VHI can apply to strike out action if private hospital does not provide €1.8m security by July

An application can be made to strike out High Court proceedings by a private hospital company against health insurer VHI next July if the company has not first come up with €1.79 million as security for legal costs.

Mr Justice Max Barrett made the ruling on Thursday when he formalised orders he made last week that Limerick Private Ltd and its director Shay Sweeney must provide security for costs in the case. They have sued the VHI board claiming the insurer abused its dominant position by refusing to provide cover for their proposed new hospital in Limerick in breach of competition law. They also seek damages for interference with their constitutional right to earn a livelihood.

VHI denies the claims.

The Limerick Private Hospital project was a proposal for an eight-storey hospital (including three levels underground) costing some €75 million. It would have 95 beds and six operating theatres. Planning permission was granted in March 2007. It is claimed that as a result of the VHI refusing cover for the proposed hospital – a key component in private hospital funding – Limerick Private was unable to obtain third-party funding.

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The VHI sought security for costs which was opposed by Limerick Private and Mr Sweeney on grounds including that it was the actions of the defendant that led to their impecuniosity. VHI denied the claims.

Mr Justice Barrett did not accept their impecuniosity was caused by the defendant’s wrongdoing.

When the case returned before him on Thursday, he was told the sides had agreed the wording of orders in relation to the judge’s decision on security for costs.

However, there was disagreement on whether there should be a time limit on when the monies should be provided before VHI would be entitled to apply to strike out the entire proceedings.

The judge disagreed with VHI’s suggestion that the security should be provided within 90 days of the making of his order. However, he said the money should be provided by next June 24th and if this does not occur VHI can apply in July to strike out the case.