook or Twitter, for example. The media likes the novelty of these stories but there is no new law involved.

Certain court documents, particularly those which initiate a case or give notice of a hearing, must be served on the other party. The importance of service is not necessarily that the recipient is aware of the full contents of the documents served or every detail of the case. Rather:

the fundamental purpose of service [is] to give the defendant notice and sufficient warning of the proceedings that he might have to contest. (Dixon J, Royal Bank of Ireland Limited v. Nolan)

Here are some examples of service by social media:

  • In 2009 the UK High Court allowed service of an injunction by direct message on Twitter where the message included a link to the full text of the injunction.
  • In 2011 a UK county court allowed service of a court document by Facebook.
  • Australian courts have allowed service by Facebook and LinkedIn.
  • In 2012 a South African court allowed service of a notice to set down a trial by Facebook message, in addition to being published in a newspaper.
  • In 2012 the UK High Court allowed the service of a commercial claim by Facebook (AKO Capital LLP & another v TFS Derivatives & others [2012]).

AKO Capital is a good example because some detail is available from a note on the case by Latham & Watkins. This was a claim against a financial services broker for alleged overcharging and the broker wished to join a former employee as a co-defendant. Before granting permission for service by Facebook the Court sought assurances that the account belonged to the recipient and that he habitually checked the account. For example, evidence was given that he had recently accepted friend requests. The Court ordered that the relevant documents could be sent as pdf attachments to a private message and service was deemed to have occurred 14 days after the message was sent.

On the home front, Mr Justice Peart granted an order for service by private message on Facebook in 2012 where the plaintiff was not able to locate an address, contact number or other means of contact for the defendant apart from his Facebook account.

You’re not doing anything until the solicitor gets here.

This topic surfaces in discussions of “social media law” and similar areas of law, which brings to mind Frank Easterbrook’s “law of the horse” analogy from the mid-90s.

Lots of cases deal with sales of horses; others deal with people kicked by horses; still more deal with the licensing and racing of horses, or with the care veterinarians give to horses, or with prizes at horse shows. Any effort to collect these strands into a course on “The Law of the Horse” is doomed to be shallow and to miss unifying principles. Teaching 100 percent of the cases on people kicked by horses will not convey the law of torts very well. (Easterbrook FH, ‘Cyberspace and the law of the horse’ 1996 U Chi Legal F 207)

Service by social media is just another form of substituted service. Most court rules internationally require that court documentation is served in a particular form, such as by personal delivery or registered post, but also provide that alternatives can be used with the permission of the court. Irish court rules provide for such “substituted service” and nothing in those long-standing rules limits the potential for service by social media.

There are separate but similar rules for each of the Irish courts (District, Circuit, High & Supreme) which provide that an application can be made to the relevant Court for service in an alternative manner where there is a reason why the usual manner cannot be used.

Like many areas of the law, new scenarios can work with old laws and no update is required. However, as can be seen from the evidence presented by the applicant in AKO Capital, the affidavit which grounds the application for substituted service should include more detail than would ordinarily be the case in a standard application. At the very least the Court should be provided with:

  • details of the difficulties in affecting service in the ordinary way and what efforts have been made to do it;
  • evidence to establish that the target social media account is owned by the person upon whom service is to be effected;
  • evidence to establish that the social media account is active within a reasonable period of the application; and
  • details of any relevant technical issues and how they will be addressed (for example, if service was by Twitter direct message, how documents will be accessed by the recipient).

Recent experience in the US suggests that some jurisdictions might not allow service by Facebook alone, for example. The rules in the US states are different from those in Ireland and certainly there is no reason why service in Ireland cannot be effected by Facebook alone, subject to the Court being satisfied on the criteria listed above. If there was a concern about the effectiveness of service, an Irish court could direct some other additional mode of service, as happened in the South African case mentioned above.

The issue of service frequently arises as a potential technicality to defeat proceedings but the Courts can retrospectively deem service to be effective, as can be seen from this reason Supreme Court decision.

Hanging on the telephone – has anyone got it right on the new ban on text driving?

[Updated 1/5/14] The ban on texting while driving comes into effect tomorrow (1 May 2014). There has been some confusion about what exactly it prohibits but the best advice, from a practical and legal point of view, is simple: don’t use a mobile phone while driving.

Texting While Driving

Holding a mobile phone while driving was prohibited by the Road Traffic Act 2006. The Act allowed the Minister for Transport to introduce regulations restricting or prohibiting the use in vehicles of mobile phones, in-vehicle communication devices, information equipment or entertainment equipment. Minister Leo Varadkar has now done so in respect of what can loosely be called “texting”.

The 2014 Regulations prohibit sending or reading text messages while driving. There appears to be much confusion about this new law. It bans reading and sending texts while driving and clarifies that:

  • a “text message” includes an SMS, MMS or email;
  • “read” includes access or open, but not by voice-activation;
  • “send” includes compose and type “but does not include anything done without touching the mobile phone”.

There is a peculiarity in the difference in language between “read” and “send”. The former uses the phrase “voice-activation” and the latter “without touching the mobile phone”. The 2006 Act (the parent legislation of the Regulations), however, uses the phrase “hands-free device” which is one “designed so that when used in conjunction with a mobile phone there is no need for the user to hold the phone by hand”. The 2014 Regulations should be consistent with section 3 of the 2006 Act and it would have been better to use the phrase “hands-free device”.

(As an aside: the 2006 Act defines “hold” as meaning “holding the phone by hand or supporting or cradling it with another part of the body”, so the various contortions drivers sometimes resort to are pointless.)

The peculiarity in the language of the 2014 Regulations appears to me not to account for how phones are used. For example, you could read a message by voice activation by requesting Siri to read a message. However, to activate Siri you must press a button either on an iPhone or a built-in Bluetooth system. In the case of the former, therefore, the user must touch the mobile phone. Do the 2014 Regulations allow this for reading a message but not for sending one? Voice activation systems generally require at least one button to be pushed before being used. It does not necessarily mean that this will be a fruitful source of technical challenges, but it is inconsistent.

You might be inclined to think that the repeated use of the phrase “mobile phone” limits the law, but the 2006 Act defines a mobile phone as “a portable communication device, other than a two-way radio, with which a person is capable of making or receiving a call or performing an interactive communication function”. So, the legislation appears to cover a tablet with a sim card, for example.

The 2006 Act provides two defences: using the phone to call emergency services or acting in response to a genuine emergency.

[Updated] Media reports about the law are confusing. This morning (1/5/14) I heard various radio reports that the law prohibits “accessing information using a phone” (it’s not that wide) and sending a text message, even using a handsfree kit (it doesn’t appear to). The confusion is compounded by this explanatory note from the Department of Transport (brought to my attention by Steve White in a comment below). It says:

These regulations apply to mobile phones which are not being held, i.e. to hands-free devices.

This is not quite correct – the Regulations apply to any communications device which fits the definition of a “mobile phone” in the 2006 Act. The reference to hands-free devices is significantly confusing – the Regulations appear to allow the use of handsfree devices, but this note says the Regulations apply to them. What I assume the Department means is that the Regulations apply to the use of mobile phones when not being held. The note goes on to compound the confusion:

Contrary to some misleading media reports, they do not make it an offence to speak via a hands-free device. Nor do they make it an offence to touch a button on a hand-free device in order to answer a phone call.

The penalties involved are a source of confusion, to me at least. Reports by the Irish Times and RTÉ refer to fines of €1,000 for a first offence and €2,000 for the second as well as a possible jail term of up to 12 months. I don’t know where these penalties come from as they are not contained in the 2014 Regulations and section 3 of the 2006 Act does not provide for them. This appears to come from the Departmental note linked to earlier, which refers to these penalties on the basis that the Regulations come under the “general penalty” in section 102 of the Road Traffic Act 1961. Section 102 applies to an offence in the Road Traffic Acts for which “no penalty is provided for the offence”. However, the 2006 Act says that the penalty for holding a phone or other offences made by regulation is a Class C fine (maximum €2,500). Therefore, section 3 provides for a penalty and I do not see how the general penalty in section 102 of the 1961 Act arises.

Holding a mobile phone is a penalty points offence which now results in 3 penalty points on payment of a fine or 5 on conviction in court. (As with all penalty point offences, the judge has no discretion and they automatically follow a conviction.) Texting while driving is not a penalty points offence.

There has been much hand-wringing and concern about whether or not the 2014 Regulations prohibit the use of Google Maps or Hailo, for example. They don’t, but this does not mean that drivers should feel free to use non-texting functions of their phones while driving – holding a mobile phone (which could include a tablet) while driving remains prohibited, whatever the use it is being put to. Moreover, offences of dangerous and careless driving and driving without due care and attention could cover a wide range of bad driving, and could include, for example, driving while zooming in and out of maps on your phone or sending stickers on WhatsApp.

PS: The 2014 Regulations do not apply to “a person to whom section 3(1)” of the 2006 Act applies. Section 3(1) provides for the offence of driving while holding a mobile phone. Section 3(2) exempts Gardaí and emergency services personnel on duty from the prohibition, so I assume the 2014 Regulations are in error and intended to refer to section 3(2).

Objections to the proposed Irish tobacco plain packaging law: an overview

Ireland is obliged by international law to reduce smoking. In the last decade we took the initiative by restricting advertising and sponsorship and introducing a workplace ban. Current Government policy goes much further: a tobacco free Ireland in 11 years. The next step toward that goal is to remove branding from tobacco products, just as the Australians did two years ago. The Oireachtas Joint Committee on Health and Children is considering a law that would make all cigarette packets look the same, containing government notices alone.

The tobacco industry lobbied ferociously against the Australian plain packaging law, but it was passed. They sued the Australian government and lost. They are funding tobacco-producing nations in taking a case to the World Trade Organisation alleging that Australia has breached international law. But intellectual property and trade laws don’t trump health protection. The Australian High Court said that intellectual property is designed to serve public policy as well as private interests. Australia implemented its law to fulfil its commitments under the World Health Organisation convention on tobacco control (FCTC). Ireland has also signed and ratified the FCTC, and while the convention doesn’t strictly require plain packaging laws the WHO encourages them. The Minister for Health’s policy of a tobacco free Ireland by 2025 was announced as an FCTC implementation measure.

The Oireachtas Joint Committee sought submissions on plain packaging and recently held hearings. Unsurprisingly, it received opposition from the tobacco industry. The industry made four core points:

  1. there is no evidence that the law will reduce smoking;
  2. it would breach national and international law;
  3. it would lead to an increase in counterfeiting and
  4. it will damage Ireland’s reputation for protecting intellectual property.

The Law Society made submissions, drafted by its intellectual property committee, which made the very same four core points as the industry, in almost identical terms. They gave no alternative view or guidance on the existence or strength of arguments that could be made against the claims of the industry.

The tobacco industry and the Law Society, of course, have a point: these laws fundamentally restrict intellectual property rights. But intellectual property rights are negative: they allow you to stop others using similar names. They do not, in themselves, give you the right to use them. Trade mark law allows authorities to refuse the registration of a trade mark if the mark is contrary to public policy.

Drug companies cannot advertise directly to consumers in Ireland. Pharmacists are required to suggest generic alternatives to branded products. These regulatory measures challenge the intellectual property rights of drug companies, who also happen to be significant foreign direct investors in Ireland. But the tobacco industry and the Law Society are not equally concerned about the effects of those laws on “Ireland Inc”. They are more interested in trying to gain support from the food industry. The Director General, Ken Murphy, worries that the next target will be Kerrygold. This ignores the obvious point that consumer foodstuffs are not, by their nature, harmful to public health when consumed as intended. This is not the case with tobacco.

All anti-smoking measures introduced over the past two decades restrict and interfere with the tobacco industry’s interests. Most also limit intellectual property rights, particularly their trade marks. “Marlboro Lights” is a registered Irish trade mark, but it can no longer be used because it suggests one product is less harmful than another. Most would consider such a restriction to be reasonable and justifiable.

The tobacco industry and the Law Society argue that plain packaging laws breach international law, in particular the TRIPS and Paris Conventions. This is not a novel legal debate: the Australians have already been down this road and there are copious academic texts and commentaries on the argument. Respected intellectual property academics like Professors Mark Davison and Matthew Rimmer argue the role of international law may be quite limited. They point to the fact that international law does not give the tobacco industry a right to use their intellectual property. It follows that if a government restricts or prohibits the use of branding, it is not attacking a protected right of the industry.

But the Law Society told the Oireachtas none of this.

The spectre of unconstitutionality was even raised by by the tobacco industry and the Law Society, but they give little detail of this argument and reason by analogy to electricity pylons and planning permission. A highly respected member of the Law Society’s own committee that drafted the submissions doesn’t agree – but this view was not put before the Oireachtas.

The tobacco industry and the Law Society all but ignore the public health motivations of plain packaging and fall back on the weak assertion that there is no evidence to justify it. This is, at best, debateable and, at worst, circular. Evidence that the law will work can only be obtained after introduction. Furthermore, the Australian law was based on significant research and was supported by leading health experts. After the law was introduced calls to smoking quitlines soared and the rate of smoking declined. Even supporters caution that it is too soon to know if the law caused that reduction, but the indications are positive.

The tobacco industry and the Law Society are also concerned about counterfeiting because, they say, plain packs will be easier to copy. The argument is nonsense and when the Gardaí and Revenue Commissioners told the Oireachtas that they did not expect an increased workload as a result of a plain packaging law, the Law Society dropped the claim. The argument is also contradictory and the tobacco industry has long maintained that all paper-based packaging is easy to counterfeit. In fact, the most difficult element of packaging to copy is the Revenue stamp, which will still appear on plain packs. As Cancer Research UK point out “The reality is that all packs are easy to counterfeit and that plain packaging will not make any difference.”

Australia is the only country to have introduced plain packaging and it has done so very recently. Firm evidence of the success of the law is not yet available but the signs are positive. There are very convincing arguments against legal objections to such a law, but the Law Society failed to bring them to the attention of the Oireachtas.

Time to end willful ignorance on tobacco packaging and lobbying

Controversy over the submissions of the Law Society on proposed plain packaging law for tobacco products continues.

It seemed, initially, that the Law Society was going to take the concerns raised by myself and a number of colleagues seriously. I was told that certain things would be looked into and a proposal was going before the Council of the Law Society in relation to lobbying. But we were also referred to as a “vested interest” (!) by the President of the Law Society who subsequently dismissed our views as “conspiracy theories” and has effectively refused to look into the issue any further.

A member of the Council of the Law Society has written an article which is distinctly dismissive of our concerns, despite the following admission:

it’s important to note that what this column knows about IP law could be written on the back of a plain cigarette packet with room for several “SMOKING KILLS” reminders, so we are not taking sides here

When they appeared before the Oireachtas Joint Committee on Health & Children, the President and Director General were also at paints to point out that IP was not an area they specialised in. The problem with the submissions is that if they are examined with any reference to people who do have knowledge of IP law it is plainly obvious that the submissions do take sides.

So it is useful to add to the debate a contribution from Dr Matthew Rimmer, a leading Australian IP academic, which has been published here.

In its efforts to thwart the introduction of plain packaging of tobacco products in Ireland, Big Tobacco and its allies like the Law Society of Ireland have marshalled a number of arguments, similar to those which decisively rejected in Australia. It is disappointing that the Law Society of Ireland has been promulgating a number of myths promoted by Big Tobacco. It should better than to uncritically adopt the rhetoric and the talking points of the tobacco industry … Rather than listen to Big Tobacco’s phony arguments about trade and intellectual property, Ireland should introduce the plain packaging of tobacco products to protect the common good and the public health of its people.

Update on plain packaging

Further to my recent post about the submissions of the Law Society on plain packaging of tobacco products to the Oireachtas Joint Committee on Health and Children, the below letter was sent yesterday by a number of solicitors to that Committee.

Solicitors and “plain packaging” laws

I wrote earlier about plain packaging laws for tobacco products and intellectual property. I mentioned that the Law Society had made submissions to the Oireacthas Joint Committee on Health and Children in relation to the issue.

I, along with 12 other solicitors who are members of the Law Society, did not endorse the submissions made by the Law Society before they were made and do not agree with them. On Monday afternoon, we wrote to the Society. A copy of the letter appears below.

I have received a response from the President of the Society today to say, essentially, that it is under consideration. The Director General of the Society has also written to The Irish Times in relation to a clarification he makes about their reporting of the issue, and that letter may well appear tomorrow. The President tells me:

The elected representatives of the solicitors profession, who comprise the Council of the Law Society, will continue to decide on what issues and with what content the views of the Law Society will be submitted to the many Government Departments, agencies, Oireachtas Committees and, indeed, other bodies who constantly seek the Society’s views on a vast range of different issues.


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West Limerick hills on a Summer evening. #nofilter

If ever passing through Newcastle West, stop for a stroll around the Castle grounds. Lovely on a day like today.

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