Deputy Andrews to resume the debate.
Courts Bill, 1986: Second Stage (Resumed).
Question again proposed: "That the Bill be now read a Second Time."
This morning I was discussing the problems relating to the proposals before the House. I pointed out that many submissions were received from interested parties in connection with the Committee on Court Practice and Procedure set up in 1965 and, in 1972, the committee of inquiry into the insurance industry. In 1982, the Prices Advisory Committee reported on the costs and methods of providing motor insurance. No significant or substantial report has appeared since then which could be relied upon to indicate a change in the situation. It is my submission that the reality and importance of these committees is that at no stage did they indicate they were seeking the abolition of juries in civil cases. These committees which were set up by successive Governments consisted of prominent people in positions of authority. In those circumstances and by virtue of their experience they would have known the problems from A to Z. Being fully aware of the problems, in their wisdom they decided there was no case at that time to be made for the abandonment of juries in civil cases.
Before lunch I also said in regard to the liberty of individuals — and I pointed out this might be a liberty of a different kind — it is proper where their good names were involved that there should be juries but equally where there were personal injuries of a substantial nature involved the matter should be left to a judge and jury as distinct from a judge sitting alone. Another point I raised was that there is no evidence of a widespread demand in this society for the abolition of the jury system in civil cases. If the facts were fully known, and if this was a matter upon which a referendum was required, I pointed out that there would be general agreement that the jury system would receive an overwhelming yes vote from the public at large. However, this is not the case and in the circumstances it is a matter entirely for the legislative wisdom or un-wisdom of this House. We live in a free society in which as politicians we constantly advocate the full participation of every citizen in everyday life. We ask that all citizens fully participate in the democratic process.
Why at this stage when respect for law and order is at a low ebb should we further reduce the right of the citizen to participate in the administration of justice? I must ask the Minister to consider whether this legislation is constitutional and whether, following its passage, he will be faced with a constitutional challenge as to its efficacy in the context of our Constitution. I must ask the Minister to refer this legislation back to his law office to consider whether or not it is constitutional in the light of the case of de Burca v. the Attorney General, 1976, Irish Reports at page 38, where the plaintiffs challenged the Juries Act, 1927, which inter alia exempted all women from jury service. The then Chief Justice asked whether this discrimination is permissible or is it of such a nature as to be regarded as being invidious. He said if service be regarded as a right, then this means the exclusion of many thousands of citizens merely because they do not possess a particular type of property.
Clearly, in this case the Supreme Court were of the view that jury service was a right and a right which had to be protected under the Constitution. That was why I raised the constitutional point. In the case of de Burca v. the Attorney General the then Chief Justice quite correctly took the view that all citizens as of right were entitled to serve on juries. Consequently, that conclusion became evident.
Therefore, I am now asking the Minister to refer the Bill back to his law officers with a view to obtaining a constitutional view on it. If it comes back with the views enshrined in his Second Stage speech, so be it. There is a constitutional case to be made. Whether it would succeed or not is another day's work but it is worth raising because we would have been wasting our time discussing this legislation in this House if it were found to be unconstitutional. It would have been an appalling waste of time and money if this legislation were to be passed by both Houses of the Oireachtas and then found itself defeated as being unconstitutional. For that reason amongst the other reasons I have offered, we on this side of the House are strongly opposed to this legislation.
Before the break for Question Time I had raised the question of uninsured drivers. I believe that to be the main reason for the cost of insurance premiums having risen to such an extent. My view is that the uninsured driver is a criminal, that his or her behaviour is anti-social. They do a disservice to those people who pay their insurance premiums, in many instances very large ones. They are placing not alone their own but other lives at risk. I accept that in the case of personal accident, where there is no insurance cover, there is a pool paid into by the various insurance companies called the Motor Insurers' Bureau. They pay for personal injuries only. They do not pay for physical damage done to a car; that is a total write-off. If the law were applied properly, if the Minister had his Department exercise considerable muscle in the context of the uninsured driver, then we would not have to be dealing with this problem here today. I understand that in the not too distant future it will be compulsory on all drivers to display and insurance disc on motor vehicles generally.
The Minister and those people who have been critical of the legal system are right because there is no question but that it leaves a lot to be desired. Indeed, the members of the legal profession recognise that there is much to be done to update the system. In the context of the Bar, the Law Library, where we wear wigs and gowns, I may be able to make a case for the wearing of a gown on the basis of protecting one's clothing, acting as an overall in the to-ing and fro-ing in the courts, consultations, referring to law books on a daily basis. But there can be no case whatever made for the existence of the wig.
It keeps the brain warm.
It is inclined to damage what little bit of hair some of us have left. We could start with the abandonment of the wig in the Law Library because it is unnecessary. Also the language of the law in court is archaic — expressions such as: "may it please your Lordship", "if your Lordship pleases". The manner of addressing judges on the bench is out of date. They are examples of things which could be dealt with immediately.
Many allegations have been made against the legal profession. However, speaking as a practising barrister I should like to pay tribute to the very high standards maintained by the Bar in the face of unresearched criticism in many instances. The Bar is made up of people who have had the privilege of an education sufficient to bring them into the Law Library — agreed, it is a rather privileged condition in life — but those people who do go into the Law Library are of the highest integrity and standards. There is a code of exemplary behaviour in the Law Library. I am proud to have been part of it, to have been associated with it over many years.
There have also been some extraordinary, unfair accusations against insurance companies and individuals within those companies. Speaking as somebody with experience of the insurance industry generally, it is my opinion that in the main these are people of the highest integrity. In the legal profession or in the insurance industry always there will be examples which can be highlighted where the system can be seen to have broken down, but the system overall should not be condemned for the shortcomings of the few. It happens in every walk in life. Because there may be one or two bad apples in a barrel, the entire barrel should not be condemned.
In the course of this debate The General Council of the Bar of Ireland sent a letter, dated 10 June 1986, to all Members of the Oireachtas. The second page of that letter is worth reading into the record. It is signed by the Chairman of the Bar Council, Mr. Patrick MacEntee, who, in the view of many, is one of the best criminal lawyers of his generation or, indeed, in the history of the Law Library. On page 2 of that letter under the heading "conclusion" he had this to say:
The abolition of juries is the equivalent of buying a "pig in a poke" and it does not make good sense to effect change for the sake of change;
We seem to be pussy-footing around a very large problem in relation to the operation of the legal system. The abandonment of juries in civil action cases appears to be effecting change for the sake of change and does not make too much sense. Mr. MacEntee goes on to say:
...particularly when it cannot be established that the suggested "cure" is preferable to the "disease" and may even aggravate the situation.
He then goes on to pose the question: "Will the abolition of juries serve the interests of justice?" and says:
1. Among the practical effects of the abolition of the jury system are:
(a) It will remove from the public at large one of the very few opportunities they have to participate in the administration of justice.
I have already dealt with that. It is proper that as many citizens as possible should be involved in the administration of justice, so that they will know firsthand, from their experience, how the system operates, warts and all. I have already pointed out that the treatment of jurors in whatever courts they served left much to be desired. Their conditions left much to be desired. Undoubtedly they were — if I may put it crudely — soured and disillusioned by their treatment when they came to perform a public duty on behalf of the State. They were treated shabbily by way of conditions, their knowledge of how the system operated, how they were to serve, even in terms of the possibility of payment for the service they rendered or of being provided with a meal in the course of that service which inevitably lasted a fortnight or three weeks. Indeed, during that period quite a number of the panel of jurors presenting themselves might not have been called to serve on a jury. Taking account of that, that observation by the Chairman of the Bar Council is a fair one, that it will remove from the public at large one of the very few opportunities they have to participate in the administration of justice.
The second point made by Mr. MacEntee is:
(b) It will transfer responsibility for setting standards of care in this country from the hands of a cross section of the community who, collectively, would probably have a wider experience of "ordinary" living and a better appreciation of acceptable behaviour within the community into the hands of a judge.
I stress that that comment emanates from the Chairman of the Bar Council, not from Deputy David Andrews. Then he goes on to say:
In other words, from now on, the judge, rather than a cross section of the community, will decide questions of responsibility for accidents and what standards of care are appropriate on the public road, on the factory floor and as between the professional classes and members of the public, i.e. alleged negligence of solicitors, doctors, accountants etc.
That is the point I made about the differential between the types of awards we give and the low awards given in England for the same type of accidents. The letter goes on to state:
It could, if the English example were followed, have the effect of reducing the amount of compensation recoverable by persons injured through no fault of their own, to a very low level by comparison to what they could now reasonably expect under the jury system, e.g. a jury can be expected to award something between £50,000 and £60,000 for the loss of an eye, whereas in England the same injury would attract an award in the region of £15,000 to £17,500. The availability of jury trial serves the useful social function of discouraging or even preventing litigation from becoming the exercise of an exclusively professional ritual engaged in by professional lawyers, judges and advocates. It ensures that the kind of justice administered is one which the ordinary man can understand and desire rather than the kind that the professional lawyer thinks he ought to have and is good for him. It is our view that the decision by one man alone is always potentially inferior to a collective decision.
That is a matter of opinion. I do not think at any stage in the course of his letter Mr. McEntee, the Chairman of the Bar Council, attempted to diminish or deny the undoubted integrity of our Bench. They have never been found wanting in the service of both the country and the legal system.
Mr. McEntee's letter goes on to state as follows:
It is questionable that the interests of justice are better served by the substitution of the views of a judge for those of the ordinary man in the street in relation to proper conduct within the community and the level of compensation to be paid to persons injured through no fault of their own. The Bar Council in bringing to you its views on this matter of public importance wishes also to restate its willingness to co-operate to the full.
In the event of this Bill passing successfully from the Government's point of view through this House, the Bar Council and the Incorporated Law Society will make the system work. There is no question about that. They will co-operate fully and continue to do their duty within the purview of what they are asked to operate.
I apologise for having held up the proceedings of the Dáil and arriving rather out of breath and in an unfit state.
I welcome this opportunity to contribute on this Bill. I would probably agree with most of what has been said by my constituency colleague, who is also a lawyer, particularly regarding the need for a review of the legal system. For that reason I have to question the simplistic approach in the introduction of this Bill. Many arguments can be made for and against trial by judge and jury and trial by a judge sitting alone. This legislation has been brought forward as a response to simplistic headlines concerning the slowness of justice or the peculiarities of certain awards made from time to time. It is dangerous for us as legislators to believe that a simple Bill like this, seen as a sop to certain elements, will actually achieve anything. We may well abolish juries but at the end of the day will we have achieved anything or solved any problems?
We should undertake a total review of the operation of the legal system, considering how actions arise, the working of the Bar Library, the courts and the Incorporated Law Society. All these bodies and all systems need review and changes in their procedures from time to time. A review of these operations would bring about greater results and answer more demands. I have not had a massive amount of lobbying for the abolition of juries. I have had complaints about cases coming on, about solicitors and barristers and delays in medical reports coming forward. Recently I had a complaint about the state of Dún Laoghaire District Court. A total review of the legal system would encompass the various problems involved to see that our legal system in all its aspects is brought into the 20th century, doing away with outmoded rituals so that justice would be seen to be more swift and effective. While we have been well served by our legal system, the fact remains that it needs updating.
I do not want to dwell unduly on this point but in Dún Laoghaire District Court the corporation are responsible for upkeep but the people who work there are Department of Justice employees. The court has just one toilet and no public telephone, yet here we are abolishing juries as if this is the most urgent need. I have to question the priorities.
That is why I would have preferred to see a review of the legal system as it operates. We should examine how it operates at various levels and consider the different bodies who work in connection with the courts, everything from the appointment of judges to the workings of the Bar and of solicitors and the whole process by which cases are brought on. Such a review is long overdue. I hope it will take place and that it will not be claimed that this Bill will solve all the problems. It is true that delays occur in cases. The intention behind this legislation is to reduce the level of awards and the cost of bringing about the awards.
From time to time court awards hit the headlines in our newspapers, particularly where a person has been paralysed or lost a limb or two. Such people deserve substantial compensation but in some cases there is a tendency to go overboard in regard to such awards. There is also concern about delay in processing cases where people are seriously injured. There must be consideration for those who have to change their lifestyle following an accident. Awards for such people should be calculated on the basis of providing them with an income to allow them to live comfortably. It is unfortunate that in the case of many big awards plaintiffs do not live too long after settlements.
We must understand that the majority of personal injury accident cases are settled before they go to court. Representatives of both parties get together and arrive at certain levels of compensation for different injuries. Obviously, some lawyers can manage to get more from some insurance companies but in the majority of cases the awards agreed are reasonable. I accept that such awards cost insurance companies a lot of money but I wonder if the abolition of juries will mean that awards will come tumbling down. Will premiums fall as a result? I do not think that will happen. However, I hope that the introduction of the insurance disc system from next month will mean that fewer uninsured drivers will be on our roads.
The insurance premium on the cheapest car costs more than £200 but the fines for driving without insurance cover are not as high. I advocate that those caught driving without insurance cover should have their vehicle confiscated. That may sound reactionary but driving without insurance is a very serious offence. There is no doubt that the high cost of insurance is partly due to the number of uninsured drivers on our roads. Two of the largest awards in the past 12 months were awarded by judges sitting without a jury. It must be borne in mind that it is open to insurance companies to appeal the amount of awards. I can recall an award of £1½ million being reduced substantially on appeal.
The point has been made that the abolition of juries will speed up civil injury cases and there is no doubt that that will be so. However, we must remember that there are other reasons why it takes a long time before a case goes to trial. Medical consultants may have to delay for six to 12 months before giving an opinion on the condition of an individual. There is always the fear that arthritis will set in and it is not possible to diagnose that immediately after an accident.
Some time ago there was a backlog of cases in the High Court because we did not have sufficient judges, but that has improved. I accept that it is possible that the abolition of juries will result in greater consistency in the amounts awarded to those injured in accidents but the judges do not come from the same family background. Some come from a sheltered background while others may have come up the hard way. As happens in the District Court in relation to sentencing policies, and in the Circuit Court in regard to awards, judges differ. I am sure all Members will disagree on the amount that should be awarded for the loss of an eye or a leg.
We should look at the proposal again before we decide to abolish a system that has been with us for a long time and has served us well. I am not convinced that the abolition of juries will be of great benefit. I am inclined to agree with some of the criticism of our legal system such as complaints about the Law Society or barristers, but it is too simplistic to say everything in the garden will be rosy after the abolition of juries.
Another matter that has to be taken into account is the cost to insurance companies of the retaining of two senior counsel on either side. Justifiable cases can be made for having one senior counsel and one junior on either side. There could be a rule to that effect. Many barristers would agree that two seniors on both sides are unnecessary. There may be cases when it would be necessary, but many barristers would be inclined to accept that half a loaf is better than no bread. Again, there may be cases in which there would be a need for expertise or specialist knowledge on certain matters, but costs could be shared accordingly and there could be an agreed overall fee, with the insurance companies sharing out the total amount among the barristers employed.
These are matters of greater public concern than the abolition of juries. I have great respect for the Judiciary who have served the country well, but different judges have different standards and come from different backgrounds and most people would prefer to have their cases tried by 12 men and women. We must remember that there is still an appeal from the High Court. I do not know how much public demand there has been for these provisions. I am a solicitor and I have not had a flood of demands for the abolition of juries, but I have had complaints about the outmoded legal system and about the standards operating in it.
I will refer again to the District Court where consultations sometimes have to be held in the rain because of lack of consulting rooms. Proper accommodation in the courts is far more relevant as far as the public are concerned than the abolition of trial by jury.
I do not think a case has been made during the debate that insurance costs will suddenly be reduced after this Bill comes into operation. I do not think that will be so or that insurance costs will be maintained even at their present level. The insurance companies have already said that. If as a result of this legislation awards are reduced, the saving will go into company profits and will not be felt by the long suffering consumers either in reduced premiums or lower costs for getting insurance cover.
This seems to be a simplistic approach to the problem of rising costs. We have had various criticisms of the legal profession and as a solicitor I accept that there are many problems which could be dealt with readily in this respect without this legislation. We would be far better disposed providing facilities for the public, for lawyers and court officials in our courts, and a review should be taking place with this in mind. I am sure officers of the Department would be more concerned to provide improved facilities than to abolish them. The Bill may bring about a speeding up of litigation but all the facts in cases must be heard if they come up for hearing: there would have to be medical reports, further reports and time spent on the setting down of cases. Many cases are settled out of court. There has been a suggestion that if juries are abolished judges will be snowed under with extra work. A review of the entire legal system and its outdated methods should be undertaken.
Another matter that puzzles me is the proposal to abolish juries in personal injury cases, which are the vast majority of cases for trial, but retaining them in defamation cases. I do not know if the Minister told us why the distinction has been made. Does this mean that we are to have one law for one group of people and another law for another group?
What is clear is that the legal system is in need of review and everyone in this House and those involved in the legal system accept that fact. I visited Dún Laoghaire courthouse last week: the premises does not have a public telephone; it has one toilet and consultations have to take place in the yard. We must question if we have our priorities right. That is why I say there is a clear need for a review and such review might even include the question of abolishing juries. However, I do not think the argument for abolishing juries can stand up on the basis that it will reduce insurance costs.
I am glad to note that the Minister responsible will keep an eye on the cost of insurance. We know that because of the number of motor accidents and robberies insurance is very expensive but I do not think that abolishing juries will reduce the cost. If the costs are stabilished I suppose something might be achieved but I do not know if even that will be done. However, I will be very glad to be proved wrong on that point. Perhaps the reduction in awards might be offset against the cost of premiums but I do not think that will happen.
There is no doubt that insurance of any kind is very expensive but this Bill will not solve our problems. Perhaps some awards have been excessive but, equally, others have been dramatically reduced. In addition, some of the largest awards have been given by judges and in some cases they have been appealed. It is not enough to say that the abolition of juries will mean a dramatic reduction in costs.
In some cases instead of a massive award being given, perhaps the needs of the person concerned could be ascertained under various headings, for instance, for medical expenses or for necessary alterations to his home. Thereafter, perhaps the person could be given an income or a certain sum could be bonded and guaranteed in case of a change in circumstances. We all know that a person's medical condition can change after a number of years and the award given should take account of that fact. Obviously in serious cases no amount will compensate a person. For instance, a young person of 20 years, probably good at games, who suffers an accident and is confined to a wheelchair will not regard any compensation, however large, as adequate.
There is a clear need for a review of the legal system. I hope the Minister will come forward with basic proposals, and I also hope that the Bar Council, the Incorporated Law Society and those involved in the courts will come forward with their own proposals to improve the system. There is a need to abolish some of the outmoded rituals existing today in order to bring the entire operation into line with the last years of the 20th century.
I have reservations about the approach being adopted here which I regard as too simplistic. There are plenty of people who bash the lawyers and probably the lawyers are able to take it. I do not mind constructive criticism but adopting a simplistic approach as a response to the problem is not good enough.
I ask the Minister to think again about this Bill. Certainly he should commence the review and do something about facilities in courthouses. I refer again to the conditions existing in Dún Laoghaire courthouse, no public telephones, one toilet and consultations held in the yard. Doubtless other places in an even worse condition. A review of the legal system is long overdue. We have had committees to deal with other matters that possibly were less relevant and less important.
There has been quite an amount of public argument about this matter for some time and I suppose it was inevitable that the Government eventually would address themselves to the question of claims for personal injuries so far as the jury system is concerned. It is fair to say there has been no demand from the general public for this change, that is to say, not from the public so far as it concerns the jury system per se but there has been a great demand from policy holders for reduced insurance costs. The Government's response is rather a simplistic one in that they hope the removal of juries will be the panacea for all the ills of high insurance costs. However, they are misjudging the case in that regard. The jury system may have an input so far as high insurance costs are concerned, but it is not the only factor.
It is stretching it too far to expect us to believe that this one single aspect of the legal system so far as claims for personal injuries are concerned could be suddenly wiped out by this one simple adjustment. That is the not case. The general public and policy holders generally were led to believe that if the jury system was abolished, as has happened in many other countries, insurance costs would be reduced. Now that this Bill has been introduced their stance has altered. We are being put on notice that, irrespective of what happens under this legislation, the general public and the policy holders cannot look forward to insurance premium reductions.
There is need for a greater degree of consistency in the assessment of damages. If that greater degree of consistency applied in the legal system it would speed up the system of awards and would be of considerable benefit to all sides of the argument. The argument has been going on for many years and it appears that even among the judges there is a diversity of opinion so far as the pros and cons of this business are concerned.
It has to be stated quite clearly that the high levels of awards affect the level of settlements which take place outside the court. A very small percentage of cases reach the High Court. It is reckoned that about 4 per cent or 5 per cent of cases go to court, and that about 2 per cent end up before a jury. It has to be remembered that it is the cases which eventually end up before the jury that set the norm for the practice of settling on the steps of the court. The 95 per cent of cases which are settled out of court take their levels of compensation from the .2 per cent which go before the juries.
It is interesting to note that of the .2 per cent, a number of the more serious cases are appealed to the Supreme Court. It is also interesting to note that in the period from 1980 to 1984, 316 awards of the High Court were subsequently appealed to the Supreme Court. The most interesting statistics as far as those appeals are concerned is that in twothirds of these cases the Supreme Court disagreed with the high levels of awards. This seems to indicate that in a substantial number of the .2 per cent of cases, the paymaster — in 95 per cent of the cases this was the insurance company — got a reduction of the original award. It is that type of situation which had led to the unreliability and unpredictability of the system as we know it.
In a case which has been widely publicised the High Court awarded £35,000 in damages. This was appealed to the Supreme Court which referred it back to the High Court. The second jury granted £192,000 which was subsequently appealed to the Supreme Court who finally settled the matter at £108,000. It is this up and down movement in the .2 per cent of the cases which were eventually judged by juries which caused the outcry against the unpredictability of the system. It has always been difficult for insurers to estimate what their outstanding liabilities were. That caused problems in preserving practices of insurance companies and the solvency ratios they had to comply with in getting their licence from the regulatory body, the Minister for Industry and Commerce.
One is at a loss to know whether this new departure will have the desired effect. The Minister is adamant that it will improve the situation, but it appears that even the legal people are divided on the issue and representations are being made from barristers, solicitors, High Court Judges and all levels of discipline. It is a pity the legal profession could not have got their act together and made a recommendation one way or the other because that might have been of some advantage to the House.
To my mind it is questionable whether the awards to which we have been accustomed to the High Court granting will be reduced from the levels now prevailing. At the same time I am satisfied that, if some method of consistency could be brought into the system, insurers and all litigants, plaintiffs in particular, making claims would have a better means of assessing the outcome of their claims. This would have the double advantage in that insurance would be able to estimate what their possible liability might be for the ensuing years following the date of claims being made, and plaintiffs would know what they could expect, which would not necessitate them getting involved in very expensive legal procedures. When all is said and done, the plaintiffs are always in the hands of the professionals so far as settling is concerned. The plaintiff is generally a non-expert and is dependent on the advice tendered by the professional — always the legal profession. If a consistency could be brought into the whole procedure, it would have a great advantage for both sides of the argument.
The Minister made a case on Second Stage but he was not very convincing to the people who have to bear the brunt of these costs, the insurance industry and the policy holders. He was not convincing that anything substantial could be done, but he gave an undertaking that there would be close monitoring of the insurance industry following the introduction of this legislation. We heard that before particularly when emergency legislation was introduced to deal with the insurance companies over the past few years. There was a lot of talk at that time about the need for the supervisory authority to be more active in their role of monitoring the insurance industry. With that in mind a commitment was given to this House that actuarial staff would be brought into the Department. Unless this happened in the last week, the two actuaries who were to have been employed have not yet been appointed.
The Minister says he will take a closer look at all aspects of awards and the level of premium pricing by insurance companies following the experience of this legislation, but he does not have sufficiently experienced staff to deal with that matter. There is no doubt that the increased number of staff in the supervisory sector of the Department is a welcome trend. They have always been undermanned to my knowledge, and they were expected to supervise and monitor the activities of a £2 billion industry. All they had were a few civil servants stretched to do their best and their main preoccupation on a year to year basis was to make sure the Blue Book was published on time. That in itself is a fair piece of statistical analysis for any group of civil servants.
Experienced actuarial staff in this section would have been a great help. It is regrettable that just because the Minister is not prepared to pay the going rate he cannot recruit the people necessary to do the job for him. I would like to think that he will forthwith appoint these people and pay whatever is necessary to do the job. If he is not prepared to pay the going rate for actuarial staff I suggest that at least he take on actuarial consultancy staff and do it by that method, and that might not inflict as much pain on his colleague, the Minister for the Public Service, if he is breaching the guidelines for staff remuneration. Something must be done there. It gives no comfort to the people who are paying the excessive, exorbitant policy premium costs particularly in the commercial sector, to be told that there will be close monitoring in future following this new arrangement of trial by judge alone.
The Minister talked about the legal costs and the multiplicity of legal representatives who appear on both sides in cases of this kind and said that that would be examined critically in the context of the new arrangement. Any time one hears language of that nature in a Minister's Second Stage speech one can be quite sure that the matter is heading for the top shelf and will be quickly and quietly forgotten, and that is all that can be assumed from what the Minister said on the occasion of the introduction of the Courts Bill, 1986. Looking at things critically is not a response that one would have expected when he was going to the trouble of changing the whole system of juries. It would have been preferable to this side of the House if he had decided to do other things also, and one of them would concern that very thing the Minister referred to — legal representation in court cases for personal injuries claims.
Very high insurance premiums operate in this country and the variations on those premium costs are out of line with those of our competitors in Europe and the UK. There are cases where we are so far out of line that premium costs here in certain classes of insurance can be three, four and five times higher than those of our competitors abroad. It is just too simplistic to suggest that high premium costs can be attributed entirely to the jury award system alone. Conflicting statements by interest groups have not helped in this regard. Everybody assumed that substantial reductions would be possible if clear support was given to the abolition of the jury system. It is not fair at this stage for interested parties to put down markers, irrespective of what monitoring or supervision of accounts the Minister becomes involved in through his Department, it will not result in any reduced costs to the hard-pressed policy holders.
I must refer at this stage to other legislation following on immediately after this, that is, the Malicious Injuries (Amendment) Bill, 1986. It seems like a double think on the part of the Government and it is difficult to understand the rationale of their argument in trying to eliminate juries on one hand — they say that if the Courts Bill is passed it will stabilise rates of insurance and minimise the level of increases that might have to be borne by hard-pressed policy holders in future — while on the very same day, not a week, month or a year later, that we are discussing that prospect we are also going to consider the Malicious Injuries (Amendment) Bill which without a shadow of doubt will add significantly to the commercial property premium rates that will be applicable.
When the Minister says that there will be a saving of possibly some £20 million by the adjustment of the malicious injuries legislation, only one other group can make up that difference and that must be the policy holders. It will be claimed that the insurance companies will have to provide insurance cover to cater for these cases, but we all know full well that the insurance companies are in the business of being solvent and they are not going to hand a blank cheque of £20 million per year to anybody just for the sake of placating the Government in their intention. No, there is no question in the policy holders' minds or in the minds of business people, and it is stated specifically by the insurance industry that the Malicious Injuries Bill becomes law there will be a need for somebody to provide adequate cover for people who will find themselves in certain situations where they will face increased insurance premium costs, and that will lead to and escalation of costs in that sector. It seems terribly out of focus that the Minister is trying to suggest in support of abolishing the jury system that there will be stabilisation of insurance premiums and subsequently he is going to penalise the very people who are hardest pressed by way of insurance premium costs, those people located in big urban areas, by removing the malicious injuries cover that they have enjoyed for so many years. The Minister will be hard pressed in his summing up on this Bill to show. good faith in the light of the conflict between those two items.
The Minister made great play when dealing with this Bill. Perhaps the biggest single reason why he is prompted to introduce this legislation at this time is the escalating insurance cost applicable particularly to business, householders, motorists and the whole general area. Policy holders are in every single sector of the general insurance area, and that includes employer's liability, public liability, fire, theft and motor. Every person who holds a policy in that area has had to take on board increased costs over the last few years. Policy holders are unable and unwilling to pay premiums that are demanded by insurers and underwriters. That was not the case until a few short years ago. Policy holders generally recognised that if they required proper cover they had to pay a reasonable cost for it, but matters have somehow gone out of control and now they are not able to meet the demands. People are put in very difficult circumstances in providing proper cover for their property and goods. People need more protection in every walk of life in the times we live in, and there is no question about that. The need is greater every year for people to provide greater protection for themselves.
It has been made very difficult for them because of the escalating costs of insurance. It is unacceptable that the insurance industry is unable or unwilling to provide the protection to which the policy holders feel they are entitled. I would go as far as to say that it is a civil right for individuals and property owners to be covered at a reasonable cost by underwriters. One has property and goods and it must be accepted by all and sundry that it is not proper to price premium costs so high that it makes it impossible for classes of people in certain areas to provide cover for themselves.
We would have to conclude that there is indisputable evidence of a crisis for many sectors seeking cover. There is a lot of media comment in regard to the city centre with its no go and no insurance areas. We hear about hotels, not just one or two, but whole chains of hotels in various parts of the country in serious difficulty because of escalating insurance premiums being demanded of them. Last week, in the Irish Independent of 10 June, an article stated that soaring public liability insurance premiums were pushing some hotels to the brink of closure. That statement was made by the Irish Hotels Federation, a very competent body, who are very closely in touch with what is happening in the industry as a whole. The article, by two well known correspondents, went on to say that hotel premiums have gone up by up to 500 per cent in the past year. I cannot see what relationship there is between premium costs and the rate of inflation. There has been no growth in the hotel sector over the last few years. There are about 700 hotels in this country and half of them lost money last year. That means they have no money for refurbishing, reinvestment or development. Yet in that very difficult situation their prime insurance costs have increased by up to 500 per cent. Any Government would find it hard to justify that increase for any sector and hope that the sector can survive.
Of course, another element is referred to in that article which applies equally to many other sectors in so far as in many instances hotels find it impossible to obtain cover at any cost. Indeed, a case was quoted where premiums have doubled in the past year, so much so that individuals and hoteliers have had to seek insurance cover abroad. I regret that that should be the case, because if that becomes the pattern it will have a seriously damaging effect on the revenue of the insurance companies in this country, their premium total will be reduced and it will inevitably lead to difficulties within their own sphere of activities. We do not want that either because the insurance industry is a fundamental part of our financial institutions and we must ensure its protection.
There are very great difficulties in so far as building contractors are concerned in getting insurance cover. The whole rural housing programme is in jeopardy because local authorities are now obliged to check certificates of insurance before they can enter into a contract with a small contractor to build rural houses. While many people in the House might not see the significance of that, I am sure that Minister Hegarty knows what I am talking about. The rural housing scheme was one of the bulwarks in dealing with the housing problem throughout rural areas and now, because of the cost of insurance cover and because county councils are not entitled or able to enter into a contract with these people if they cannot provide an insurance certificate, many contracts have lapsed. It is having a very serious effect on the construction industry in rural areas. We all know of the insurance costs which householders have to bear and that the motoring sector has borne extremely high costs over a long period. We must have the most expensive motoring in the world. We pay the highest duty costs on new cars, the highest tax on petrol, the highest levels of insurance cover and we even have to pay for those who drive uninsured — now one in six of the total — which results in the Motor Insurance Bureau having to come to the aid of more and more people each year. The outstanding claims can amount to £80 million. Who will pay for that? It will be existing policyholders eventually.
There have been many debates in this House as to what might be done to reduce the cost of motor insurance, but sweet nothing has been done by the Minister. On prodding from this side of the House two years ago, the Minister took on board one of the recommendations from the McLiam report that an insurance disc should be displayed from 1 July on every single insured car. I sought information as to its size and colour and the information it would give, but I am still waiting for it. However, from 1 July this year I take it that the insurance disc will become effective and that we will know which cars are covered. Perhaps it will go some way towards reducing the number of uninsured motorists. Methinks we have a long way to go before motor insurance is reduced to a reasonable amount by international standards. There are too many claims from a claims conscious society and some of the awards can be very costly.
It is not just a matter for the insurance companies to come to the rescue and to provide us with cheaper insurance. There is more at stake than that. There are three groups involved, the Government, the insurers and the community. The parameters necessary to bring about a better situation in this regard have been outlined in many reports over the years, more recently and more succinctly in the report of the Oireachtas Joint Committee on Small Businesses. They did a very good critical analysis of the problem that exist not just for small businesses but for business generally as far as insurance costs are concerned. It is a pity the report did not find its way into the debate here in the House. Perhaps before the end of the year it might, if the Government are still around to provide us with a debate of any kind. It would be beneficial because it clearly indicates some of the areas where the Government could help in bringing about a situation where insurance costs might be reduced. It certainly is critical of Government action to date and about insurers. It can be fairly stated that the community at large have something to do as well.
If all these elements which have been dealt with quite well in that report could be brought together, the general public might be able to look forward at last not just to a stabilisation of insurance costs but a reduction in them. However, there has been no concerted effort to deal collectively with the problem and that is our biggest complaint with the legislation. It is piecemeal. It is just doing something to accommodate a particular element of the problem, whereas there was so much to be done that could have been incorporated in it. There could also have been a commitment to introduce other legislation which would have helped to bring about the stabilisation we are all talking about.
Piecemeal legislation is never really effective and we have seen that proved on more than one occasion in the past. It will simply prolong the frustrations of the various sections that have so much difficulty in this area. It will certainly heighten tensions in the market place. We take it it is guaranteed that by the very force and weight of marching feet this legislation will be passed. So we are facing up to the fact that there will be no jury system following the termination date to be announced by the Minister. But when we have a chance of gaining some experience of what the new situation brings about, if the stabilisation does not become a reality, if insurance premiums continue to escalate at anything like the rate they have been doing in the past few years, then we will have to come to the unhappy conclusion that this change was a waste of time and did not bring about the response we so urgently needed.
The problem of high premiums is not insurmountable. One of the most important aspects we have to address is to reduce the number of claims. If we could reduce the number of uninsured motorists on our roads it would go a long way to reducing the number of accidents and the number of claims for personal damages coming before the courts, and this would bring about a reasonable reduction in car insurance premiums. One only has to look at the number of uninsured motorists here to get some idea of how far out of line we are. One in five or one in six motorists here is uninsured. In the UK where the level of insurance premium is much lower the average of uninsured motorists is only 9 per cent. The average in Continental Europe is only about 4 per cent of all motorists. We are no better or worse in a lot of things than our counterparts in the UK and in Continental Europe. So there must be some basic fundamental reason that other countries can maintain their level of uninsured motorists in single percentage figures while we have 20 to 25 per cent on average.
It must be related in some way to insurance premium costs. If that is the case then something drastic must be done. The legislation might go some way along that road but it will certainly not address the problem we have at this time. Those ininsured motorists also get involved in accidents and quite a number are involved in serious accidents resulting in considerable claims through the courts. Motor and personal accident claims account for a very large percentage of all cases that go to court and if one goes by those reported in the newspapers many are involved in the .2 per cent of all cases that eventually go on to juries.
The average cost of those claims for uninsured motorists each year is about £9 million. That has to be taken up by the Motor Insurance Bureau which is contributed to on a pro rata basis by the individual insurance companies involved each year and that outstanding money has to be met by the insurance company who pass the costs on to their policy holders. So, in effect, it is just one big vicious circle. The jury system might be part of it but the whole uninsured area is probably a larger part of it.
It is a pity that in tandem with what is being done here now the Minister could not have found some new way of dealing with uninsured motorists. I would make one suggestion in that regard. Perhaps it is time we synchronised the registration of cars with the insurance cover given by the various under-writers. All of these matters are now computerised. If one is in Belmullet town at the far end of my constituency and is detained by the Garda it is possible, inside two minutes, to have a run-down on the registration of one's car through the centralised computering service of the Garda. I do not see why the insurance companies should not make their computerised system available to a central computer to match up the registration with the insurance cover. Then it would be very easy to eliminate a lot of those who seem to think they can go along the roads of Ireland unhindered, uninsured and end up in an accident and have the rest of us pay for it.
The number of claims on all fronts as far as general insurance is concerned needs to be reduced. There must be a more realistic approach to risk management in this country. We must provide the incentive through policy variations, recognising the good employer, the good industrialist and the good businessman in the area of safety and security. Not enough attention is paid to that aspect of insurance cover. I presume it is the under-writers who will inevitably have to provide the educational process for the various sections, to point out to them how they can better secure their properties and better make safe the workplaces for their employees. There is sufficient legislation available under the Factories Acts, but that is not always complied with. If it could be established, by a process initiated by the insurers, that there would be a benefit from complying with all the existing regulations, taking no shortcuts, making sure that properties are really secure and that machinery and the workplace are safe and secure for employees, I am satisfied that there would be a considerable reduction in the number of personal accidents. It is those accidents which cause the greatest trauma to the individual, the greatest hardship to the families involved, the greatest difficulties to employers by absenteeism and absence from work due to disability and sickness and the greatest cost outlay to the insurers. All those things could be undertaken.
It would be important to alert individuals and businesses to the need for better standards. How often do we hear about shortcuts being taken in so far as standards of safety in places of work are concerned? There is no doubt that a vast number of personal accident cases in the workplace come from carelessness and sloppy standards. If employers were properly approached by the insurance people on the terms that if they complied with the highest standards and had a good record they would benefit by reduced premium costs, that would certainly improve the position as far as personal injury claims are concerned. Making it worth-while for individuals and businesses to comply with all the regulations and statutes in existence with regard to standards and safety would have a beneficial effect. There is always a price tag on responsibility. Insurers should sweeten the premium load for the good policyholder who is making a conscious effort to improve his standards. Those who are reluctant to comply or unwilling to co-operate on the question of improved standards of safety should be penalised. It should be clear that it is not satisfactory that their negligence or irresponsibility will make it more expensive for everybody else. If they are not complying with the existing regulations, they are acting illegally and irresponsibly.
There should be works committees in many of the places of major employment to keep an eye on these matters for management and report where standards are being reduced or shortcuts taken. To encourage employers to invest in time and money on providing better standards of security and safety in the workplace the policy premium should be sweetend. Making the premium lighter must be an incentive which would bring about a reduction in the number of personal injuries that take place in our factories and places of high employment content. If you reduce the number of accidents, you reduce the number of claims, you reduce the workload on the High Court and the premium cost to individuals and businesses alike.
Insurers could find some way to perfect their monitoring system in this area also. There is not much point in providing a sweetening of the policy premium price if one is not going to follow it up by the right kind of inspectorate. If the State, for reasons best known to themselves, cannot provide this inspectorate, perhaps there is a case to be made for suggesting to the insurers that they have a closer look as to how those to whom they are quoting premium costs are complying with existing regulations and with the incentive packages that I should like to see recommended by them. That would be a very great help to the insurance people generally and to the policyholders.
We cannot overstate the importance of liability insurance for our industry. The bold facts are that Irish industry labours under very high insurance premium costs. This has resulted in a loss of competitiveness over the years. There is a general acceptance by industry and by underwriters that the burden of insurance cover must and should be reduced now. The secret is how to achieve this, considering the pattern of losses which have been recorded in the area of general insurance over the past number of years. These losses started some time in the early sixties and have continued apace since. It is interesting to note statistics to put it in perspective. Between 1981 and 1983 in the area of general insurance losses the amount was about £210 million. It has been averaging somewhere around £100 million per year since and most of the loss has been in the motor and liability accounts.
Employers' liability and public liability losses have been staggering and there has been a steady increase in those losses over the years. The situation must be faced that the losses are far in excess of the premium level in so far as employers' liability and public liability are concerned. It has been stated to be perhaps 150 per cent plus as against premium level. No business could stay solvent with losses of that magnitude outstripping premium level, so there is a crisis to be faced. Whether this legislation is the vehicle to do that cannot be stated yet. Certainly markers have been put down from all sides of the House that in isolation this legislation will not properly and finally address the crisis in general insurance practice in this country.
Employer's liability is of particular concern. Its cost to industry is fundamental because we would all like to see the question of employers' liability being mandatory on industry, but it is not. One does not legally have to have employers' liability in this country. I have been asking that it should be considered actively because it is necessary for employers to have that cover to protect themselves. It is also necessary for their employees. The costs are astronomical. Employers say that they cannot afford it.
I appreciate that this is involved in the Bill, but the Deputy is moving into the insurance area. I would be greateful if he would come back to the Bill.
I took leave from it because there were so many references to it in the Minister's speech.
Passing references.
The Minister made more than passing reference to it.
It is becoming an insurance debate.
If I were to go through the Minister's speech page by page I would find that references to the insurance industry, insurance costs and claims made on the insurance industry in personal injury cases formed the basis of his argument.
In the Courts Bill?
Yes. The basis for the Minister's argument was that the insurance industry was demanding that this take place so that it would help to reduce and stabilise insurance premium costs. There is no other reason put forward by the Minister in support of this legislation except the effect that this has been having on the insurance industry and the level of personal injuries claims made against insurance companies. I take the Leas-Cheann Comhairle's point, but this is a fundamental aspect of it and has to be addressed. If there were no uninsured drivers, if the level was at the average European level, if we had the number and cost of claims against insurance companies seriously reduced, then this legislation would not be before us today. Why throw out an administrative and legal practice that has served the country well in the interests of fair play and justice for so many years unless there was a very strong argument to do so? The strength of the Minister's argument came from the number and the cost of the existing claims being made and being paid for by insurance companies for personal injuries.
Employers' liability cost manufacturing industry £70 million last year. That was up between 30 per cent and 50 per cent on the previous year. That works out at almost £1,000 per annum per employee, which now has to be paid in heavy manufacturing. Imagine the impact that has had on the whole area of our competitiveness in manufacturing industry. What a shame that that is so. The reason it is so is that the insurance companies, in order to maintain their solvency and to meet claims for personal accidents which are placed on them, have had to increase their demands from policy holders each year by very substantial amounts. Had they not to do that, that money could have been used for increased output, reinvestment in industry and job creation in industry. It would be preferable to have that £70 million, or a portion of it, operating in that area rather than having it diverted to insurance costs because of demands being made by the industry. The implication for employment is quite serious. I know the Leas-Cheann Comhairle will appreciate that more than anybody else. We have very staggering unemployment levels at present. Anything that could be done to release money that has to be paid in high premiums to defray the costs of personal accident claims that go to the High Court would be welcome.
The level of premiums is always related to the potential claims. If these are too numerous and too high then there will be an inexorable rise in premium costs. That has a major impact on our position. We are always talking about our free trade environment and the fact that we have to compete in an open economy. We have to maintain our competitiveness or we will not survive as a major exporting country. Our competitors operate in a different insurance cost and claims environment. They operate in a much lower cost environment than we do. Some people operate without any insurance cover. While that can be attractive in the short term, it is self-evident what the consequences of it might be. A good example of it is the number and the cost of personal injury claims in the motor sector. If we were to transport that into the general area and if one in every five or six employers, because he could not stay competitive and keep his doors open because of high insurance costs, decided to go it alone and carry the risk himself, it would not matter because the limited liability status would see him out.
Think of the damage it would do to the whole fabric of the insurance industry through loss of premium income. Think of the damage it would do to their reserving capacity and their solvency ratios. Think of the damage that would ensure if individuals involved in personal injuries had no place to take their claims. Would we then be involved in another enormous compensation fund that would have to be met by subscriptions from the insurers and underwriters collectively? That only means one thing, as it does in regard to the Motor Insurance Bureau. It means that those who are able to pay have their premiums increased still further to pay for those who are irresponsible and do not take the necessary precautions. The insurance industry must play a more compelling role in keeping costs competitive. They can certainly have a major input into the role of safety in the workplace.
The history of the level of premium costs has been quite erratic, to say the least. The attitudes of underwriters in the past have also been quite erratic. That is also referred to in the Minister's speech in so far as EC directives are concerned. It leaves something to be desired regarding the whole question of underwriting. The freedom of establishment regulations have been in force for some time. This means that foreign insurers in the marketplace can come in here and set up office, but they have to comply with the licence granted to them by the supervisory authority, the Minister for Industry and Commerce. When that become operable foreign insurers came into this market. Perhaps this is one of the ingredients which led to the whole problem of rising costs in so far as settlement of High Court cases are concerned. When that directive became operable foreign insurers came into Ireland and the cut price premium war started and lasted until the early eighties.
Market share was the only criterion amongst the battling premium protagonists. Quite a number of foreign insurers moved in since the directive was implemented in 1976 when the barriers preventing entry into Ireland of non-life insurers became operable. About 12 licences were granted. These were new entrants to the Irish market. That represented almost a 60 per cent increase in the number of companies operating. They came in from all over the world. What a scene ensured. There was a cut price premium war which was relentless until in the end it broke the backs of some of those involved. Foreign insurers and indigenous companies which had been there previously made huge losses. These are the losses we are talking about now. As a result, many of these companies had to withdraw.
We know what happened to two large un-named companies in the Irish insurance general sector as a consequence of the punishing premium battle which went on in the late seventies and up until 1982. Those two large Irish company collapses had a very big impact on all we are talking about this evening. The resultant uncertainty is still being felt. The taxpayer has been feeling the pinch and will do so for the next 25 years. If that is to go on for the next 25 years the result of the insurance company getting to grips with themselves in that price war in the late seventies will have to be paid for for many years.
It placed the solvency of many financial institutions at risk at that time. That is accepted by the Minister, the insurers and financial institutions alike. It generally made a mess of the stabilised premium price fixing mechanism which was in existence before the directive became operable. Some of these companies have now gone and we get back to the survivors who stayed on following the price war. Many had to leave because of the losses they sustained. Maybe the result of dispatching some of the outside competition was achieved, but at what cost? A viable and solvent insurance industry is essential to this country and is essential to the ordinary development of Irish business. Every effort must be made to restore business confidence in the industry because it is undermined at present. The basic reason why it is undermined is the high level of insurance costs for policyholders.
If that solvency is achieved by penalising policyholders with increased costs, then both sides will be the losers. Market share will be lost to the insurers and we will have the inexorable rises in premium costs. We will have job losses not just in businesses but also in the insurance industry. That must be avoided. We do not want a return to the price premium war which went on after the freedom of establishment regulations became operable in 1976. This Bill would not have to be introduced if that directive never became operable. I am satisfied about that. We had a good stabilised insurance industry at that time with reasonable costs. They were able to meet their solvency margins. Their losses were minimal.
In effect, everybody was satisfied with the legal system of justice which existed in the country. It is only since these losses began to escalate out of control that it became necessary to do something to salvage the situation. People latched on to the idea that the jury system was one of the elements which was leading to the high costs. I accept there is some justification for that argument. It is not the only dimension but it is a part of it. It has yet to be established beyond yea or nay whether it will have the desired result.
Following the price premium war which took place for a number of years, the freedom of services directive has come on stream. In that circumstance, service will be provided by insurers who do not necessarily have to have any office in this country. They will not have to maintain their premium income here which will cause a major upheaval in cash flow as far as the Government are concerned. That will be a great challenge for the insurance industry. They will then have to compete on unequal terms with major international companies who will be writing insurance from offices abroad while only maintaining a computer terminal in this country. This will have a devastating effect on the insurance industry. There is no doubt that the unions representing the insurance workers and the financial institutions are very concerned about this.
I was pleased to hear the Minister of State, Deputy Collins, following much prodding by me over the past year, seeking a derogation for this country so that the Irish insurance industry will not be punished further until such time as they can get their act together in so far as new technology is concerned. Cost effectiveness by the industry by way of new technology is absolutely essential. We will also have to get rid of and eliminate wasteful practices in the industry. These will have to be examined very carefully if the domestic market share is to be maintained by the indigenous Irish companies. If the insurance industry falters, we will not be able to be accommodated by a change in the jury system. Something else entirely will then have to happen. It would be entirely inappropriate to have the major share of Irish insurance costs and business being undertaken and underwritten by companies that do not have a presence in and a commitment to this country.
The investment income general insurance in particular generates is vital to Government borrowings and the money market. I do not think it is generally understood what the freedom of services directive will mean when it is finally introduced. It is due for implementation in national legislation in 1988. I am asking the Minister again if he will seek the derogation necessary to give us at least five years before it becomes operable. Even that will make it a difficult scene. This has been recognised by the insurers themselves. Only the best will survive. I would like to think that sufficient space will be given to all insurers so that they can all survive in the best interests of an industry which has served this country well.
Because of the price war they were involved in over the years and because of the escalating difficulties in the area of crime and vandalism and the other related matters, the whole thing has become untenable. Hopefully, once this legislation is implemented it will go someway to redress the situation. There may be a prima facie case to do something about it in that area. There is nothing established as yet which will guarantee what was promised in the past — that a reduction in policy holders' premium costs will take place in the foreseeable future. The reverse would seem to be the trend of the public statements being made by people involved in this area at this time.
We must consider another aspect which was dealt with by the joint committee that examined the high premiums because of personal injury claims in the High Court and whose report was published some little time ago. There was particular reference in that report to the levels of crime and vandalism. We have to place on record here that the present level of crime and vandalism is unacceptable to our people. It would appear that the increase in that crime level has gone unchecked. It is a major factor in the increased losses of underwriters in the insurance industry. It is also one of the reasons the Minister says this Bill is necessary and it also constitutes one of the factors for increased business costs.
There is one set of statistics that demonstrates this fact more clearly than anything else. These are the 1984 figures, which are worth repeating here. The 1984 figures for robbery and aggravated burglary show that the numbers involved were 3,007, representing an increase over the previous ten years of 165 per cent. The number of burglaries in the year 1984 was 35,228, representing an increase of 86 per cent over the previous ten years. The number of incidents of arson and malicious damages in 1984 was 2,655, representing an increase over the previous ten years of 163 per cent. Surely those increased percentages demonstrate that we are becoming a lawless society? The implications for insurance and its costs are self-evident, because it is the insurance industry that must meet all of those claims. When one adds the personal injury cases on the motoring side, employers' and public liability cover, fire and theft, the whole area of general insuranc, one arrives at a staggering total, a problem that has not been addressed satisfactorily by the Government of the day.
Reading some of the debates in the course of this type of legislation and the malicious injuries legislation back in 1980 one sees there was clear recognition at that time that something must be done to get to grips with the level of crime and vandalism then obtaining. At that time the Fine Gael spokesman, Deputy Michael Keating, was very loud and antagonistic toward Deputy Séan Doherty, Minister of State on that occasion. I can still visualise Deputy Keating here waxing eloquent on how the Government had failed to address the level of crime and vandalism in this city and the country generally. But that was only a tea party compared with the levels of crime and vandalism we have now. If it was justifiable to make those kinds of references at that time how much more justifiable is it for me to be very critical of the Government for not having made efforts to address this difficult problem? It is regrettable that the Government seek to delude the public that the crime wave is under control. I would suggest that it is not quite fair of them either to suggest that the provision of this Bill will somehow provide a panacea for all of the ills in so far as costs in this area are concerned. There are now no-go insurance areas increasing in number. There have been business closures in this city because individuals were not prepared to continue in business because of fear for their own safety or for that of their stock and property. Therefore, they decided to move out, closing down altogether. I do not believe that to be in anybody's best interest and I say that, even as a rural Deputy. I like to see our capital city as a thriving community, a thriving business, because that is what a capital city is supposed to be — the hub of society and of business activity.
The number of representations I receive from agencies, individuals, communities and associations in business in this city and other large centres concerning escalating insurance costs, damages and claims no longer represents just a trickle. What answer can one give them? Somebody must accept that a problem has been identified and that something needs to be done about it. I contend that a major portion of the blame must be laid at the Government's door. They are the people who should control this by way of legislation and enforcement agencies. There have been many business closures with huge job losses in many city areas. Equally there has been a rise in the protection rackets. We had a debate about it when nobody on the Government side seemed prepared to accept that it was an escalating problem, or indeed that it constitued a problem at all. Yet RTE had a special programme on the subject, interviewing people, putting it beyond doubt that there is a problem of that nature obtaining in the city. I am contending that it is becoming an increasingly difficult one. When something like that gets a grip on an area it does not become merely a no-go area, it becomes a no-insurance area, with claims escalating and, consequently, the costs of general insurance escalating.
There is a reluctance to face up to the crisis. The problem has been sufficiently identified. That was accepted by the Minister in his introductory remarks on Second Stage. The public do not want further identification of the problem. What they now want to know is: what action will be taken by the Government in the restoration of law and order in this city and others throughout the country? If the Minister could give a solemn undertaking that he accepted the level of the problem and was prepared to do something about it, he would have the support of all sides of this House. It should be remembered that it would be in our best interests, not merely to have a free and easy society for ourselves and those citizens we represent, but it would also result in reduced costs and overheads for the business community, with a better climate for business competitiveness. People in the insurance industry would be much happier. They are under considerable pressure at present.
The insurance industry are beleaguered by the number of people critical of the way they are conducting their business. Something should be done by the Government to restore some semblance of law and order to our streets, which would result in reduced insurance premium costs and a much improved, settled position vis-à-vis insurance competitiveness. Despite the best efforts of business in the area of security, the crime wave continues to grow. Businesses in the high crime areas have suffered substantial losses and feel undefended by the law enforcement agencies and hard done by underwriters.
Debate adjourned.