Dáil Éireann debate -
Thursday, 5 Jun 1986

Vol. 367 No. 6

Courts Bill, 1986: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Mr. Hyland

When I moved the adjournment I was demonstrating to the House that the jury system is not a significant factor as regards insurance costs but that there are a number of other areas where substantial savings could be effected if they were tackled by the Government. I outlined the effects on the overall cost of insurance of very expensive legal structures which require that two senior counsel, one junior counsel and a solicitor be in attendance. I asked the Minister to amend that requirement. This is a major contributory factor to the escalating cost of insurance and represents a significant proportion of the award which a plaintiff receives.

I also indicated that uninsured drivers were a contributory factor to the overall cost of insurance and I gave it as my view that there is need for an urgent review of the present system of collecting motor insurance and taxation. While Members may not agree with my point that motor insurance and taxation could more fairly and equitably be collected through a tax on motor fuel, this suggestion deserves the serious consideration of the House as a method of eliminating the unacceptably high number of uninsured vehicles.

We all know the trauma and turmoil which an uninsured driver can cause if he is involved in an accident. He would not have any insurance with which to compensate an injured victim. The State has imposed a substantial levy on insurance companies, and thus indirectly on those taking out insurance, to protect them in such circumstances. If we did not have uninsured drivers we would make a significant contribution towards reducing the overall cost of insurance. What we are discussing today is so insignificant in terms of its contribution to insurance costs that it hardly warrants debate.

If we take it that road accidents represent a high percentage of all insurance claims, then it is logical that the causes of road accidents should be identified and some means devised to reduce the incidence of such accidents. Successive Governments have not done sufficient to create an awareness that accidents contribute substantially to the high cost of motor insurance. Almost 50 per cent of all road accidents are alcohol related. I know the Government intend to bring in legislation to reform the licensing laws. We have not seen this Bill but if it is proposed to liberalise the licensing laws I will be opposed to it. It would be a step in the right direction to restrict the availability of alcohol and would make a major contribution towards reducting the level of serious road accidents.

Another contributory factor to the cost of insurance is the cost of hospitalisation. Orthopaedic hospital beds are a scarce commodity but 28 per cent of them are occupied by the victims of road accidents. That gives some idea of the money involved in providing health care for such victims. We have a large waiting list of people, particularly the elderly, who are in need of orthopaedic treatment.

I have made the point on many occasions that one cannot totally isolate one aspect of national administration from another and neither can one isolate the question of disbandment of the jury system and the cost of motor insurance from other areas such as that to which I have referred. There should be a co-ordinated approach aimed at reducing overall expenditure in the areas I referred to. We tend to overlook the level of State support in the form of disability benefits paid to victims of road accidents when we are considering the cost of such accidents. It is a hidden cost but we must bear it in mind when considering our approach to the Bill. It has been pointed out to me that the cost of repairing vehicles involved in road accidents had escalated in recent years as a direct result of Government policies. For example, because of the Government's rate of VAT a car wing costs £400 here compared to £150 in Northern Ireland. That difference in cost is reflected in insurance settlements.

I do not think the Bill is necessary and I do not know where the demand for it came from, but I suspect certain vested interests in the insurance industry were involved. In my view it is a gesture by the Government to placate those who complain about high insurance costs. I hope the debate exposes the Bill for what it is, an effort by the Government to pretend they are concerned about escalating insurance costs. I get annoyed when I think of the other areas which are major contributory factors to the high cost of insurance that should be tackled here. Those areas are being ignored by the House. The Bill proposes to dismantle the only provision in our judicial system that gives a citizen the right and the opportunity to participate in settling damages in civil injury claims. The Minister did not put forward a shred of evidence to indicate that the jury system has been a contributory factor to the overall cost of insurance. I have demonstrated that it is the least significant area in terms of its contribution to overall costs. The Bill should be rejected. It does nothing to achieve the objective, which presumably the Minister has, to tackle the escalating cost of insurance cover.

Mr. Allen

If, as Deputy Hyland said, the insurance industry has a vested interest in the abolition of the jury system, it must be said that the legal profession have a vested interest in retaining that system. That is one of the reasons why there has been such vocal opposition from the legal profession to the measures before the House. Deputies like myself are between the devil and the deep blue sea in trying to reach a conclusion on this matter. On one side we have the legal profession who are the most arrogant, most dangerous and most vicious profession I know. As individuals they are nice people but as a professional body they would slit one's throat if one tried to impinge on their rights or questioned their method of operation. I will support that statement later with some facts. On the other hand, insurance companies use every trick in the book to extract higher premiums, avoid reasonable risks and, in the event of a claim, they will use every means possible to get out of it. I have evidence to support that statement.

For a long time I have been a strong advocate of the abolition of the jury system but at this stage I am not so sure. I support the Bill but, as occurs in regard to a lot of legislation, experience changes one's view. Some of the most recent experiences I have had with the legal profession lead me to believe that I would be safer going before a jury if I had to go to court. I am prompted to support the Bill because jury decisions are being overruled frequently by the Supreme Court. Deputy Skelly told us of a case in Cork where an award by a jury was reduced on appeal to the Supreme Court. That man had to have his leg amputated arising out of an explosion in the Glen of Imaal. His claim was dealt with by a jury in the High Court but his award was reduced drastically by the Supreme Court. The courts were manipulated in such a way that the case was not defended in the High Court by the Department of Defence out of fear that too much would emerge about the incident. The High Court jury awarded huge damages but the amount of the award was contested by the Department in the Supreme Court. The details of the incident did not have to come out in the Supreme Court because the issue to be decided related to the amount of the award. That man was a victim of the manipulation of the legal system not only by the legal profession but by an arm of the State.

I should like to give another example. A woman whose husband was killed when he fell from a roof was awarded £65,000 by the High Court but the defendants had money to take the case to the Supreme Court where the award was thrown out. The Supreme Court held that the woman, the mother of five children, was not entitled to one penny because of a technicality. Is that justice? What power have juries in such cases? In my view they do not have any. For that reason why do we not cut out the messing and the costs involved and let the Judiciary make the decisions? We must bear in mind that an appeal to the Supreme Court costs the insurance companies a lot of money and that is passed on to those who take out insurance cover. It represents nice profit for the legal profession.

Although I support the Bill I have reservations about its provisions. The cases I mentioned are examples of why the archaic ways of Irish justice are notorious and why they are enjoyed by those who are part of the system but feared and detested by those who suffer delays and are denied justice because they cannot afford the costs. Calls for reform are heard from time to time but die quickly because of the indifference of the legal profession or their opposition. The will for reform has been killed by the indifference of all political parties in the past. They have treated law reform as an issue of minor electoral appeal that did not matter. Our problems exist because of the apathy of all policital parties. Deputy Skelly said my party were most culpable but there are lawyers on all sides.

There is a need for major improvements and radical experiments aimed at removing waste of time and money. Unfortunately, that need has not been accepted by the legal profession. Even minor changes are accepted only under pressure of public opinion. I could quote many examples.

Three years ago, in my innocence, I made a statement in Cork about the legal profession and the delays being experienced by house purchasers. I was backed by the city manager at that time. Lo and behold, the following day I had the Southern Law Association down on my back. They said I was exaggerating. It went from there to something else and I began to get letters from victims of bad judgments, or bad performances, or bad professional service by lawyers. I put my case to the Minister at the time. We were told by the Southern Law Association and the Incorporated Law Society that there was no problem, it was exaggeration, a political gimmick. The evidence was gathered by the Minister, and the Law Society had to eat humble pie and accept there was a major problem involving mismanagement by lawyers, misbehaviour by lawyers and negligence by a number of lawyers. If negligence arises, God help the client. He cannot get his case into court because it is very difficult, and if he succeeds in getting it to court he is entering a jungle at his own peril.

The Minister is now convinced there is need for reform. The Incorporated Law Society now agree there is need for reform and they have put their views to the Minister. We hope there will be legislation to deal with these matters in the next eight or nine months. The point I have been making is that it is difficult to get those people to admit anything. They hide behind their dignity and the privileges they have enjoyed for so long. A major review of civil procedures is overdue and there is an immediate need for more radical reforms than those being proposed here now. I agree with Deputy Hyland that this Bill is only the start. I hope it is not just a sop because there is need for great reform in all aspects of the court system.

The causes of avoidable delay and unnecessary expense must be identified not only in consultation with the legal profession but with the other users of the court system, and they are as important as the legal profession because they have to endure the present system. Reform must occur with or without the co-operation of the legal profession. It is regrettable that the Law Reform Commission have not been more active in this important area. Instead of issuing reports and studies on minor issues of law, they should get involved in the difficult but more urgent task of trying to improve our court system. I am disappointed that a major study has not been done on this by the commission.

It is regrettable also that there has been lack of political will and lack of professional pride by the legal profession. This has prevented us from modernising and simplifying the existing body of law. For example, if we buy houses we have to endure the whole procedure of conveyancing, bridging loans and the heartbreaks that go with them. Last year a Private Members' Bill went through the House of Commons in Britain, the sponsor being a member called Mitchell. I was of the opinion that we could adapt that law to our condition, and I got the Bill and sent it to a friendly lawyer whom I trusted. I got the opinion back: "You are wasting your time. The property laws in Ireland are so dated that you cannot simplify the conveyancing system." They have managed to bring their laws somewhat up to date in Britain but here we left them in the 19th century, and consequently people are suffering, with 10 per cent going on to the price of houses every day in the week because we have not done our duty, or we have been influenced by the profession into not doing our duty.

The obvious priority given to specific issues instead of broader issues benefiting the entire administration of justice such as reform of procedures and the simplification of the law seems to be very questionable. Law reform should be a continuing process at several levels. At the moment we are moving too slowly and not always in the most urgent matters. Although complaints abound, there is no momentum behind law reform policy either from the profession or the politicians.

As an aside, I will look at the Department of Justice. We have had successive Ministers and I will not in any way criticise former Ministers, one of whom is sitting opposite. However, I am sure Deputy Doherty will agree that most of his time was taken up with fire brigade actions dealing with riots in prisons or bank robberies throughout the country, and he had no time to deal with the important issues of law reform, which were his responsibility. Much thought should be given to the role of the Department of Justice. Unfortunately they and the Minister seem to be taken up with crisis after crisis. Therefore, not only am I critical of the legal profession, but we as politicians should come up with procedures in the Dáil whereby non-controversial technical Bills could be put through the House fairly rapidly and parliamentary time could be given to the real issues, important Bills dealing in particular with law reform.

An Leas-Cheann Comhairle

Would the Deputy try to get back to the Bill?

Mr. Allen

I have finished with that matter. It is my opinion that the whole process of law reform is governed externally by the major influence of the legal profession in all political parties. Suggestions by some parliamentarians are resisted by vested interests who are effective in ensuring that their own interests are represented in the House and who can react so viciously when their interests are jeopardised. It is my opinion that the legal process is being used as a vehicle of profit and power by the legal profession and by some of the financial institutions who are intertwined with the legal profession.

An Leas-Cheann Comhairle

Would the Deputy intertwine his speech with the Bill?

Mr. Allen

I am doing that. They use the court system as a weapon of intimidation against public representatives and the media. I have many examples of how the court system is being used at the moment. I have a list of court writ threats against me from building societies and lawyers. The media also have them because they published speeches I had made. That is the type of intimidation people like me and the newspapers have to put up with if we try to raise points of public interest. I cannot insure myself against libel and therefore individuals must think hard before they speak out, because we will get threats of writs from building societies if we question their modus operandi in taking commissions from insurance, and the restrictive practices they operate. It is a serious issue involving the courts system.

I am not overstating my case when I say some of the financial institutions that are so deeply intertwined with the legal profession are using the courts to silence not only public representatives but also the press. They are not above threatening public representatives with legal proceedings which, if successful, would put many of us out of business. They have massive resources and their actions can be effective. We have to look at our personal positions. I have evidence here that there is widescale intimidation of public representatives and the media——

An Leas-Cheann Comhairle

The purpose of the Bill is to provide that certain actions in the High Court shall not be tried before a jury. That is the basic principle of the Bill.

Mr. Allen

If the Leas-Cheann Comhairle had been here earlier he would have heard people talk about road conditions, the laws in relation to drink, about doctors and so on. The point I am making is relevant because it is related to the courts and the way they are being used. If I speak here about law reform, I am within my brief to refer to this matter which is directly related. However, if the Chair is getting upset——

An Leas-Cheann Comhairle

I am not upset. I am trying to guide the Deputy.

Mr. Allen

I say to the institutions, under privilege of this House, that people will not be intimidated by them. We will continue to raise matters that vitally affect the public in their everyday lives——

An Leas-Cheann Comhairle

The Deputy must do that in a relevant manner.

Mr. Allen

There is a major threat facing any public representative who takes on the powerful interests in the country. I am supporting the Bill but I am doing so on the assumption that more radical and far-reaching reforms will follow in the near future. I do so because I believe the present courts system where juries are involved has direct relevance to the massive escalation of insurance premiums and has resulted in the virtual breakdown of risk insurance cover. I have plenty of examples of this and will quote one or two to show that reforms are required. I have here a copy of a letter from an employer in Cork to the Minister for Industry and Commerce with the heading "Insurance increases in employers' liability". The letter stated:

Further to our previous correspondence last year regarding increases in our insurance costs, this year's increase in employers' liability cover alone has gone from £19,500 to £28,000. Our total insurance bill for this year is £50,000.

The letter stated the company had a workforce of 28 persons and were paying more than £1,000 per week for insurance. That is a huge millstone around the neck of any industry. In my speech I referred to insurance companies extracting as high a premium as possible and I have here a letter from a Cork firm addressed to me for transmission to the Minister. It states:

I apologise if this letter seems long-winded but I would like to make one further point. Having failed to get insurance in the Republic of Ireland, we took our proposal to an insurance broker in the United Kingdom. We asked them to quote us for employers' and public liability insurance not only for the UK but for the other 11 countries in the EEC. I must stress we did not mention Ireland by name but having taken all other relevant details they reported back within a week with the following staggering reply.

They were pleased to inform us that our application for employers' and public liability insurance has been vetted and was passed as an acceptable risk and the cost would be £1,200 for one year.

The letter stated that the public liability was to cover six qualified persons but there were a number of stipulations as follows: the company would be registered in the UK, it would be subject to UK law, tax returns would be filed in the UK the company could employ only recognised craftsmen, namely, those up to British standards, and there was a final stipulation that should the company be working outside the United Kingdom at present they could not employ foreign personnel. That is concrete proof that what is happening in the insurance business here is killing industry and it is encouraging people to take their companies abroad. The writer of the letter said that the insurance company were quite happy to accept them if they operated from their country, paid their taxes and were subject to their company laws. However, that company were not considered an acceptable risk in Ireland. It is a sad state of affairs and sums up the chaotic situation existing. We are caught between the legal profession and the insurance companies and I do not know which of them is taking us for a ride.

The jury system is not the only reason for the high cost of insurance cover but it is a prime reason. In jury cases the human element must be taken into account. Juries are normally hearing cases for the first time and in many instances the jurors are in court for the first time in their lives. Therefore, they are vulnerable to pleadings in cases where injuries are concerned and, accordingly, at times they make judgments that are inconsistent. This point has been made during the years and it is one reason the insurance industry has called for the abolition of juries in certain trials.

I have reservations because I can see that both sides are not acting fairly. Another factor that adds to the high cost of insurance is the matter of over-representation in the courts. If a person wishes to go to the High Court he must have two senior and one junior counsel and a solicitor and providing the same number for the other side, we have a total of eight persons. The insurance company pick up the bill but the cost ultimately is borne by the public in their insurance premiums. I have debated this matter with lawyers in Cork and also in this House. Privately they say they agree with one but add that any change in the system would be against their interests. The process is killing industry and it is clogging up the courts, causing hardship because of the delays.

I go along with the Bill in the expectation that it is not just a sop to the critics and that it will be followed by real reform in the next 12 months in respect of over-representation in the courts. I hope there will be real reform in relation to solicitors and the way the Solicitors Act is operated. We should not be fobbed off with comments that this matter is under discussion or that there will have to be further consultations. The public will not tolerate that because the country is falling apart.

If the jury system is abolished the insurance companies will have a major responsibility to bring some order and balance into the industry. They must change their attitude. As I have shown, they are running away from their responsibilities in certain types of cases. I hope the Irish Insurance Federation are serious about the remarks they made yesterday and which were reported in the newspapers, that they will bring about an improvement in the insurance market as soon as possible if this Bill is passed. We will be watching to see their performance in the months ahead.

All types of risk insurance are in a chaotic situation. Employer's liability is a huge element in the cost of employment. In my constituency I would put the number of jobs affected in the hundreds. A car hire firm in Cork got an international franchise but Norwich Union took them for a ride for three months. They discussed figures with them but after three months they said no. The businessman brought his case to the Minister who went to the declined cases committee, and they went around in circles for another two months. Then the entrepreneur gave up in frustration. I can cite many more such cases. If we were to tot up all the cases I have heard about we would find that there were hundreds of jobs at risk. We are setting up new grants systems, enterprise agencies, the National Development Corporation and so on, but people who want to set up small industries are being discouraged because of the high cost of insurance. We are dealing with this in a very small way today but this is very urgent and we should take the necessary steps to bring the industry under control.

Irish people have become litigation conscious in the past few years. If a person slips in a dance hall he goes to his solicitor next day and claims against the dance hall proprietor. All this is adding to the cost of insurance. It costs £70 or £80 to get a specialist's report and if he is called to give evidence in court, it will cost a fair amount. All this adds to the high cost of premiums. As I said, we are spending vast sums of money creating jobs through State agencies but the chaos in the insurance industry is killing initiative in many other areas. Hundreds of jobs have been lost, or have not been created, in the past 12 months in my area alone because of the high cost of insurance.

We must have a better programme of industrial safety. We are not the greatest in Europe so far as industrial safety is concerned, and major improvements are required. If we had higher safety standards insurance costs could be reduced.

At my clinics my constituents tell me that many cases could be dealt with if the parties involved and their solicitors behaved sensibly. Many cases are taken to court so that the legal profession can claim increased fees and costs. I have heard of people who cannot afford litigation costs agreeing to pay their solicitors a percentage of the award. This means that the greater the award the larger the cut for the solicitor. The Law Society say this is illegal but it is happening and is adding to insurance costs. The cases are taken into court, the sympathies of the juries are played upon and costs escalate. More important, the court calendar is crowded and a person who is suffering serious hardship because of a motor accident cannot get his case heard in court for three or four years. This causes serious hardship. This area too should be looked at.

As I said, this system is being used as an instrument of profit by the legal profession. As legislators we have a responsibility to eliminate this major problem. Last December I spoke in this House about the free legal aid system and called it a run-in, run-out and collect your fee system, and I still stand over that. The figures recently published in the press as a result of parliamentary questions are now being contested by every solicitor involved in the free legal aid system in a particular area — I do not want to be too specific. Every solicitor involved is having a go at the individual who wrote the article in the newspaper. This shows the Mafia type operation which is going on here.

I have plenty of letters here to back up the case I am making — solicitors' letters representing building societies, individuals, and so on. This is a very serious problem which this House must face up to because it is affecting employment, the court system and people who are trying to buy houses. In my opinion, we have done little or nothing in the past 50 or 60 years to improve the situation because of the powerful vested interests involved.

I hope this Bill is a step in the right direction. If Governments do not act, Deputies on all sides must come together and put forward Private Members' Bills to get the Government to act. I would be prepared to sit down with anybody on any side of the House to come up with some proposals to start to tackle this appalling problem. In this way we would be doing the public a very good service.

Mr. Doherty

Most Deputies have referred to the fact that there are vested interests — the insurance companies and the legal profession. Naturally where there is financial gain involved, great interest is shown by the parties involved. Our function is to ensure that we have a fair and just court system which will give the greatest possible protection to all our citizens, particularly accident victims.

The Government's intention to abolish the jury system in certain civil actions will mean that no longer will we have juries sitting as assessors of damages and the amounts to be awarded in our courts. This is a great pity.

The Minister could have brought a more comprehensive Bill into the house dealing with wider matters and all the factors that contribute to the high cost of insurance to the general public, but I do not believe the matter can be dealt with by the abolition of the jury system. At the same time, I am not suggesting or implying that the jury system does not need to be improved. It does, and I will outline where I believe improvements can be made. Juries are comprised of men and women and have in the past rendered a service that could be rendnered only by people who have no vested interest other than the giving of an award in fairness and justice to the victim of an accident. The complaint most frequently heard concerning juries is that they make inflated awards, that jury awards as far as the insurance industry are concerned are far too high but, of course one can ask at the end of the day, who better to decide on such awards? After all, they are the people who pay for and contribute towards the costs in one way or another.

In the past awards here have tended to be much higher than awards in Britain. Recently very high awards were made in Great Britain. This is a jurisdiction where the trial judge sits alone but where conditions otherwise in the courts are closely similar to what obtain here. The insurance industry and others have emphasised that, as a result of appeals in many cases, the Supreme Court has reduced the amount of awards and thereby indicated that the jury awards tend to be over-generous. It has been said that the jury's sympathy is on the side of the complainant and they fail to take into account that insurance companies suffer a real loss by over-generous compensation.

What has always been described as a great defect in the jury system is the inconsistency of jury awards and the total lack of predictability of awards. Many such awards can discourage parties from going to court because they perceive a certain standard for settlement. The Government claim that litigation would become speedier and cheaper if the jury system were abolished and that the amount of awards given by a judge sitting alone would be more predictable. The Taoiseach was quoted recently as saying that, when they take away the right of citizens to trial by jury in personal accident or injury cases, the Government will expect cheaper insurance in return. On the other hand, the insurance industry stated that this measure will not bring about a reduction in the cost of insurance premiums; rather it will help to stabilise insurance premium rates. There is a conflict between what the Taoiseach is saying on the one hand and what the insurance companies are saying on the other.

It is fair to say that the insurance industry claim that the abolition of the jury system could bring about greater stability. That may be true. The jury method of assessment is a long established feature of the administration of justice here and it should not be abolished. Rather it should be improved and strengthened. I hope the Minister will bring in another Bill to allow us an opportunity to examine in greater detail the real difficulties which are causing the high cost of insurance at the moment. The fact that jury awards are too high, as is claimed by some, is not a valid reason for the abolition of the system. It could be said that awards by judges in other jurisdictions are too low, and I believe that is the case in Great Britain. The fact that the Supreme Court in some cases has overturned decisions of the High Court really indicates nothing. After all, it is quite regular for decisions of the Supreme Court to overturn decisions of High Court judges.

The jury system is an essential part of our system of justice and we should not set about its abolition without taking very serious account of all that is involved. However, I agree that a greater degree of consistency should be introduced. It could be achieved in the assessment of damage bearing in mind what is necessary to ensure a fair and just award. There are a number of methods by which greater consistency and general improvement in the jury system could be brought about. A jury can comprise 12 men or women or a combination of both. I have always believed that they are representative of our people and our society, and that is a very important element of justification for the retention of the jury system. It can be said also that juries do not form part of any lobby, vested interest, or financial or professional grouping. The importance of juries in criminal cases has long been accepted here and juries are an essential part of criminal trials. I cannot see why peoples should be denied the right of a jury assessment in cases of serious injury.

We all know that jury assessment is not an exact science, but invariably, because of their composition, juries are more representative than a single judge sitting alone. Consider the lack of uniformity amongst judges and district justices in the lower courts. A case has been made that there is a lack of uniformity in awards made by juries. Taking into account the Circuit Court and the District Court I am not happy that we can improve that by the abolition of the jury system. One can see in the Circuit Court and the District Court, in cases that are somewhat similar, the very wide differences that obtain between one court and the other. Lack of uniformity in the lower courts can very well indicate how difficult it could be to obtain the type of uniformity we seek in the higher courts in the absence of juries.

One of the practical effects of the abolition of the jury system will be to remove from the public at large one of the very few opportunities they have to participate in the administration of justice. It will also transfer responsibility for setting of standards of behaviour the hands of a cross-section of the community who collectively have wide experience of ordinary living and appreciation of acceptable behaviour within the community.

Debate adjourned.