IBA not insured for £515,000 defamation award

THE Irish Brokers' Association does not have insurance cover for the £515,000 defamation award made against it this week by the High Court. Mr Richard Enderson, deputy president of the association, acknowledged that the association, which represents 600 insurance brokers and has assets of around £60,000, may now be facing a financial crisis.

The association's insurance policy will not cover the award, which relates to events in 1992, explained Mr Enderson. However, he said that some arrangements were in place that would mitigate the impact of having to pay out the award. Mr Enderson added that the association was confident of wining its appeal against the award.

The chief executive of the association, Mr Paul Carty, was not available for comment last night. However, the association issued a brief statement. "IBA is considering its positions, and considering an appeal to the Supreme Court. We have obtained a stay of one month and shall be applying to the SupremeCourt to extend the stay. The appeal shall be on legal issues and quantum (the amount of the award)."

On Thursday, the High Court awarded £515,000 damages to Mr Albert Dawson and Mr Dudley Dawson, trading as A E Dawson and Sons, who claimed that the IBA had defamed them when it wrote to insurance companies saying that their membership had been terminated.

The IBA had claimed that, if the contents of the circular were untrue or unjustified, the occasion of publication was one of privilege.

Mr Justice Barron ruled that the association did have qualified privilege but in this case it had exceeded, if not abused it and destroyed any question of qualified privilege.

The IBA had written to insurance companies with which Mr Dawson and his brother held agencies and also to the Insurance Intermediary Compliance Bureau in April 1992 to say that their membership had been terminated because they had not complied with the requirements of membership. However, the court found that the IBA had failed to give Mr Dawson and his brother ample opportunity to state their case before making a decision on the matter.

The plaintiffs claimed that they complied with the membership requirements.

The Irish Brokers' Association headquarters are at 87 Merrion Square in a building that belongs to the association's compensation fund. It is recognised by the Department of Enterprise and Employment as a self regulatory body for insurance brokers under the 1989 Insurance Act. It is constituted as a limited company.