This is because insurance premiums in Ireland are way too high, claims costs accounted for 75% of motor insurance premiums over the last 10 years; and the primary component of claims costs is compensation payments (the other is legal fees). So clearly any initiative to reduce insurance premiums must address compensation payments.
In terms of reform, the focus is on the minor, fully-recovered soft tissue injuries that account for over 80% of personal injury claims in Ireland. According to the landmark reports of the Personal Injuries Commission, these are 4.4 times higher than in England and Wales, which are outliers for the rest of Europe, where even less is paid.
One example to illustrate this would be a person who suffers a bruised thumb due to the negligence of someone else. No ligament damage, no broken bone, just bruising. So they take 2 paracetamol and after a few days of swelling and discomfort, they’re fine again. If they choose to sue and just take their case to the Personal Injuries Assessment Board, the first port of call for all negligence claims, they are in the frame for up to €21,200.
Damages are intended to provide restitution – to restore the injured person to his or her pre-accident state (in so far as money can do). But general damages at that level go much further and act as a punishment for defendants and a reward being injured. As they currently stand, they bring the entire system of compensation for negligence cases into disrepute and need to be re-balanced in a way that is fair, just, reasonable and proportionate as outlined by Court of Appeal judgements and the principles established by the higher courts in recent years.
For ‘constitutional reasons’ the last Government’s chosen route for sorting this issue is via the newly-established Judicial Council, a council of all the judges in Ireland, which in turn is set to establish a Personal Injuries Guidelines Committee (PIGC) which is scheduled to produce a set of draft personal injury guidelines this November.
We do have concerns that this process will merely implement small-scale reductions and give the impression that the issue has been addressed; whereas nothing short of a very substantial reductions in the rewards for minor injuries is necessary in order to sort this problem. But we trust that the PIGC will take account of the common good and the impact damages are having on Irish society in their deliberations.
Finally, it should be noted that the Alliance’s issue is with general damages for minor injuries. We have no issue whatsoever with special damages that compensate for loss of earnings or medical costs.
NOTE: If you want references for any of the data we have used in this blog, please contact us at contact@insurancereform.ie. Get Insurance Reform Posters here.
