Before moving the adjournment of the debate I was dealing with some of the arguments for and against the abolition of the jury system with particular reference to the level of high premiums that have to be paid by Irish business policy holders. I pointed out that they have reached the stage where they are unwilling, and unable, to pay the premiums being demanded of them. I made reference to the effect those high premiums are having on business generally and the dangers that will ensue if this policy is continued. Many business people will not be able to meet the high cost of insurance and there will be serious job losses. I was critical of the Government's attitude to the abolition of juries and their proposals in the Bill before the House concerning malicious injuries claims. I have no doubt that the provisions of that Bill will involve policyholders in increased premiums to recoup the £20 million per year which the Government must pass on to the insurance industry to be claimed back in premium increases. I gave statistics that make it imperative that some initiative is taken now by the Government to reduce the level of crime and vandalism in Dublin city and restore some semblance of law and order to our streets.
I repeat that in high crime areas businesses have suffered substantial losses and businessmen feel undefended and unprotected by the law enforcement agencies and the underwriters. The Government have failed to provide the law enforcement with sufficient capital and manpower to do the job they were established for. Businesses cannot afford the increases in insurance costs as further overheads, and risks are being taken by businessmen taking out inadequate insurance. That must be of serious concern to the whole business community. Many papers have been written and agencies have been bringing to public notice that under-insurance is the order of the day and is leading to business closures and consequently to job losses with general debilitation in the business community.
Business people are also looking with concern at the Malicious Injuries Bill and insurers will be bound to expand the no-go areas for insurance while those who manage to get cover after that Bill is passed will be saddled with increased costs. It is an extraordinary situation, showing that the Government, in confusion, are producing ad hoc measures and are walking away from their responsibilities in these matters. The sooner they are put out of their misery the better.
While referring generally to the legal system, we are all aware that the District Court has jurisdiction to award compensation of up to £2,500 and the Circuit Court can award damages of up to £15,000. Both courts can do it with a judge or justice sitting alone. Therefore, we have a misunderstanding in regard to the civil jury system. It was thought to be a universal right in injury claims and all civil liability cases. It is normal only in the High Court, where juries decide on liability and the amount of damages. If a judge sitting alone can do it in claims of up to £15,000 in the Circuit Court, why is it not regarded as proper that if a claim was for £15,001 a judge could decide without requiring a jury? As I have said, it has worked quite well in the lower courts.
Can it be stated that a decision of a judge sitting alone has always been inferior to a collective decision by a jury? I should like to get the Minister's response to that question. It has been stated by barristers that collective decisions by juries have not always been superior to those of judges. Why then is it mandatory to have juries officiating in all civil cases at all levels? That is an argument the Minister has not addressed himself adequately to.
Dissatisfaction has not been expressed that there has been inferior justice in the lower courts. The Committee on Court Practice and Procedure, which sat as long ago as 1965, recommended the abolition of juries in all civil cases. It took 20 years for us to get as far as that single item. My objection to this legislation is that the Minister is doing only part of the job here. He is dealing with civil juries but he is not prepared to bring in the other reforms suggested in the MacLiam report and the reports of the Committee on Court Practices and Procedures and recommendations in many papers published since. The Minister has not found it necessary to deal with our entire legal system, including the high costs of litigation and the causes for the high cost of insurance related to the number and the size of claims.
There was also a report from the Oireachtas Joint Committee on Small Businesses which dealt with insurance for small industries. The Minister chose to ignore all those important matters and to go ahead with this single item.
Judges sitting alone can decide certain cases right up to the Supreme Court. It is only reasonable to suggest that they would be enabled to do likewise in ordinary personal injury cases. If there was a suggestion of a noticeable divergence of opinion as between different judges, the Minister could have introduced in this legislation a quantum book on damages so that technical guidelines would be laid down for judges. This has operated in other jurisdictions and they have achieved a better balance in regard to damage awards. Such a system here would do away with possible unpredictability of individual judges and people would not be waiting to see which judge they would draw before reaching settlements.
The Minister spoke about inconsistency in awards by juries but he said nothing about inconsistency in decisions as between judges sitting alone. If there was a standard book of guidelines on damages there would not be inconsistency in regard to personal injury claim awards. All that is necessary is a good standard reference book. Provision for that is omitted from this Bill. That would have allayed fears expressed by many in regard to individual judges, and that has been clearly expressed by barrister associations. Barristers are well versed in law and know the tendencies of particular judges. If they are prepared to put that in writing we must take it in good faith. The Minister has not taken the necessary steps to help in the matter. This is faulty, incomplete legislation. As I said before, it is piecemeal legislation, not fully thought through and will not be of any great consequence in getting a final solution to the high cost of insurance and claims.
Awards must be assessed by professional methods. This is a complex area involving many factors and it lent itself to the professional advice that might have been made available had the Minister opted for an advice system to help the judges. I take it the legislation will be passed and that the Government will not fall because of it. That being the case, surely the Minister might try to improve the Bill even at this stage.
The system of processing civil liability claims should be streamlined. That was recommended to the Minister but it is not incorporated in the legislation and neither is the streamlining and improvement of the whole legal process leading to the finalisation of claims. These are integral parts of the system but to pluck out one item and to make a very limited case is not adequate. The Minister did not make his case well and that is regrettable. If there was a case to be made and if it had been made sufficiently well, we would have had to answer it but that did not happen.
It is quite possible to settle many more cases out of court and obviously that is the intention. If the process could be streamlined, if we had more consistency and predictability with regard to awards, then people would take the option of settling. They would not do so on the steps of the courthouse because by that time all the legal costs have been incurred and they become part of the final settlement. To reduce the size of claims and their cost, they must be settled well in advance of that stage. If the Minister had taken the necessary steps to improve the legal processes we could have ended up with agreement rather than half agreement, as is the case here. In nearly all of these cases juries are dealing with insurance companies. It would be reasonable to expect they would have a certain sympathy and compassion over and above that expected of an individual judge but that is not guaranteed. I have sufficient faith in the judicial system to expect that if a judge had a quantum book on damages and the necessary technical, professional expert advice he would be kept within normal guidelines.
There was no reference to the delays that are an additional factor in actions so far as personal injuries are concerned. It is not reasonable to have delays of two or three years. Such delays are a major factor in the overall cost of litigation. The Minister referred to the legal representation on cases. People in this House and outside it have referred on many occasions to the number of lawyers involved in these cases. There seems to be a universal acceptance that the four-lawyer system is antiquated and is superfluous to the requirements of the system. There may have been need for it in the past for some reason, but today a more equitable system would be to have a two-lawyer system. That could have been addressed by the Minister at this time but he only gave a vague promise that he would look into the matter in a critical way. By that I understand the system will be changed because I presume one does not make a critical analysis of some matter unless one intends to change it. The Minister's reaction to this problem has not been adequate.
There is also the matter of expensive specialist witnesses. Having doctors, consultants, engineers, architects and other expert witnesses standing by for long periods must add substantially to the overall cost of awards in the High Court. All these people stand by in advance of the case being called and even though the case may be settled on the steps of the courthouse the witnesses have to be paid. That process could be streamlined. I accept it may be necessary to have cross-examination of expert witnesses on occasion but I am satisfied much of that could be done by documentation. That is particularly so if there is not a long drawnout court battle, with individuals trying to convince other individuals that their point of view is the only one that matters. All these matters should be dealt with in a professional way by way of points of law.
The Minister could have gone much further in dealing with this problem. The fairest way to put the matter is that justice delayed is always justice denied. A long delay of several years not only can have a material effect on the people involved but it can lead to considerable injustice for people on both sides. It is not just the plaintiff having a bad time because of the delay: the insurers suffer. They must keep their money on reserve. They have to estimate what is needed in their reserve ratio in order to cater for their liability and that puts a strain on their investment income, on the premium reserve and on their solvency. All of this leads to increased costs for the policy holders and that is what this is all about. The Minister made no bones about that in his contribution. This is an effort to bring the cost and level of claims into some kind of order. Legal costs account for 20 per cent of liability claims payments. Adding 20 per cent to the cost inevitably must mean substantial premium increases that have to be borne by the policy holders, those who are lucky enough to have reasonable cover. Unfortunately, fewer and fewer people are able to get the cover they require at a reasonable cost. It has had a significant effect on business, job creation and job prospects.
As far as I am concerned, it is not suitable in a democracy to have no-go areas in a city, to have no insurance areas in a city, to have certain classes of business which cannot get a reasonable insurance cover. I believe that in the long term that must have a debilitating effect on the insurers, the underwriters and business generally, and will lead to greater demands to have the freedom of services directive introduced here at the earliest possible date. I am on record as seeking a derogation in that matter for at least five years to allow the Irish insurance industry to cope, to get technological advances geared to the average one expects in these matters in the European sense.
I know from public statements made by leaders in the insurance world that if that freedom of services directive in its present form comes in, it will place considerable strain on companies who, by the nature of their returns in the Blue Book, find it difficult to meet their solvency margins. They are all solvent at this time but they say the only reason they are maintaining their solvency is that they get increased premium rates together with their investment income. That investment income has been reduced. The rate of inflation and interest rates are down and, consequently, their investment income return is also down. That means they have to reserve more of their premium income to maintain the balance for their liability expectations. This is putting existing insurers under pressure. If some of that premium income is hived off to foreign companies, one can only imagine the effect that would have not just on the insurers, but also on the Government agencies which borrow substantially from that invested premium money.
In all those circumstances, I regret that the Government could not put a right package together, that they could not have addressed themselves to the four items mentioned in the Oireachtas joint committee's report on the insurance business. The Government, the insurance underwriters and the Community should work in tandem and a proper package should be produced so that we would see an effective means of dealing with the escalating costs of insurance for all sectors in the general insurance area. We expected them to deal effectively with the volume of claims, the level of compensation, the legal system, risk management and the level of crime and vandalism. These items have been identified, written about and reported on for the past 20 years, but now all we get is this one piece of legislation which is not even complete in itself. The Minister would do well to reconsider his position and perhaps improve the Bill considerably on Committee Stage.
Deputy De Rossa rose.