The High Court's Warning Shot On Inflated Personal Injury Claims

Background

In January 2026, the High Court delivered judgment in Higgins v Coleman and Motor Insurers’ Bureau of Ireland¹ on the issue of costs and considered the consequences of advancing a seriously flawed and excessive loss of earnings claim in personal injury actions. 

In the personal injury action, the Plaintiff advanced a claim for financial losses of approximately €1.752 million, of which €1.4 million was claimed for loss of earnings and €342,602 for loss of capital appreciation of properties. Although the Plaintiff ultimately succeeded in obtaining a total award of €170,564, the Court awarded €60,000 for past loss of earnings with nothing allowed for future loss of earnings or capital losses. The extent of the loss of earnings claim related to four years' past loss of earnings on a reduced basis equivalent to minimum wage figures. 

Submissions 

A central issue in both the substantive hearing and the costs ruling was the quality of the Plaintiff’s expert accountancy evidence. Counsel for the Defendant submitted that approximately two days of the five-day hearing were taken up with evidence relating to the loss of earnings claim which was found to be flawed and unsatisfactory. Counsel submitted that the Court should award to the Defendants two days’ costs of the hearing. 

In reply, Counsel for the Plaintiff submitted that, although the Court reduced one element of the financial losses considerably, this should not drown out the other substantive findings made by the Court following a fully contested hearing. Counsel submitted that the Court should grant the costs of the proceedings to the Plaintiff to reflect her success in the action and allow an adjustment of the costs order, if necessary, to reflect that the Plaintiff was not wholly successful in the loss of earnings element of the claim. 

Decision of Mr Justice O’Higgins

Mr Justice O’Higgins identified three main issues which would be considered when addressing the parties’ submissions.

1. Should the normal default rule of granting costs to the successful party be departed from here?
2. If a departure from the default rule is warranted, should this be limited to reducing the Plaintiff’s costs or should it sound in a positive award of costs in favour of the Defendants?
3. Is there a way of tailoring the costs order which would sufficiently reflect the court’s judgment and the justice of the case?

Justice O’Higgins noted that it was undoubtedly legitimate and justified for the Defendants to contest the inflated loss of earnings claim mounted on foot of the accountant’s flawed report. The Court was satisfied that it was appropriate to depart from the default rule of awarding full costs to the successful party in the action. 

In considering whether there should be a positive award of costs in favour of the Defendants, Justice O’Higgins considered the principles set out in Veolia Water UK plc v Fingal County Council² which held that where the length of a trial was increased by virtue of issues, which ultimately failed, by an overall successful party, the successful party should be refused costs attributable to that issue which elongated the hearing but should also have to pay costs to the unsuccessful party in relation to whatever portion of the hearing was attributable to the issue. 

The Veolia principles were further considered by Barr J in Dardis v Poplovka3 where it was stated that the approach in Veolia was sensible and logical. He stated that just because a judge decides in favour of a Defendant on an issue, does not mean that the Plaintiff should necessarily be penalised where the claim made is reasonably stateable on evidence. Applying this approach, Justice O’Higgins stated that the loss of earnings claim was not held to be unstatable in its entirety though the grossly excessive extent of the claim was criticised. He acknowledged that it did elongate the trial. Justice O’Higgins found that it would be disproportionate to make a positive costs order in favour of the Defendants on the loss of earnings issue. 

Finally, Justice O’Higgins considered whether there was a way of tailoring the costs order which would sufficiently reflect the Court’s judgment and the justice of the case. He stated that aside from the Court’s significant misgivings surrounding the loss of earnings, it was legitimate and reasonable for the Plaintiff to seek damages for all elements of her injury. He noted that the work done by the Plaintiff pre-accident would have been greater than the figures ultimately awarded for past losses, and that the Plaintiff has already been marked with a financial sting due to her over-reaching claim. 

Justice O’Higgins concluded by making three adjustments to what would be the default situation where a Plaintiff has been successful in a personal injury action:

1. The Plaintiff is entitled to costs of a four-day hearing to include reserved costs, disallowing one full day’s costs.
2. Any costs associated with the preparation of the flawed accountancy report were disallowed.
3. No order for costs with respect to the hearing on costs. 

Conclusion

Although the Court declined to make a positive costs order in favour of the Defendants on the loss of earnings issue, the adjustments made represent a meaningful departure from the default position for successful Plaintiffs. 

This judgment reinforces several principles of direct relevance to insurers and their legal teams when defending personal injury claims. Significantly, the Court confirmed that it was entirely legitimate and justified for the Defendants to contest the inflated loss of earnings claim that had been advanced on the basis of a flawed accountancy report. For insurers, this serves as an important reminder that robustly challenging excessive claims can yield a tangible costs benefit, even where the Plaintiff was ultimately successful in her action. 

For insurers, the case underscores the value of early and thorough investigation of financial loss claims, particularly where the expert evidence underpinning them appears questionable. Whilst a claimant who succeeds in her action will ordinarily recover her costs, this decision confirms that over-reaching on quantum is not without consequence.

Footnotes

1 [2026] IEHC 144

2 [2007] 2 IR 81

3 [2017] IEHC 249

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