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THE LONG-AWAITED report from judges on the awards made in personal injury claims should lead to an “immediate impact” on insurance claims and premiums, advocates have said.
Due in October, the report from the Judicial Council’s Personal Injuries Guidelines Committee will provide new draft guidelines to replace the guidance in the Book of Quantum.
Businesses are hoping the judges “reflect the common good” by lowering the guidelines on payouts in personal injury claims, and that these changes can be implemented soon.
“If general damages for minor injuries aren’t dramatically reduced, we’ll be in the same place in 12 months’ time,” Peter Boland of the Alliance for Insurance Reform told TheJournal.ie.
“It’s been established by numerous studies that general damages for personal injuries is at the heart of this crisis. This is the elephant in the sitting room.”
The long-awaited report by members of the judiciary follows a number of years of calls for action from government, and also follows a recent court case which highlighted an intervention from a judge on the proportionality of awards in personal injury cases.
‘Should not be a lottery’
Earlier this week, TheJournal.ie reported on a case where a whiplash award was reduced from €76,000 to €41,000 by a Court of Appeal judge who remarked that personal injury litigation “should not be a lottery”.
Mr Justice Seamus Noonan noted: “Ultimately each member of society must bear the cost of a compensation system whether through the payment of insurance premia in the case of private defendants or taxes in the case of public defendants. Society thus has a direct interest in the level of awards.”
The issue of tackling the high cost of insurance was seen as a priority going back to the beginning of the last government in 2016.
After bottoming out in early 2008, motor insurance prices began a steady climb which eventually saw premiums doubling by mid-2016, according to CSO stats. While CSO stats also suggest a drop since then, figures from the Central Bank show motor premiums have actually risen by 17% since 2016.
There are no official statistics on other areas of insurance, such as public liability for businesses, but business groups and bodies have said for years that insurance costs have become far too high and have directly contributed to the closure of many businesses.
The Cost of Insurance Working Group was set up four years ago to formulate recommendations that would lead to reduced premiums for individuals and businesses.
While the idea of Ireland having a “compo culture” that is the main culprit when it comes to high premiums isn’t borne out by the statistics, reducing the amount paid out as a result of claims has been pinpointed as a key measure in getting premiums down.
Speaking to TheJournal.ie late last year, the then-junior minister with responsibility for insurance Michael D’Arcy said the “biggest issue” remained the level of awards.
“I don’t want to see people getting a large amount of money for a very small injury,” he said. “I want that to end.”
Personal Injuries Guidelines Committee
One of the long-awaited measures to help do this was the creation of the new Personal Injuries Guidelines Committee under the Judicial Council Act 2019.
On that committee is a group of judges from the Supreme Court, Court of Appeal, High Court, Circuit Court and District Court.
They are tasked with preparing new guidelines on the level of damages awarded for personal injuries by courts in the State. Established on 28 April 2020, the committee had their first meeting on 7 May and is due to prepare its first set of draft guidelines on 28 October.
For businesses waiting for their insurance premiums to drop, these new guidelines on personal injury awards cannot come quickly enough.
Boland explained how the Alliance for Insurance Reform has put a countdown on its website till 28 October when that report is expected.
“It’s a very important date from our point of view,” he said.
While what’s expected on that date is only draft guidelines, Boland said he’s confident that the judges will expedite the changes and that the insurance companies should react to them “immediately”.
“If awards reduce dramatically, then premiums should reduce,” he said. “Insurance is based on future risk. We would expect them to react to these [guidelines]. We’d called on the government to get commitments from the insurers on the reductions we’d see.”
Last year, then-Minister D’Arcy sought exactly that from insurers – a commitment premiums would reduce if personal injury awards went down.
Boland cited a precedent set by the industry during a previous crisis over costs back in the early 2000s. On that occasion, the industry provided assurances that premiums would drop by a certain percent once the action it called for was taken.
A separate report that could offer a legislative, rather than a judicial, solution to the high payouts is also expected soon from the Law Reform Commission in the form of a report on capping damages in personal injury actions.
“Frankly, we don’t care what way it happens once it happens,” he said. “We can’t afford to pay the premiums we’re paying.
We’ve seen many friends close their business in the meantime waiting for progress on this. Surprisingly, even during a pandemic when social and economic activity has plummeted, we’re seeing premiums rise.
In a statement to TheJournal.ie, a spokesperson for industry representative body Insurance Ireland said that the industry was committed to working with the government and been clear that the cost of injury payouts was the “critical piece of reform in terms of dealing with the issue”.
“The real effects of claims inflation are seen in lower-value, high-frequency injuries like whiplash. According to the Personal Injuries Commission, 8 out of every 10 motor injury claims are for whiplash and our average award is 4.4 times what it is in the UK.
Insurers have committed to passing on savings to consumers arising out of reductions in the cost of claims. Competitors in the market will act independently but the evidence on this is clear. The last time we got to grips with costs through legislation with the foundation of the Personal Injuries Assessment Board in 2004, insurers responded, and customers benefitted.
The spokesperson added that industry officials met with ministers within the Department of Finance at the end of July, they also hope to “engage with the Cabinet Sub-Committee on Economic Recovery and Insurance Reform in Quarter 4 on the issue”.
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If you create a legal system that promotes compo-culture, then the system will be gamed by solicitors and lawyers and their customers. Just walk into any court in the country and watch the compo claim cases. Kids who have fallen off horses when horse riding and gotten “scars”, all of which are no longer visible. It’s hard to believe people claim for this rubbish, but the payouts are in the 10′s of thousands, and watching the solicitors feigning dismay at the “extent” of the horrendous injuries. I once saw a circuit court judge tell a solicitor that they were suing for too small a sum for “this sort of case”, and that they should up the claim amount. I wouldn’t trust the insurance companies an inch, but the legal system needs to be held accountable too.
@Fin: good point, I wont say all but most of the solicitors are absolutely milking the system.
@Fin: Absolutely, and they have a very lucrative and unhealthy hold on property conveyancing as well.
People blame the insurance companies, sure they are no angels, however it’s the legal
profession, solicitors and judges, that have actually caused this farce.
Remember the young one who was looking for €4m for falling off a Luas after jumping on the back of it for a ‘surf’. They settled the case for €550K – Transdev were advised that settling at this amount would be better for them than allowing the case to proceed.
Need arrest some people fake injury fraud need stop rise cost insurance car
@Brian Flavin: I was involved in a pileup a few years back. Lad claimed he had whiplash. Went to his GP once and his physio once.
€18,000.
The eejit did it before any decision was made on liability and he ended up having his own insurance company covering 50% of it.
Rotten culture of compensation.
@Ailbhe BLM: argee you true exactly
The last people we need deciding levels of payouts are the judges. They are the ones who have us in this mess in the first place. October will see only token reductions. Only thing that’s going to sort the rediculous payouts is proper reform of how judges are appointed and a mechanism put in place to remove judges who aren’t making decisions in the best interests of society.
@Isa: who decides what’s not in the best interests of society?
@Joe Bloggs: It would have to be a vote by the people. Ensure the 28 Court districts and 8 circuit court districts along with the judges sitting in them are well defined. Citizens in each district or circuit can petition for a judges removal and if they achieve a set quota they get a vote. For higher courts it would be a higher quota and a national vote. If system was put in place I think it would rarely be used but I think it would finally put manners on the majority of our judges whos decisions are currently based on ensuring maximum payout for the legal profession.
About time.
Remember insurance Ireland is under investigation by the European commission.
Compensation should be to address the injury caused. Minor scarring should be compensated with counselling, soft tissue injuries with physio and medical treatment, etc. All of this could be offered as vouchers, not large cash payouts. Anyone with an actual injury needing physio or an upset child will be happy with the outcome.
@Conall: that’s what they did in the UK for whiplash. You got vouchers for physio and a reduced payout. Insurance premiums are a fraction of what they are here now. My car in UK was £307 a year, cheapest quote I could get here €1600. I know it’s just one car and other variables can affect premium, but the difference in payouts must have some part to play.
Remember the IMF said the fees charged by the legal profession in this country were way out of whack with reality and needed reform, a list of reforms were drawn up and never implemented through government inaction, could this be the reason for such high insurance costs?
IMO, Insurance companies pay out far too easily, without proper checks to see if injuries genuine. Until that changes nothing will really change for premium holders…
Nothing will change, it’s a cash cow for all involved including the insurance companies.
Strikes me that our judges need to pull the finger out on a whole range of issues.
Many times we have to listen to whats happening in the UK. with different aspects of life , sure the make comparisons when its suits them , what about the other taxes we are stung with here VRT. etc. if they want the same playing pitch as the uk let it be across the board .
Why do people commenting immediately blame compo culture. Just click on the link in this article where it says that the statistics don’t support this view. Despite falling payouts and lower amounts being paid overall in claims insurance has gone up dramatically. It is NOT compo culture, it is greedy corporate culture that is causing these rises.
@Joe Griffin: not true. The vast majority of claims are settled to reduce costs and don’t go to court so don’t appear in these statistics
@Joe Griffin: there is also legacies of historic losses going back years that are not settled that Insurers have to hold huge reserves on. A slight change in trend does not improve anything in the medium term unless that trend continues for years. Some time ago the Central Bank advised premiums were low versus the reserves held – Setanta came into the Market and gave cheap Insurance because they were ‘regulated’ from Malta – the result was the premium income was not enough to cover the losses and those losses may be picked up again – as with Quinn Direct – by premium and taxpayers – Insurers were operating at a loss for years. There is a big price to be paid for cheap Insurance.
A GP for 30yrs. People seen who got rear ended- hundreds. People seen who were in the rear car- 7. Same impact…
@Ger Twomey: may I ask? If a claim is found to be fabricated, are there professional sanctions for medics who have supported the claim? I notice that even a sick cert from a staff member these days is met with skepticism. There is a belief you just pay your GP the consult fee and you get your sick cert, diagnosis of back pain etc. Not saying this is fact, but I’m curious if there is complicity amongst a small number of medics and the insurance industry? One hand feeding the other. Or would I be miles off in thinking this?
@Ed Dunne: it’s not that straight forward. These people fool the doctors too. They know exactly what to say and many have been coached by friends etc who have had successful claims. Remember Doctors are trained for many years to believe their patients and listen to them. They are not trained, nor should they be, to assume their patients are making things up.
@Ciaran bolger: yes doctors are trained to listen and I’m not suggesting their training should be different. Don’t believe I said that. But cold hard evidence such as medical testing, x ray, MRI, you name it, provides scientific fact. How are cases going any further than that if medical science shows the “patient” is not injured. I’m asking what happens when a claim is thrown out of court? It wouldnt have gone that far without medical support of the supposed injuries? You say your injured, your doctor agrees, and the judge disagrees. Is the medical evidence that was supplied questioned at this point? For a spurious claim to make it as far as the courtroom doesn’t seem right. Are judges over ruling qualified medical opinion or is the medical opinion supplied as spurious as the claim?
@Ed Dunne: which is why I asked the question of Dr. Twomey above. For a medics perspective on the whole shambolic process.
@Ed Dunne: the vast majority of personal injury claims are for soft tissue injury / whiplash with no objective findings on X Ray or MRI – we live in an information age – people know what to say and Doctors will take them at their word – on the extremely rare occasion they do not the Solicitor can chose from any number of different medics who will diagnose or talk it up – I do not see the medical profession being complicit – Judges should apply cop on and not throw small fortunes at these types of injuries – high awards = high premiums. It is just arithmetic – instead these great legal minds are put to work on more expensive committees to see what the problem is.
Lived in Canada and it cost us $90 per month to tax, plate and insure a 2.5 litre SUV. That was the flat cost and anyone could then drive the vehicle once licensed. Came home and was quoted EUR 3,500 for insurance on a small car. And that was only if we allowed a monitor to be fitted for the first year. He woman I spoke to was the rudest human you can imagine. Basically sneering with a take it or leave it attitude. That was 123.ie. Others were more polite but still outrageous. I was told this was because we had been driving outside Ireland. The Canadian embassy are appaled, as 123.ie basically said that our driving experience in Canada counts for nothing with them. Hope they have solid insurance themselves for the lawsuit that’s now coming their way.
@Ed Dunne: the elephant in the room is really the government’s unwillingness to challenge this most corrupt of industries. Complicity means they just wont do anything. A competent leadership would introduce a state backed, affordable insurance for everyone. If you want an upgraded package, by all means go with the vultures, but basic motoring insurance needs to be made available on a nationalised scheme. Let the state make some money from insurance and let everyone benefit. Brokers and the likes of 123.ie need to be hounded out. As quickly and aggressively as we can.
How about a serious clampdown on perjury?
The bill is through the seanad, so what’s holding it up?
@John Mulligan: the legislation is already there in the form of Sec’s 25 & 26 Civil Liabilities and Courts Act 2004 which can allow for significant fines and prison sentences – either the Civil Judge does not implement it, the Gardai do not take it up, a Garda Sergeant or Superintendent do not run with it, DPP advises no prosecution, or a Criminal Judge gives a fine or suspended sentence – the perjury Bill was just pre election window dressing on a hot political topic that if enacted can and probably will fall at any of the aforementioned hurdles regardless of the level of evidence.
In fairness what do we expect when you consider the litany of claims tghaty are being taken.
It’s refreshing to see that Judge are not afraid to revise down the amount of compensation awarded if the defendant’s choose to appeal but insurance companies need to get real about their business models for the sake of everyone.
A quick look at some of the recent stories here says enough about what people are willing to take a chance on claiming for. At least the Journal seems to be a bit more responsible about what it is willing report.
- https://www.independent.ie/irish-news/courts/
- https://www.injuriesboardadvice.com/news/tag/compensation-settlements-in-ireland/
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