The Superwood companies which claimed almost £100 million (#127 million) compensation from three insurance companies will get nothing, following a High Court decision on Saturday. They now face a claim for legal costs running into millions of pounds.
Superwood's action followed a fire which destroyed a storage plant for waste plastic at Bray, Co Wicklow, in October 1987.
The case was the longest in the history of the High Court - the action began in 1997 and lasted 228 days.
Mr Justice Thomas Smyth began his judgment last Wednesday and finished reading it on Saturday evening. The length of the judgment also set a record. The action was taken by Superwood Ltd, Superwood Export Ltd and Superwood Chip against Sun Alliance Insurance Group, Prudential Assurance Co Ltd and Church and General.
The Supreme Court in 1998 allowed another insurance company, Lloyds, to settle its dispute with Superwood about £1.6 million.
On Saturday, Mr Justice Smyth dismissed Superwood's claim for damages in respect of alleged negligence on the part of the three remaining insurance companies. However, he awarded £197,445 to Superwood Ltd and £117,495 to Superwood Export in relation to a claim for losses as a result of the fire. Following the awards, Mr Colm Condon SC, for the insurance companies, said Superwood had failed to beat a lodgement in court by the insurance companies of £3.15 million prior to the action. In those circumstances his clients were entitled to their costs.
Mr Condon asked that the court give a decree for a zero amount to the Superwood companies.
Mr Justice Smyth said costs followed the event but granted a stay on his order in the event that the Superwood directors appealed his decision to the Supreme Court. The judge also granted a temporary injunction preventing Superwood disposing of assets below a sum of £5 million. The injunction continues until April 30th.
The order was made after the court was told that Ulster Bank Ltd and Ulster Bank Markets Ltd are owed about £2.5 million by Superwood Holdings Ltd, the holding and investment company of the Superwood group.
Mr Ivan Durcan, a solicitor for the three insurance companies, said in an affidavit that he was advised the bank had only recently become aware that Superwood had received a settlement of its claim against Lloyds - Ulster Bank had not received any lodgement other than a sum of £40,000.
Mr Durcan said the three insurance companies believed any order for costs would not be satisfied because Superwood might well have placed the Lloyds money beyond the reach of his clients.
In the final part of his judgment, Mr Justice Smyth said Superwood's claim was "grossly exaggerated and grossly overstated". He found the group's chairman, Mr Richard Bunyan, to be an unreliable witness. He said the claim was in many serious respects unfounded.
There was no foundation for the claim that sales took a downturn as a result of the fire. The Superwood dispute originally came before the High Court judge in 1991, when Mr Justice Rory O'Hanlon, now retired, rejected Superwood's claim for compensation after a 116-day hearing.
The matter then went to the Supreme Court which, following a 16-day hearing, upheld Superwood's appeal and returned the matter to the High Court for a new hearing to assess damages.
