Cooley sheep farmers entitled to more foot and mouth compensation

Two sheep farmers from the Cooley peninsula, Co Louth, have won a Supreme Court order that they are entitled to additional compensation over the culling of their flocks following the foot and mouth disease outbreak in 2001.

The amount of compensation will be decided by the High Court later. The case is regarded as a test case.

Brendan Rafferty and John Elmore had appealed a High Court decision they were not entitled to compensation beyond that already received for the market value of their sheep.

A five judge Supreme Court has unanimously overturned that decision and found they were entitled to compensation for the “total loss” suffered as a result of the culling.

An estimated 400 farmers in the Cooley peninsula had to cull their flocks as a result of the 2001 disease outbreak in Britain, which spread to an area around Meigh in Co Armagh. A number of those farmers also initiated proceedings but it was agreed the Rafferty and Elmore claims should be dealt with first to establish what principles apply.

Mr Rafferty lost 695 ewes and received a total of IR£145,244 compensation for the animals culled, while Mr Elmore lost 199 sheep and received total compensation of IR£29,495. Both farmers accepted the sheep cull was necessary in the public interest, but argued they did not receive proper compensation for their losses and were entitled to compensation for consequential losses, including difficulties restocking their farms.

The Supreme Court said the issue in the appeal was the interpretation of the term “compensation” in Section 17 of the Diseases of Animals Act 1966.

The Chief Justice, Mrs Justice Susan Denham, said a person compulsorily deprived of their property interest by the State is entitled in principle, having regard to the constitutional protection of property rights from unjust attack, to compensation for the total loss caused or resulting from compulsory deprivation of those interests.

Compensation may be limited in certain exceptional circumstances to an amount less than the total loss, including consequential loss, but any such exception would be subject to strict scrutiny by the courts as to the legitimacy of the grounds for such limitation and subject also to the principle of proportionality.

There was nothing in the relevant legislation suggesting any exception to the payment of total loss arises for consideration in this case, she said. The term compensation in its natural and ordinary meaning is payment for “total loss”.

The State had, in this case, elected to pay compensation which encompassed payment for the total loss and that must include consequential loss to Mr Rafferty’s business, she found.

The court would allow the appeal and rule Mr Rafferty, and Mr Elmore, were entitled to compensation for financial loss and damage, including consequential loss and damage caused by the cull of his sheep. The matter would be returned to the High Court to assess the “total loss” amount.

While the 2013 Animal Health and Welfare Act had since addressed the issue of compensation, that Act was not applicable to this appeal, the Chief Justice added.

Mr Justice Donal O’Donnell, in a concurring judgment, said the foot and mouth outbreak was “a particular catastrophe” for the sheep farmers of the Cooley peninsula. The difficulty in this case was compounded by a “wholly inadequate and confusing” statutory regime.

Compensation in this case must be taken to mean total loss to be assessed on the basis of “market value” but that concept was not an easy one to apply where, in effect, there was no market functioning at the relevant time, he added.

While the compensation sought was “ambitious”, it would not be wise or fair if the State were to take advantage of a “catastrophic” drop in price caused by outbreak of disease and possibly the restrictions of animal movements, the judge stressed.

The High Court had found Mr Elmore and Mr Rafferty both secured compensation somewhat in excess of the strict market value for their sheep when they went to replace them but it also accepted both farmers suffered losses beyond the mere market value of their animals, including loss of sheep who had been “hefted” onto commonage and that it took time to return to the same weaning rate.