On 7 March 2013, the High Court handed down judgment in favour of the respondents in the case of BUPA Ireland Ltd & Anor v The Health Insurance Authority & Ors (the “BUPA Case”).

The BUPA case related to the legality of the Minister for Health and Children’s (the “Minister”) introduction of a risk equalisation scheme (the “Scheme”) for insurers operating in the health insurance market in Ireland through a series of statutory instruments made under the Health Insurance Acts 1994 – 2001.

By way of background, the Scheme, as adopted in 2003, was based on the concept of “community rating across the market” in which so-called “intergenerational solidarity” was assessed and imposed by reference to the risk profiles of the entire community of holders of private health insurance policies.

On the introduction of the Scheme, BUPA Ireland Limited (the “BUPA”) brought judicial review proceedings challenging the Scheme on the grounds that, as adopted, it infringed the Constitution, the EU Third Life Insurance Directive and the competition and freedom of establishment articles of the European Treaties. The respondents in the action were the Health Insurance Authority, the Minister and the Attorney General (the “Respondents”).

In 2006, the High Court dismissed BUPA’s claims holding that:

  • the introduction of the Scheme was within the Minister’s powers; and
  • although the Scheme had potentially distorting and anti-competitive effects and could be taken as intruding upon constitutional rights of property, it was nevertheless objectively justified in the interests of common good and did not infringe the rights or protections invoked under European or constitutional law.

The High Court’s decision was successfully appealed to the Supreme Court which in 2008 held that the Scheme, as adopted in 2003, was unconstitutional and ultra vires the power of the Minister because the only scheme authorised to be imposed under the Health Insurance Acts 1994 was a scheme based upon the “within the plan” concept of community rating. The Supreme Court set aside the 2006 High Court decision and rendered void the statutory instruments that established the Scheme.

In light of the Supreme Court’s ruling in 2008, the matter was remitted to the High Court for determination of the following issues: (a) whether there was any liability by the Respondents for damages to BUPA and, if so; (b) the amount of damages. These issues were the subject of the recent High Court judgment delivered on 7 March 2013. The High Court held that BUPA had failed to establish an entitlement to damages on any of the grounds claimed.

Legislation for the introduction of a new risk equalisation scheme was enacted in December 2012 to apply from January 2013.