The High Court has directed that a dispute between Lord of the Dance star Michael Flatley and his former insurance company over a €30 million claim on his Cork mansion Castlehyde policy must be thrashed out at arbitration rather than in the courtroom.
The latest move in the Flatley Castlehyde drama came as the former Riverdance performer lost his High Court bid to prevent his multimillion claim against insurance company Hiscox – over alleged defective work done to Castlehyde – being referred to out-of-court arbitration.
Mr Justice Michael Twomey rejected Mr Flatley’s claim that Hiscox – in trying to get Mr Flatley to arbitrate, rather than litigate, its dispute with him – was seeking to avoid its responsibility to him.
The judge stated: “On the contrary, it seems to this court that it is Mr Flatley who is seeking to avoid his responsibility to Hiscox. This is because, in the plain English terms of the arbitration clause, he agreed to arbitrate any dispute he had with Hiscox. However, he is seeking to avoid his responsibility to Hiscox, by now seeking to litigate his dispute.”
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Mr Justice Twomey said for this reason, the court had little hesitation in referring this dispute to arbitration, particularly as there is nothing “unfair” in the possibility of Mr Flatley having to pay his own legal costs and those of Hiscox if an arbitrator finds against him in his claim against Hiscox.
Mr Flatley, in an affidavit opened to the High Court during the hearing, claimed the insurance company, which had covered his Fermoy estate until earlier this year, was trying to rewrite his consumer household policy into a commercial policy in order to rely on the Arbitration Act.
Hiscox Société Anonyme had applied to the High Court to have the proceedings against it before the Commercial Court – where Mr Flatley is suing several parties over alleged damage to the mansion – stayed, pending arbitration.
In the main Commercial Court proceedings, Mr Flatley claims he and his family had to vacate Castlehyde in October 2023 after toxic chemical residue was detected during routine maintenance. He has sued several parties, including Hiscox.
In his judgment, Mr justice Twomey said under the terms of the Castlehyde insurance policy, which was negotiated by a specialist insurance broker, Mr Flatley agreed to pay an annual premium of €69,285 for the property insurance cover.
The judge said the key issue in the case was whether an agreement to arbitrate as distinct from an agreement to litigate is an unfair term in a consumer contract such as would entitle Mr Flatley to avoid the consequences of his agreeing to arbitrate under the terms of his policy with Hiscox.
The judge said the fact that the arbitration clause does not state Mr Flatley will never be liable for legal costs is not a basis for Mr Flatley claiming that the clause is unfair, and so it is not a basis for him to avoid the consequences of his agreeing to that arbitration clause.
The judge said Mr Flatley appeared to to be claiming he was not aware of the arbitration clause when he agreed to the Castlehyde insurance policy in November 2023.
Mr Justice Twomey said it seems Mr Flatley had signed up to the arbitration clause presumably relying on the advice of insurance experts, rather than after reading the policy himself. The judge said there was no evidence Mr Flatley’s agent was not aware of the clause before Mr Flatley agreed to the policy, and Mr Flatley must be deemed to be aware of that which his agent is aware of.
The case will be mentioned before the court again next week.
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