Wednesday 26 October 2016

ESB must pay 60pc of UCC's multi-million euro legal bill after flood damage - High Court

Aodhan O'Faolain

Published 04/12/2015 | 15:11

University College Cork
University College Cork

A High Court judge has ruled the Electricity Supply Board must pay 60pc of University College Cork's estimated several million Euro costs of marathon legal proceedings over extensive flood damage to building at the college in late 2009.

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UCC is entitled to its costs against the ESB, less a 40pc discount, of the 104 day action, Mr Justice Max Barret ruled.

In his 39-page costs ruling, the judge, who has previously criticised the cost of accessing the courts, again referred to the "over-priced system of court-administered justice".

If UCC was correct in arguing it should get 100pc of its costs based on the normal "costs follow the event" rule (costs go to the winning party), that would mean the true effect of that rule was "more deterrent than incentive", he said.

It would mean cases that "ought to be brought are not brought" and the courts, "though tehcnically open to all, are truly open to increasingly few".

The judge said "cost-shifting" between parties may be necessary to ensure "so-called ordinary people" are able to recover the costs of bringing winnable litigation. As this action involved "two moneyed parties", it was unnecessary in this case to address the issue further, he said.

Last October, the judge found the ESB 60pc liable in nuisance and negligence for the flood damage and UCC 40pc liable in contributory negligence. He later heard arguments on costs before giving his ruling on Friday.

In claiming 100pc of its costs against ESB, the judge said UCC essentially argued it had to bring the action to establish ESB was liable in negligence and also argued it succeeded in establishing the ESB liable in nuisance. It further argued the contributory negligence issue had not involved additional court time and expendture.

Anyone not on the UCC side who sat through the 104 day case "may have been surprised" by that last argument, the judge said.  "Certainly, the court was."

Having analysed the relevant legal principles and cases, the judge said this was not a complex case. While "long and expensive" with lots of witnesses, it was in the end a case of nuisance, negligence and contributory negligence that fell to be gauged by the established facts.

That meant a relatively simple analysis was sufficient to decide the costs issue, he said. UCC won its claims of nuisance and negligence and those twin successes were the "events".  Application of the full indemnity norm would mean UCC would get all its costs but "justice for the winner" was not the only concern in apportioning legal costs.

It was "entirely reasonable" for ESB to claim, by way of defence, UCC was guilty of contributory negligence. It was also clear the court had considered UCC guilty of "serious and significant" contributory negligence.

Additional factors included this was the first Irish case where the liability of a dam operator fell to be tested fully in a court and was also a "close run" case as evidenced by the 60/40 finding on liability.

If a loser wins on a major issue, even the most fundamental notion of justice suggests the general indemnity rule may not apply and that was what should happen here, he ruled. UCC should recover its costs against the ESB, less a 40pc discount.

In its action, UCC claimed the ESB's management of water releases from two hydro-electric dams on the River Lee lead to significant unnecessary additional flooding causing substantial damage to 29 buildings on the UCC campus.

Mr Justice Barrett ruled ESB, as dam operator, was 60pc liable in nuisance and negligence for the damage to UCC's properties. UCC was 40pc liable in contributory negligence due to failing over years to act on mounting information of flood risk to its properties and continuing to construct properties on the River Lee flood plain.

UCC brought its claim on behalf of its insurer Aviva, which sought some €20m damages for losses at UCC and another €14m for losses suffered by other property owners. The amount of damages will be quantified later. 

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