Tuesday 17 October 2017

Private Cork hospital blames VHI for closure, High Court hears

A PRIVATE hospital in Cork, which blames its closure on the failure of the VHI to grant it approval status, has brought a High Court case for damages.

The Cork Medical Centre was today ordered by a judge to provide security for costs of its competition law challenge to the VHI's refusal to approve it for its subscribers.



CMC Medical Operations Ltd in liquidation, trading as Cork Medical Centre, is suing the VHI claiming it infringed competition law by allegedly abusively refusing to approve the Cork Medical Centre hospital as one in which patients with VHI insurance might seek treatment or to which they might be referred for treatment by consultants.



CMC wants damages for the losses it claims it has sustained as a result of those alleged infringements and which it has alleged rendered it insolvent.



The VHI had sought an order directing the Cork Medical Centre to provide sufficient security for costs of the proceedings.



The private hospital at Bishopstown, Co Cork opened in October 2010 and was forced to close in May 2011. CMC has claimed it closed due to the lack of insured patients referred to it and had VHI approval been forthcoming the hospital promoters claimed it could have achieved an income of €21m in the first year.



CMC Medical Operations ceased operating and was wound up with a liquidator appointed in May of last year.



In his ruling today, Mr Justice John Cooke said the evidence before the court derives entirely from the affidavit of the liquidator who had no involvement with the company before last year.



The judge said it is reasonable to assume that the company sustained a loss given that it is unable to pay its debts and has been wound up by its creditors.



The key issue the judge said is why it has sustained that loss. He said it is by no means apparent that CMC established on a prima facie basis that any such loss has a causal link to the alleged refusal of the VHI to approve the hospital.



Referring to correspondence the judge said the VHI had signalled its doubts as to the possibility of approving the hospital long before it opened.



He said it was also clear that the hospital promoters did not in fact have any basis for assuming automatic or immediate approval for the new hospital and they had apparently experienced similar doubts and delays in obtaining VHI approval for the Galway clinic.



Mr Justice Cooke said the court was not satisfied that a prima facie case had been made out as to the existence of a casual connection between the refusal of the VHI to approve the hospital and the claimed loss resulting form its cessation of operations. It followed that an order for security for costs be made. The court will hear both sides next week on the basis upon which the order will be made.



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