A blog is just a blog and is rarely definitive. I missed two elements of the post relating to the contamination of Irish pork products.

A. Irish farmers sell their pigs to factory processors; it is from the processor that the supermarket/retailer gets supplies. (So too, will a secondary processor such as a sausage maker). So, the retailers will have a claim against the processors; the processors will have claims against the farmers.

B. My post assumed delivery of the oil at its source. If delivery is at and to the Irish pig feed manufacturer in Ireland, Council Regulation 44/2001 will apply. Jurisdiction in those circumstances will be Ireland, not the place of the location of the supplier of the oil.

Details of the indemnity to the factory processors, by the Irish Government, are not to hand. Accounts suggest it is not a full indemnity. If so, the processors will be able to properly claim the balance from the farmers, who will in turn be able to make a claim against the pig feed supplier.

A sensible arrangement for the Government indemnity would have made provision for Ireland to be entitled to receive a proper portion of compensation recovered from farmers and/or the pig feed supplier.

A matter of great interest is the level of insurance cover of the farmers and the pig feed supplier. As always, the practicality of litigation is important.

Yet again we see the urgent necessity of legislation in Ireland to provide for Third Party rights under insurance and other contracts.

In the UK they have had that for 70 years and do not appear to have had any problems. What’s keeping us, (besides ineptness)?

I have previously warned of the need for vigilence in seeking indemnity cover from your own insurance company HERE.

Where you are the recipient of a claim, one way or another, you will find yourself, almost invariably, in litigation.

It is better that that litigation is only the proceedings taken against you. The alternative is that you find yourself in those proceedings and a new second set of proceedings in which you are the plaintiff and “your” erstwhile insurer is the defendant.

This can come about because your insurer declines to indemnify you for some alleged failure On your part as happened HERE.

Of course you could compound your difficulties yourself by failing to press your claim to indemnity in arbitration, as happened HERE.

The plaintiffs in these proceedings knew of a claim against them not later than 5th December, 2002. Their insurer knew of the claim prior to 20th March, 2003. It declined to indemnify. Only by letter dated 22nd December, 2005 did the plaintiffs attempt to refer the failure of the insurer to indemnify them to arbitration. In the letter the claimants’ solicitors informed the respondent that the claimants would be invoking the arbitration clause in the policy, nominated three persons who might act as arbitrator and enclosed a draft submission to arbitration.

Under the policy, the insured had one year to invoke the arbitration clause, whereupon the claim was deemed to have been abandoned. In the case the plaintiffs were very late.

The court extended the time to refer the matter to arbitration but subject to:

…the applicant will be responsible for the costs of this motion and will also be responsible for the costs of the arbitration even if successful therein.”

If you must shoot yourself, be sure to shoot yourself in the most painful part of your anatomy!

It is reported that Mr. Michael Lynn’s insurers are proposing to void his professional indemnity insurance “ab initio�?.

Solicitors must maintain professional indemnity insurance, pursuant to Section 26 of the Solicitors (Amendment) Act 1994. This is to provide indemnity to the solicitor for claims for compensation for loss “arising from his practice as a solicitor�? in respect of any description of civil liability.

Normally, the policy of insurance does not cover claims based on fraud. (Gray v Barr, Prudential Assurance Co. Ltd., third party [1971] 2 QB 554.)

The requirement to maintain professional indemnity insurance arises from the danger of making a mistake in professional practice. A solicitor (no less than any other professional) is answerable to a client who suffers loss consequent on any such mistake. Mistakes caused through negligence fall into the description of “civil liability�? but do not constitute the category.

The beneficiary of a professional indemnity policy is the insured professional. His client, on whom the loss may have fallen, has no privity with the insurer and, in Ireland, has no entitlement to seek payment directly from the insurer.

The client must make the claim against the professional person. Even in the UK where, under the provisions of the Third Party Rights against Insurers Act 1930, a client (the third party) may claim directly, in some circumstances (insolvency of the insured usually), against the insurer, it is incumbent on the client to effectively obtain a judgment against the insured before being able to proceed against the insurer. (Post Office v Norwich Union Fire Insurance Ltd. [1967] 2 QB 363).

A policy of insurance is a contract. Being an insurance contract it is “uberrimae fidei�? which has been defined as

All contracts of insurance are subject to ‘utmost good faith’ in that applicants for insurance are obliged to disclose any detail which may be of importance to the insurers whether or not it is requested.

The policy of insurance for Irish solicitors is an annual one. Such policies are “claims based�?. This means the right to claim the indemnity depends on whether the claim made against the solicitor has been made during the period covered by the insurance. The date of the making of the “mistake�? is not relevant.

A solicitor (or any professional) could possibly be aware of the making of the error which would give rise to the claim. Frequently, in such circumstances, the client might not be aware of the error and not yet have suffered the potential loss. Indeed, it may the loss which alerts the client.

If a solicitor is aware of any such potential loss, and consequent claim, it will be incumbent on the solicitor, in seeking the annual cover, to reveal that circumstance to the insurer. A failure to do so is arguably a breach of contract by the solicitor and could entitle the insurer to void the policy for the breach of contract.

Given the state of Irish law the injured client has no recourse against the decision of the insurer to take such action. The prospect of real recovery against the professional will be dependent on the solvency of the professional.