Irish insurer Quinn-direct has settled a legal action in which it was alleged that it had pressured a policyholder into accepting a low payment for a multi-million pound claim.

The dispute centred on a claim for €54m (£36.4m) by timber company Murray Timber Products. The claim was made after a fire at its Galway plant in 2005.

During the course of the trial, Quinn-direct’s commercial and UK sales manager, James Gannon, came under fire from the judge, who expressed dissatisfaction with his evidence and at one point threatened to cite him for contempt.

The case centred on whether a €14.7m (£9.9m) payment by Quinn-direct was in full and final settlement of the claim.

The Irish Commercial Court heard that Quinn-direct had accepted liability and had reached what the insurer said was a full and final settlement of €14.7m with Murray in August 2006.

But Murray made a number of complaints about the way Quinn handled the claim. The court heard that Murray felt it was being pressured into accepting a low settlement of its claim.

Murray said that the €14.7m was only a part settlement.

After rigorous cross examination of John Gannon, the court was told a settlement had been reached with Quinn-direct paying all of Murray’s costs.

A spokesman for Quinn-direct said: “The reason there was a court case was that we could not agree on a settlement of the claim with Murray Timber and we had to give our reinsurers the necessary assurances that any settlement reached represented value for money.

“The case was settled by agreement before the court gave judgment.”

Ombudsman battle

Quinn-direct is awaiting judgment in its legal battle against the Irish Financial Ombudsman (IFO), relating to the insurer’s refusal to pay an estimated €1m (£674,000) in refunds to its policyholders.

The IFO argued that the insurer failed to itemise a €25 (£16.80) administration fee on policies for drivers who changed cars between 2000 and 2006. The charge has reportedly been itemised on policies since January 2006.

The ombudsman consequently directed that the money should be refunded.

Quinn-direct said the ombudsman had made an incorrect decision and that bringing the case to the High Court was the only way to appeal.

A spokesman said: “There’s nothing illegal about charging the administration fee. His argument seems to be that it wasn’t in the policy document.

“The admin fee is a standard fee charged by all insurers here. There’s nothing illegal about the fee.”