I move: "That the Bill be now read a Second Time."
I welcome the opportunity to bring the Civil Liability and Courts Bill 2004 before this House following its passage through Seanad Éireann. The Bill was generally well received in the Seanad. The debate was constructive and helpful and, arising from the debate, a number of amendments have been made to it.
The Bill implements certain commitments in An Agreed Programme for Government, including relevant recommendations of the Motor Insurance Advisory Board, MIAB, and changes the law on civil liability in some other respects. By introducing new penalties for fraudulent and exaggerated claims it tackles the so-called "compensation culture". The Bill also provides for major procedural changes in relation to personal injury actions to reduce the time taken and the costs involved in processing such actions. In addition, the Bill amends thein camera rule, provides for the disposal of part of the funds of suitors and makes provision in relation to the jurisdiction of the Circuit Court in proceedings relating to land, consequent on the ending of the rateable valuation system.
The Bill complements the Personal Injuries Assessment Board Act 2003, which was sponsored by my colleague, the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Harney. The PIAB was established to address the situation where liability is not an issue. The measures contained in this Bill are aimed at cases where legal action is instituted in the courts.
I am convinced that this Bill, when in force, will help to alleviate the insurance burden on customers and business and the cost to public authorities of personal injury actions. It can do this without compromising the right of persons injured through the wrongful act of another to be compensated for their loss. Substantial progress has been made on personal injuries premiums which are moving in the right direction. Employers' liability premiums and public liability premiums are also moving in the right direction. Nothing can be taken for granted. Increased competition in the insurance area coupled with the raft of measures taken by the Government, on foot of the commitments in the programme for Government, have produced results. Those results must be sustained and the reforms involved must be driven home and made permanent, not just as some passing phase.
In regard to civil liability, this country faces serious competition as a location for economic activity. One of the chief negatives in Ireland is the civil liability culture, which is probably one of the most "generous" schemes in Europe. This is funded by an insurance premium underpinning which is probably one of the most penal on enterprise and on ordinary citizens in the European Union.
As in the Seanad, I look forward to the views which will be expressed in today's debate and I will be as accommodating as I can be in that regard. I turn to the main provisions of the Bill. Part 2 deals with civil liability and provides for procedural and other changes in actions to recover damages for personal injuries.
Section 6 amends the Statute of Limitations (Amendment) Act 1991 by reducing the limitation period for personal injuries actions from three to two years to ensure that claims are brought forward in a timely fashion. Members will recall that the Bill as published proposed to reduce the limitation period to one year. This provision was discussed in detail in the Seanad where it was argued that the proposed one year period was too short, particularly in cases of medical negligence. From my own experience in the legal profession, I can appreciate the problems which can arise in such cases and, having regard to the views expressed in the Seanad and elsewhere, have agreed to set the limitation period at two years. There is an emphasis in Part 2 on the provision of full information on the claim being made. The reduction from three to two years is made in the context of the obligation to send the initial warning letter, which is an innovation.
At the end of the two year period, it will not suffice to issue a general plenary summons with a general endorsement of claim saying the plaintiff's claim is for damages for negligence. At the end of the period, a pleading will have to be served which rolls up the original summons and statement of claim in civil procedure. The plaintiff will have to state in his or her first court document the entirety of the claim as known to him or her. That is another time constraint which must be taken into account in the context of adopting or changing the Statute of Limitations. As people involved in civil litigation will remember, it was very easy simply to stop the clock with a plenary summons. It will not be possible to stop the clock with a three-line summons from now on, rather it will be necessary to set outin extenso what a claim is all about.
Section 7 provides that where a plaintiff fails to serve a notice on the defendant within two months of the date of an accident or the date of knowledge, he or she may be — not necessarily must be — penalised in costs. Furthermore, the court may, not must, draw such inferences from the failure as appear appropriate. Under the section, there is a general duty to notify and warn the other side that a claim is in prospect, particularly in cases in which solicitors are involved.
In many cases, time limits set down by rules of court are not adhered to which causes delays in the progress of actions. This has been the subject of some criticism at European Court of Human Rights level. Therefore, section 8 makes it a function of the court to ensure positively that parties to a personal injuries action comply with rules of court. Extensions to time limits will only be allowed where both parties agree or where they are necessary to enable an action to be properly prosecuted or defended or where the interests of justice require an extension. An extension will not simply be available as a matter of course to a party from now on. The culture must change in this respect.
It is a common complaint of our current personal injuries system that defendants are often unaware of the details of a claim until late in proceedings. Sections 9 to 12, inclusive, seek to remedy this difficulty. Section 9 provides that a personal injuries action shall be brought by means of a personal injuries summons and outlines the information which must be contained in such a summons. This information includes particulars of all items of special damages claimed, the wrongful acts of the defendant, the circumstances of the wrong and each instance of negligence. In many cases, further information may be required from the plaintiff by the defendant. Section 10 deals with this issue by listing items of information which may be requested and, as a result, must be supplied. Where a claim is made for earnings or other income, the plaintiff is required on request to furnish documents from the Revenue Commissioners or the Minister for Social and Family Affairs. Provision is also made to give the courts power to deal with non-compliance with a request under the section.
The need for full information applies also to defences and counterclaims. In section 11, it is provided that a defence must specify those elements of the claim for which the defendant does or does not require proof. The defence must also contain a statement outlining the grounds on which a defendant claims he or she is not liable for any injuries to the plaintiff. In respect of counterclaims, the section lists those elements which must be included. In essence, a counterclaim must contain all the information required in a personal injuries summons as outlined in section 9. The intention with this section is to ensure that a plaintiff is fully apprised of the details. Section 12 requires that all pleadings contain full and detailed particulars and that such pleadings must be lodged in the relevant court. Deputies will note that I introduced an amendment to this section in the Seanad which provides that all pleadings shall be in a form prescribed by rules of court.
A key element of the Bill is contained in section 13 which is designed to combat false and exaggerated personal injury claims. Under the section, parties to a personal injury action must swear an affidavit verifying the contents of any pleading or further information requested under section 10. I have made a minor amendment to section 13(4)(a). Whereas the Bill originally required that a verifying affidavit be lodged in court not later than seven days after the service of a pleading, this period has now been changed to 21 days. I took this action in response to amendments tabled by Opposition Senators and other views which were expressed to me.
Section 13(5) makes it an offence to make a statement in an affidavit which is false or misleading and which the person knows to be false and misleading. As Deputies will see, this is a serious criminal offence which attracts a ten-year penalty. The offence is not prosecutable summarily except where the District Court accepts jurisdiction. A further aspect of this provision — as outlined in section 13(8) — is that the section applies not only to actions brought following its commencement but also to actions pending at that time where one party requires another to swear a verifying affidavit. Consequently, the reform will become operative from a very early date once the provision is in force.
Section 14 provides that a court may direct the parties to a personal injuries action to meet in a mediation conference to discuss and attempt to settle a case. A chairman of the conference may be agreed by the parties or, in the absence of such agreement, appointed by the court. It is vital in mediation that the confidentiality of all parties is respected. To ensure this is the case, section 14 provides that the notes of a chairperson of a mediation conference and all communications during it shall be confidential and cannot be used in evidence in any subsequent civil or criminal proceedings.
Section 15 provides that, if necessary, the chairman of a mediation conference must prepare and submit to the court a report of the conference. I introduced an amendment to this section in response to points made by Senators which will ensure that any report shall also be provided to the parties involved in the action. The report shall outline whether the conference took place, what issues, if any, were agreed and, where an agreement has been reached, contain a copy of the settlement terms signed by all parties. In cases where a party has failed to comply with a direction of the court under section 14 to participate in a conference, the court may direct that party to pay costs incurred after the direction.
My intention in introducing section 16 is to put in place a system whereby parties state their terms of settlement before a case proceeds to trial. The section requires the plaintiff and defendant in a personal injuries action to serve a notice of offer of settlement on the other party. It remains open to a defendant to state that he or she wishes to offer a nil amount by way of settlement. Such offers of settlement will remain open for a period to be prescribed by regulations. While a judge hearing a case will be aware that offers of settlement have been made, he or she will not be aware of the terms of such offers until after a judgment has been delivered in the action. The court shall, however, have regard to the offers and the conduct of the parties in making the final offers when considering the costs of an action.
The reasonableness or unreasonableness of the behaviour of the parties will be directly reflected in the decision on costs at the conclusion of a case if that becomes relevant. People who play hardball, ham up claims or behave unreasonably and force another party to defend a claim will find themselves in danger of being seriously penalised on costs. That will have the positive effect as members of the legal profession find there is a serious risk to their own interest in a case, which is usually costs, if they play hardball or behave unreasonably.
In section 17, the concept of pre-trial hearings is introduced. A pre-trial hearing is intended to determine what matters, are in dispute and require to be decided at a trial. In section 18, provision is made for a court to direct that evidence may be given by way of affidavit. In many personal injuries actions conflicting evidence from experts must be decided on by the court.
Section 19 allows a court to appoint approved persons to investigate and give expert evidence on any issue the court may direct. The section provides also that any party to a personal injuries action shall co-operate with an approved person. The provision is intended to allow the court to appoint to assist it an expert independent of any expert witness retained by the parties. If it must be decided whether somebody is or is not suffering from chronic back pain, it will be open to the court to appoint a medical practitioner with expertise in that area to prepare an independent view. The justice provided will not simply be adversarial as the court itself will have its own independent view of the matter. While the expert testifying in those circumstances will be liable to cross-examination, the provision will lead to a less adversarial system of expert testimony than currently exists.
Section 20 is an important provision dealing with intervention in a personal injuries action. It provides that where an appeal is taken to the Supreme Court, the court may, where it considers that any matter in the case is of exceptional public importance and the action is one of a class of claims in which the same or similar matters arise, invite appropriate persons to make submissions to it. Such an intervention may come about at the initiative of the court, at the request of any party or of any person who is not a party. An issue may arise in a series of cases which is of exceptional public importance and goes beyond the interests of the parties before the court.
This could, for example occur within the ambit of nervous shock. If, for example, when walking down a street I witness a collision between two people causing fatal injury to one of them and I suffer shock and injury on account of what I have witnessed, the ambit of that right to claim damages has serious implications. Recently, for example, we had a case where somebody working in a hospital accident and emergency unit or a morgue claimed damages after suffering nervous shock arising from a traffic accident.
This gives rise to the question of reasonable foreseeability and proximity. This is not just a matter of a good or bad barrister spending an afternoon in court arguing the toss between a plaintiff or a defendant and coming to a conclusion on this issue. The Attorney General or others may want to tell the Supreme Court that such a High Court decision extends the concept of reasonable foreseeability or proximity too far and will have general repercussions if it becomes a general application.
Section 21 provides that a court should have regard to the book of quantum produced by the Personal Injuries Assessment Bureau when assessing damages in a personal injuries action. Subsection (2) provides that this shall not operate to prohibit a court from having regard to matters other than the book of quantum when determining damages. This is an effort to bring some degree of joined-up thinking to the issue so the book of quantum will not be a document that gets discarded or left behind. It will be a document relevant to court cases and must, therefore, be maintained in a condition suitably relevant to them and PIAB proceedings.
Section 22 deals with the issue of actuarial tables. The section provides that the Minister may prescribe actuarial tables for the purpose of assessing damages for future financial loss in personal injuries actions. The court is required under subsection (2) to refer to such tables in making its assessment of damages. Subsection (3) provides for the designation of a person to prepare such tables.
Section 23 will enable the Minister to fix by regulation the rate to be used by the court to discount future losses to their present value. By doing this, I hope to obviate the need to call expert actuarial or economist evidence in cases where there would be disagreement between the parties as to what the discount rate should be. This would have the effect of creating greater certainty on the subject and of reducing costs.
An essential element of the Bill is the necessity to reduce the number of false and bogus claims for personal injuries. Sections 24 and 25 seek to tackle this issue. Section 24 deals with the issue of false evidence. It makes it an offence to give, adduce or dishonestly cause to be given or adduced evidence that is false or misleading and which a person knows to be false or misleading. Equally, it shall be an offence to give, adduce or dishonestly cause to be given or adduced false information to a solicitor or expert on the other side for the purpose of codding them as to the nature of a case. Section 24(4) provides that this section applies to personal injuries actions pending at its commencement as well as to subsequent actions. It cannot, however, be retrospective in its effect. That an action has commenced before the Act comes into operation does not mean there will be a free pass with regard to such falsity.
Many Deputies share my concern that, in some cases, persons have misled the courts on aspects of their claim and yet have walked away with a substantial award in their favour. This is unacceptable. Section 25 will deal with this situation. It provides that, where a plaintiff in a personal injuries action gives, adduces or dishonestly causes to be given or adduced evidence that is false or misleading and which the plaintiff knows is false or misleading, the court shall dismiss the plaintiff's action unless this would result in injustice being done.
This creates two conditions. From now on, if people tell lies in support of their claim for personal injury, they risk losing everything. This also gives defendants an incentive to examine cases carefully because, if they detect dishonesty on the plaintiff's side, the case can be dismissed in its entirety. This provision is not made to provide a bonus to insurance companies but to deter fraudulent cases. People must understand that if they take personal injuries actions, they will lose out if they come other than with clean hands as genuine claimants. If they come with dishonest intent either to exaggerate or tell lies about their case, they will get nothing.
If, for example, a plaintiff states that as a result of fracturing his or her leg he or she can no longer play golf and subsequently a video is shown to the court of the person playing golf, the person will not only not get the extra damages he or she would have got as a result of not being able to play golf but will also lose the full damages and the case will be thrown out of court emphatically. Costs will also be charged.
Section 26 deals with the issue of collateral benefits. The Civil Liability Act 1961 and the amending legislation of 1964 are amended by providing for the deductibility of charitable donations made by the defendant if he or she specifies in advance that the donation is being made on that basis.
Section 27 provides that any income, in respect of which a claim is being made but which has not been returned or notified to the Revenue Commissioners will be disregarded by the court in assessing damages save for situations where the court considers that an injustice would be done. Therefore, compensation cannot be made for black market income.
I already mentioned offences committed under this Part of the Bill. Such offences are serious. Section 28 provides that, if convicted on indictment for an offence, a person shall be liable for a penalty of imprisonment for a term not exceeding ten years or a fine not exceeding €100,000, or both. A summary conviction, which is not available as of right, carries a maximum penalty of one year in prison or a fine of up to €3,000, or both.
Section 29 provides that the Courts Service shall set up and maintain a register of personal injuries actions, which shall contain the name, address and occupation of the parties to personal injuries actions. The register shall be published on the Internet and in any other form the Courts Service considers appropriate. This will make it clear that a person cannot be a multiple claimant and hope to get away with it if there is any dishonesty involved. A person cannot keep falling over potholes in a variety of different local authority areas and hope the fact of the various claims remains secret. Claiming records will be noted and available.
Section 30 will remedy what might be regarded as a deficiency in the Personal Injuries Assessment Board Act as passed in the Oireachtas towards the end of last year. Section 54(1)(c) of the Act provides that one of the principal functions of the PIAB is to cause a cost-benefit analysis to be made of the legal procedures and the associated processes employed in the State for the purpose of awarding compensation for personal injuries. While Section 54(2) provides that the board shall have all such powers as are necessary or expedient for, or incidental to, the performance of its functions under the Act, it is considered opportune to provide a specific power to the PIAB to require any person, including a Minister or a body established by or under any enactment, to provide it with any information it may reasonably require for the purposes of the performance of this particular function under section 54(1)(c). Subsection (2) imposes a duty to comply with a requirement of the PIAB in this respect. This means that the PIAB can seek a court order against any non-compliant person or body.
Part 3 of the Bill provides for the realisation of the dormant funds of suitors of the High Court, and of the special account for small balances in the High Court and their transfer to the Exchequer for the benefit of projects of the Courts Service. Dormant funds of suitors of the High Court result mainly from unclaimed funds of wards of court, funds invested on behalf of minors, tail balances, bail deposits, civil lodgements as well as amounts of interest accruing on capital sums lodged in court and subsequently paid out. Funds become dormant when there has been no activity over the preceding 15 years, with the exception of small balances which are deemed to be dormant after five years. Periodic efforts made by the Courts Service to refund dormant funds to account holders have met with limited success.
There have been four previous Funds of Suitors Acts, in 1959, 1963, 1966 and 1984. Those Acts allocated the dormant funds to certain social, cultural and court rehabilitation projects such as the Cork Opera House, the Abbey Theatre, the Peacock Theatre, The King's Inns and the Children's Court.
When I originally introduced this Bill in the Seanad, the then estimated value of the dormant funds was €6.4 million. However, the Courts Service had not at that stage completed its full examination of such accounts and in the interim certain amounts became dormant. Several of these were unusually large. I am now informed by the Courts Service that the value of the dormant funds is currently estimated at €9.4 million. The critical point on this occasion is that the funds transferred will be used now and in the future for purposes in regard to the defrayal of costs involved in the provision, management and maintenance of court buildings, as provided for in the relevant section of the Courts Service Act 1998.
Following further consultation with the Courts Service, the Department of Finance and the parliamentary counsel, I intend to introduce on Committee Stage certain necessary and primarily technical and procedural clarifications and additions to this part of the Bill by way of amendments. In particular, having noted comments in the Seanad, it is my intention to provide for a public notification procedure of the transfer of the funds and also to provide for the creation of a proper registration system for the dormant funds. These matters did not feature in any previous funds of suitors legislation, but I believe they are now necessary to assist and inform any persons who might have a claim on the dormant funds.
Chapter 2 of Part 3 deals with miscellaneous court provisions. Among the court provisions included in this chapter are the amendment of thein camera rule and provisions regarding the jurisdiction of the Circuit Court in proceedings relating to land. Section 36 amends the in camera rule, particularly as it relates to various family law statutes. This was the subject of much discussion in the Seanad. I am not happy with the current construction of the section and will table an amendment on Committee Stage to remedy the apparent deficiencies in the section as drafted. As currently drafted, I am concerned that the section could expose people to the fear at any rate, if not the reality, that their private affairs might be made public in a way that is unacceptable. At present, costs bear interest from the date of judgment even though the solicitor has not yet submitted the bill, which is strange. This situation is not fair to the party who, ultimately, has to pay the costs.
Section 37 amends section 30 of the Courts and Court Officers Act 2002. The net effect of the amendment is that interest on legal costs will not be payable until the amount of costs is agreed by the parties or until the costs are taxed or measured. Thereafter the costs will bear interest at a rate specified for judgments from time to time.
Section 38 provides that High Court registrars shall in future act as registrars to the Central Criminal Court when it sits in Dublin. The role of assigning persons to act in this capacity is currently carried out by the Dublin County Registrar. Deputies will be aware that the Central Criminal Court now sits on occasions outside Dublin. Section 39 provides for the carrying out of the registrar functions in those circumstances by the local county registrar or a member of the staff of the local Circuit Court office when the Central Criminal Court is sitting at that location.
Sections 40 to 47, inclusive, address the implications of the Valuation Act 2001 for court jurisdiction in property matters, mainly in respect of the Circuit Court. At present, jurisdiction is determined on the basis of rateable valuation and jurisdiction is granted to the Circuit Court where the rateable valuation does not exceed €253.95. The introduction in the Valuation Act 2001 of a new valuation system which more accurately reflects current property values requires a modification of these provisions. These sections change the jurisdiction limit of €253.95 rateable valuation to a market value of €3 million. The term "market value" is defined in the legislation.
Section 48 and 49 relate to the exclusion of certain witnesses. Section 49 is not now needed and I will propose its deletion on Committee Stage. Section 48 is designed to ensure that witnesses may be excluded from a trial until such time as it is necessary for them to give evidence. This will also prevent them from being informed about what is happening in the court in their absence. This will prevent witnesses being influenced or tailoring their evidence to match what they hear being put to other witnesses in court or what was said earlier in a trial.
The purpose of section 50 is to amend section 46 of the Courts and Court Officers Act 2002, which has not been brought into operation, to remove the possibility of judges being required to deliver judgments within prescribed periods but to preserve the purpose of the original provision, which was the requirement for a register of reserved judgments, which will be accessible to the public. I have concerns that section 46 of the 2002 Act, as it stands, might amount to an inappropriate interference with the exercise of judicial functions. The reason for this amendment is to make it clear that there is no such intended interference.
I indicated some amendments I propose to bring forward on Committee Stage. I am glad to inform the House that, following the approval of the Government, I am also amending the Bill to provide for an increase in the number of the Judiciary — three in the High Court, three in the Circuit Court and two in the District Court, and currently there is a vacancy pending in the District Court. This provision will mean that if the Bill becomes law, the process will be put in place to appoint nine judges in the near future. These increases should go a long way to reduce delays in the courts and to improve their effectiveness.
Among the amendments I intend to table on Committee Stage is one that will provide for certain new possibilities in regard to applications for the issuing of summonses for offences to be tried in the District Court. The amendment will provide for the establishment of an office of the Courts Service, in addition to the ordinary District Court office procedures, to which applications can be made for the issuing of summonses and from which summonses can be issued. The establishment of this new centralised office will not remove the role of the local District Court office in the issuing of summonses in the normal way. It will allow for organisational changes to facilitate the full implementation of the penalty points system — in other words, it will provide for a central application for summons in certain cases where that kind of operation has been carried out. Provision is being made for both the application and the issuing to be carried out by electronic means.
This Bill is enormously significant in the context of personal injuries actions and the other changes it introduces, and I commend it to the House. There are other aspects I would like to have addressed in the Bill. There are aspects of civil liability law which I had intended to amend, and had canvassed in this regard, such as those relating to voluntary bodies, community activities and raising the bar against claims made against those bodies, but, unfortunately, I had to make a choice. Either I acted now to deal with the immediate insurance premium problem and a compensation culture problem or, alternatively, I waited until complex issues of civil law were teased out at great length and all the legal implications were dealt with. I regret that I have had to compromise by leaving that material out of this legislation, but it is something I will be disposed to revisit if the opportunity presents itself.