NI Assembly Insurers Refuse to Cover Sinn Féin’s Phil Flanagan for Compensation and Costs Awarded in Tom Elliot Libel Case

It’s worth noting to begin with that that refusal is in accordance with advice given to Jack Peel, Deputy Head of Finance, NI Assembly in March 2011 by Karen McLaverty, Vice President, Marsh Ltd, who provide the Assembly insurance broking and risk management services.

Nineteen months after libelling the former UUP leader, Tom Elliot, then an MLA, now MP for Fermanagh and South Tyrone [since May 2015], the recently deselected Sinn Féin MLA, Phil Flanagan, appeared in Belfast High Court yesterday where he recognised the allegations were defamatory and baseless, formally apologised and agreed to pay compensation and costs.  The Sinn Féin MLA later tweeted an agreed statement in which he accepted his original tweet was untrue, wholly without foundation and apologising for all offence caused.

Setting aside the irony of Phil Flanagan’s original libellous allegations – in that they could have, more accurately, been directed at some of his own party colleagues without fear of libel – there are a couple of points of interest in this case.

Firstly, having deleted the original tweet an hour after posting it in May 2014, why did it take 19 months for the Sinn Féin MLA to accept his allegations were untrue, wholly without foundation and apologise?  As the UUP’s Tom Elliot, MP, said after the hearing [Edit: new link to UUP statement]

Mr Elliott said: “I have been totally vindicated and Phil Flanagan has admitted that the comments he made were totally untrue. I am very disappointed that it has taken so long to get to this stage.

“This could have been resolved 19 months ago, but unfortunately I was forced to go down this route. Despite that, I am delighted with the result.”

The other point, possibly related, concerns who will actual pay the compensation and costs awarded.  As the BBC report notes

The court was also told that the insurance firm which indemnifies MLAs at Stormont, has refused to cover Mr Flanagan in respect of any compensation and costs in this case.

The Sinn Féin MLA is challenging that decision in a separate court action. [added emphasis]

The Irish News report notes some of the submissions on compensation

Mr Justice Stephens was told Mr Flanagan has been unable to advance an offer of compensation because of the unresolved issue with insurance.

The defendant’s barrister, Desmond Fahy, argued that because of his client’s efforts to make amends the judge should heavily discount the level of damages decided on.

But David Dunlop, for Mr Elliott, argued that it took until yesterday’s hearing to secure a public apology.

“The defendant had every opportunity from May 1, 2014 until January 8, 2016 to tweet that what he said was untrue and wholly without foundation and to apologise to the plaintiff, but he hasn’t done so and he has called no evidence to explain why he hasn’t done so,” Mr Dunlop argued.

Claiming the discount on compensation should be limited, he added: “Accusing a person who has a responsible position as an elected representative and who has previously served as a soldier in the Ministry of Defence of harassing and shooting people must be towards the top end of the scale.”

Judgment was reserved on the level of damages.

Pledging to give his verdict as soon as possible, the judge said: “The case has raised points I have to reflect on and consider.”

In the News Letter Sam McBride suggests the bill could be significant

It also emerged in court that Mr Flanagan – who was deselected by Sinn Fein last month and so will end his term as an MLA in May – had hoped to avail of taxpayer-funded insurance which indemnifies MLAs from actions arising from defamatory comments which they make.

However, the insurer has refused – for reasons which were not made clear in court – to pay for his case.

Mr Flanagan is now suing the insurer in a separate case which has yet to come to court.

As things stand, he will have to pay compensation to Mr Elliott as well as the legal costs for both sides of the action.

This afternoon [Friday 8 Jan] the case resumed at the High Court, with Mr Flanagan’s barrister confirming that he would not be calling his client to offer any evidence in his defence.

After consulting with his client, the barrister confirmed that Mr Flanagan would tweet his apology to Mr Elliott by midnight tonight.

The judge, Mr Justice Stephens, reserved judgement on the issue of costs.

A previous libel by Sinn Fein, where the party defamed former Northern Ireland Water director Declan Gormley by untrue allegations about his financial conduct, saw the party having to pay £80,000 in compensation, as well as a far bigger legal bill.

However, unlike that case which went to trial with Sinn Fein denying that its statements had been defamatory, in this case Mr Flanagan accepted that what he had done was wrong, meaning that the judge is likely to give him a discount.

Today’s hearing was told that typically such discounts can be in the range of 33 to 50 per cent of what would ordinarily have been awarded against him.

Mr Flanagan’s barrister, Desmond Fahy, argued that because of his client’s efforts to make amends the judge should heavily discount the level of damages which he decides to award.

But Mr Elliott’s barrister, David Dunlop, argued that it took until today’s hearing to secure a public apology.

Unlike the NI Water libel case, which involved Sinn Féin press releases published on the party website, the party is unlikely to pick up the tab for Mr Flanagan in this case.

As for the reasons why the NI Assembly insurer has refused to cover any compensation and costs awarded…

Presumably Phil Flanagan assumed the Assembly insurance previously availed of by the DUP’s Paul Givan might apply?

Although, to my knowledge that is the only case when an MLA has used that policy cover.

But if that is his assumption, he might have to think again.

Several documents relating to the MLAs indemnity insurance were released following Mick’s FOI request in April 2013.

That particular policy seems to be renewed on a yearly basis, with AIG Europe Ltd in 2013/14 [pdf file], but assuming that the terms and conditions remain the same – including the 2013 increase in the excess to GBP 25,000 [3.7Mb pdf file] rather than an increased premium- Phil Flanagan’s claim would appear to fall under Libel and Slander cover in the Public Liability section.  I doubt that Employers’ Liability would cover Phil Flanagan’s twitter activity and, in any case, that mentions Bodily Injury but not Personal Injury.

Among the documents released in June 2013 is a March 2011 email from Karen McLaverty, Vice President Marsh Ltd, who provide the Assembly insurance broking and risk management services, to Jack Peel, Deputy Head of Finance, NI Assembly, et al. [scroll down, page 3 of 14 in 250Kb pdf file]

Having looked at the policy wording, I would advise as follows:

There is no libel/slander/defamation cover if an employee of the NIA or NIA Commission (NIAC) alleges another employee of the NIA or NIAC has libelled or slandered them. [added emphasis]

There is no libel/slander/defamation cover in respect of remarks/articles made by a third party (not an employee of NIA or NIAC) against an employee of NIA or NIAC.

There is cover however in respect of libel/slander/defamation if an employee of the NIA/NIAC makes defamatory remarks/articles etc in respect of a third party who is not an employee of NIA nor NIAC.

And, for the purposes of clarity, a 17 April 2013 email from Jack Peel, from the same document [page 7 of 14, pdf file]

The Assembly has an extension to its Combined Employers’ and Public Liability Insurance Policy to cover Libel and Slander made by employees of the Assembly (the insurers have since clarified that “employees” is deemed to include Assembly Members).  The extension was added in 2010/11 and the Assembly was advised that it was added at no additional cost to the Assembly. [added emphasis]

Since in May 2014, the date of the original libellous allegations, both Tom Elliot and Phil Flanagan were Northern Ireland Assembly Members, that leaves only one outstanding question – who’s advising Phil Flanagan?

Adds Today’s Irish News [12 January] has confirmation of the lack of insurance cover from a NI Assembly spokeswoman.

The Northern Ireland Assembly yesterday explained why its insurance does not cover the case.

A spokeswoman said: “Under the terms of the current policy the insured are ‘the Northern Ireland Assembly and the Northern Ireland Assembly Commission.

“The policy indemnifies for claims against the ‘insured’ and as both Mr Elliot and Mr Flanagan are deemed to be ‘the insured’, indemnity does not apply.”

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