Monday 19 February 2018

Judge warns parties in Blackrock Clinic suit of 'negative and destructive' litigation process

The Blackrock Clinic
The Blackrock Clinic

Aodhan O'Faolain

A judge has warned the two “main protagonists” in a long High Court battle for control of Dublin’s Blackrock Clinic continuation of the“negative and destructive” litigation is neither in the interests of the hospital nor the parties.

In 2014, Dr Joseph Sheehan, co-founder of the clinic, initiated a case against Breccia, whose co-directors are businessmen Larry Goodman and Declan Sheeran, and others, including Dr George Duffy and Blackrock Hospital Ltd (BHL), the parent company of Blackrock Clinic.

BHL has repeatedly said it does not want to be in the case. 

Mr Justice Robert Haughton today directly addressed what he described as the “two main protagonists”  - Dr Sheehan, and Breccia (represented by Mr Sheeran) - who had both accepted an invitation from the judge to attend before him so he might address them. 

In an unusual intervention, the judge suggested the two main protagonists meet privately, with no lawyers present, to have an “open and honest” discussion about the issues in dispute. The court would do what it could to facilitate “proper dialogue”, he added.

While his job was to hear the case, he had become increasingly concerned at the “negative and destructive” nature of the litigation, the judge said. If it continued, the next stage would be expensive and long-running, take weeks and was “unlikely to end in this court”.

He was particularly concerned some older persons were involved in the litigation when, at their time of life, they should be engaged in “more pleasant pursuits” and not “stressful and worrying” litigation also affecting their spouses and families.

Cases such as this tend “to take on a life of their own” and it will require a lot of “courage and vision” to engage in proper dialogue and compromise.

Before the case goes to its next stage, the parties should “take a step back” and reflect as it was in the interests of all, including the parties and Blackrock Clinic, the dispute was concluded, he said.

The judge last July invited the “main protagonists” to attend voluntarily before him in the High Court so he might address them. He also suggested other parties might benefit from attending.

Dr Duffy and Jimmy Flynn, whose father developer John Flynn has a separate action over shareholdings in the hospital, were among others who attended before the judge.

At the outset, the judge asked John O’Donnell SC, for Dr Sheehan, whether there had been any “serious attempt” to settle the case.  Counsel replied he must be careful not to disclose details of without prejudice discussions and was sure both parties ideally would like to settle matters while the legal teams were no barrier to any settlement. Both sides felt very strongly about the issues and were also conscious of the mounting costs, he added.

Mr Justice Haughton, and other judges, have previously expressed frustration and concern over the duration of the dispute, particularly because it concerns a hospital. Ireland’s largest private hospital, Blackrock Clinic was co-founded in 1984 by Dr Sheehan along with his fellow surgeons Jim Sheehan and Maurice Nelligan, and Dr George Duffy.

The case includes a dispute over the price for redemption of loans made by the former Anglo Irish Bank to Joseph Sheehan to buy shares in the clinic.  Those loans were acquired by NAMA and sold on to Breccia.

Earlier this year, Mr Justice Haughton ruled Dr Sheehan could redeem his loans for  €16.9 million, not some €20 million sought by Breccia.  In the separate case by John Flynn and his company Benray, they won orders allowing them redeem for €9.3 million, not some €11m sought by Breccia

Breccia last July failed to get a stay effectively preventing the shareholders proceeding with loan redemption until Breccia’s appeal against the judge’s decision, listed for November 2017, is decided.

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