A PRIVATE hospital in Cork that blames its closure on the failure of the VHI to grant it approval status has been ordered to provide security for the costs of its High Court action against the insurer.

The Cork Medical Centre was ordered yesterday by Mr Justice John Cooke to provide security for the costs of its competition law challenge to the VHI’s refusal to approve the centre for VHI subscribers. That refusal led to its insolvency, the centre claims.

CMC Medical Operations Ltd (in liquidation), trading as Cork Medical Centre, is suing the Voluntary Health Insurance Board, claiming it infringed competition law by allegedly abusively refusing to approve the centre’s hospital at Bishopstown as one where patients with VHI insurance might seek treatment or to which they might be referred for treatment by consultants.

In a preliminary application, the VHI had sought an order directing the centre to provide sufficient security for costs of the proceedings.

The private hospital at Bishopstown opened in October 2010 and closed in May 2011. CMC claims the hospital was forced to close due to the lack of insured patients referred to it.

Had VHI approval been forthcoming, the hospital promoters claimed it could have achieved an income of €21 million in the first year.

Yesterday Mr Justice Cooke said the evidence before the court derived entirely from the affidavit of the liquidator, who had no involvement with the company before last year.

It was reasonable to assume the company sustained a loss, given it was unable to pay its debts and had been wound up by its creditors, he said. The key issue was why it sustained that loss, he said.

Mr Justice Cooke said he was not satisfied a prima facie case had been made out for a casual connection between the refusal of the VHI to approve the hospital and the claimed loss resulting from its cessation of operations.

In those circumstances, he said he would make an order requiring security for costs.

The amount of security will be decided later.