Dáil Éireann debate -
Thursday, 5 Jul 2007

Vol. 637 No. 7

Personal Injuries Assessment Board (Amendment) Bill 2007 [Seanad]: Second Stage

Minister for Enterprise, Trade and Employment (Deputy Micheál Martin)

I move: "That the Bill be now read a Second Time."

The issue before us, which requires the Personal Injuries Assessment Board Act 2003 to be amended, centres on the activity following the PIAB making a formal award. While PIAB awards mirror court awards, as both have regard to a book of quantum to determine the appropriate award to be given, some claimants choose to reject the award and commence litigation proceedings in the hope of receiving greater compensation. It is their right to choose this course of action and this Bill in no way interferes with that right. However, as these proceedings advance, some claimants are accepting the same amount as the PIAB award but are also recovering legal costs and additional costs of up to €1,500 to cover the cost of engaging a solicitor to assist with the original PIAB claim. The proceedings were therefore unnecessary for the claimant to receive the same level of award.

This development completely undermines the rationale and the positive impact of the Personal Injuries Assessment Board. By any standards, a charge of €1,500 to assist in filling a form is exorbitant, uncompetitive and unsustainable. The PIAB offers an independent and impartial monetary assessment of damages based on medical evidence, in a non-adversarial document based system and without the need for an oral hearing. Claimants can be assured that the amount of damages reflects what is awarded in the courts. It is a matter for each claimant to either accept or reject this fair and impartial assessment. If they decide to reject this assessment and enter the litigation route, they need to be aware there are risks regarding legal costs. There is no intention in this amendment to the Personal Injuries Assessment Board Act 2003 to interfere with claimants' rights of access to the courts. However, the Bill is entirely consistent with the objectives of the principal Act to prohibit, in the interests of the common good, the bringing of unnecessary legal proceedings. The Personal Injuries Assessment Board Act 2003 and this Bill are definitively pro-consumer, in as much as they highlight the cost risks in taking legal proceedings and contribute to lower insurance costs.

If the situation is allowed to continue, the consequences will be far-reaching. The cost burden will fall on the consumer and business. We must not forget that it is only a few years since businesses were being squeezed out of existence because of the spiralling costs of insurance. This was an unhappy situation and the establishment of the Personal Injuries Assessment Board has done a great deal to address it. The Joint Committee on Enterprise and Small Business made the following recommendation in its third interim report on reforms to the insurance market: "Where, not having accepted a PIAB award, the court award is equal to or less than a PIAB award, legal costs should not be allowed to the claimant." The Bill implements this recommendation.

The purpose of the Personal Injuries Assessment Board (Amendment) Bill 2007 is to provide that in certain circumstances, where a claimant rejects a PIAB assessment that has been accepted by a respondent and where he or she fails in any subsequent proceedings to get more than the amount of the PIAB assessment, he or she will not be entitled to legal costs. Section 1 of the Bill provides that two new sections are added to the Personal Injuries Assessment Board Act 2003 as follows. A new section 51A provides that where a claimant rejects a PIAB assessment that has been accepted by a respondent and where the claimant fails in any subsequent proceedings to get more than the amount of the PIAB assessment, he or she will not be entitled to legal costs. A new section 51B provides that no legal costs shall be allowed for the making of an application to the PIAB. Section 2 of the Bill provides for the citation of the new Act.

The PIAB was established in April 2004 as part of the Government's insurance reform programme, with the aim of allowing certain classes of personal injury claim, where liability is uncontested, to be settled without the need for the costs associated with litigation. The threat of rising insurance costs at the time posed serious risks to Irish business and the economy generally. Under the Personal Injuries Assessment Board Act 2003, claimants are obliged to submit claims to the PIAB. They may submit their claims directly or they may employ a solicitor at their own cost, which is something similar to the Employment Appeals Tribunal.

Since its establishment, the PIAB has successfully fulfilled its legal obligations and is now assessing claims three times faster and four times cheaper than under the old litigation system. By the end of May 2007, the PIAB had made actual savings of more than €45 million on awards totalling €115 million, when compared with the old, unwieldy, adversarial and litigation-based system. This is quite an achievement in such a short space of time and can only be good news for accident victims, business and consumers generally, who have seen big reductions in insurance premiums.

In addition to the provision of these savings, the PIAB has succeeded in establishing a new non-adversarial culture of settling claims. It has put paid to the long wait for compensation and the adversarial approach to the process that previously led to huge uncertainty and stress for claimants. Within a few years the old system has been replaced by a speedy, low cost, user-friendly system. In 2005, personal injury cases going through the courts system dropped from over 35,000 cases in 2004 to less than 5,000. The effects are felt throughout the court system where valuable time has been freed up to deal with cases that should more properly reside there.

The PIAB is a new body that has significantly changed the environment for making personal injuries claims, and is the subject of regular challenge. I am aware of these challenges, and the Government will take whatever steps are necessary to ensure the board is not undermined in its ongoing work.

It is projected by the Personal Injuries Assessment Board that an absence of corrective legislation has the potential to lead to the rejection of almost all PIAB assessments which will subsequently proceed to litigation for the sole purpose of securing costs. The Bill addresses the issues I have described to ensure the stated Government policy of streamlining the settlement of personal injury claims is not permitted to be circumvented in the manner currently evidenced.

I emphasise to the House that this Bill will in no way limit claimants' range of choices or access to the courts. The current amendment is a short technical proposal designed to address a significant risk to the intent of the Act. With this in mind the co-operation of Deputies in assisting the smooth passage of the Bill through this House would be greatly appreciated.

Deputy Phil Hogan

I wish to share time with Deputies Creighton, Flanagan and D'Arcy.

An Ceann Comhairle

Is that agreed? Agreed.

Deputy Phil Hogan

Fine Gael supported the setting up of the Personal Injuries Assessment Board but we cannot support this Bill. It was the Fine Gael Party that first called for a mechanism to be put in place that would lead to reduced charging by the various intermediaries that were in place in order to speed up the processing of those claims in a less costly manner. Ultimately, we got the Government to act but a legal and perhaps constitutional principal is being trampled on here.

As has been spelt out, the purpose of the Bill is to provide for a situation where a claimant rejects a PIAB assessment that has been offered and where they fail to win more than the amount offered by the board when they go to the courts. I understand the logic behind that. Nobody wants to encourage frivolous claims. We co-operated with the House on the Civil Liability Bill when the Minister for Justice, Equality and Law Reform brought that Bill forward in 2005 to deal with some of the exaggerated claims. Nobody wants to tie up the time of the courts unnecessarily or add to the costs incurred by businesses and employers. This Bill, however, is a serious step in terms of the rights of citizens, aiming as it does to restrict through discouragement the exercising of the legitimate democratic and legal rights of citizens.

I want to quote directly from representatives of the Government at the time of the passing of the original legislation in 2003. It is in the context of that debate, and the undertakings Ministers gave at the time, that we raise some objections today. The then Minister for Enterprise, Trade and Employment, Deputy Mary Harney, on Second Stage in the Seanad stated:

"I am convinced the introduction of the PIAB, as well as the other reform initiatives being undertaken by the Government, will lead to a properly functioning market that will attract new entrants into the market and provide the much needed competition to drive premia down further".

There have been no new entrants into the market. While premiums could always be lower, the PIAB has done great work in helping to reduce costs but where is the evidence that people going to the courts are doing otherwise?

The Minister of State, Deputy Michael Ahern, the then Minister for State in the Department of Enterprise, Trade and Employment, at the end of that debate, stated:

The PIAB is not designed to deny people's access to the courts nor their entitlement to seek independent legal advice. The priority for the PIAB will be to implement fair procedures in accordance with the principles of natural justice as they apply in this "documents only" procedure.

He went on to state: "At the end of the Personal Injuries Assessment Board process, the parties are entitled to reject the award if they consider they would secure a more favourable outcome through the courts system". Why has there been a U-turn on that?

We were told also during the course of that legislation that the legal advice from the Attorney General to the Government would ensure there would not be any necessity to have a client take a case to the courts in respect of getting their costs restored if they used the services of a solicitor or a barrister for the purpose of presenting their case to the PIAB. The whole idea behind the setting up of the PIAB was to ensure the legal people and all of the other people would not be necessary. In other words, the process would be so simple, people would not need the help of a solicitor to draw up an application to the PIAB. That did not happen because in the O'Brien case Mr. Justice MacMenamin ruled that access to justice for the citizen was important and that what the Government had tried to do, despite the legal advice and assurances we got, was to take away the rights of the citizen to go to the courts, in denial of what the Minister of State, Deputy Ahern, had said in the course of the conclusion of that debate.

Another Minister made a contribution at that time. The former Minister of State at the Department of Justice, Equality and Law Reform, Deputy Frank Fahey, in the Dáil debate, stated:

It has also been alleged that respondents will consent to a case going to assessment with the full intention from the outset of rejecting the award and fighting liability in court. This makes no financial or tactical sense. Why would a respondent waste fees on the PIAB and then incur litigation costs? Delaying a case never operates to the advantage of the respondent but always enhances the value of the claim with the passage of time, which hampers rehabilitation.

That is what we are arguing today. There is no incentive for anyone trying to play the system to go to the PIAB with the intention of taking a frivolous claim to the courts. Only when there is a legitimate concern at the decision reached by the board would a decision to proceed to the courts follow.

It should not be forgotten that in its rush to tackle the little guy the Government is ignoring the massive profit increases for insurance companies since the introduction of the PIAB. We were told the savings the PIAB would accrue would be passed on to consumers. That was the rationale behind this Bill being introduced and the co-operation of the Opposition on that in terms of the benefit to the consumer. In 2005, the profits of insurance companies amounted to €418 million, an increase of 26% on the previous year, while the savings that have accrued from the PIAB amounted to 1.8%. The various savings from the PIAB are going into the hands of insurance companies rather than to the consumer.

Britain has seen the bonanza profits made as a result of the changes to the claims regime in Ireland and is begging the Government there to follow suit.

While I am on the subject of the big guy versus the little guy, I need not remind the Minister of a case that has been brought to my attention. It involves a 78 year old widow from Limerick who was offered €14,000 from the PIAB in an action she took against Bus Éireann in 2004. Bus Éireann fought the case and she went to court where she spent a day and a half in the witness box. The court awarded her €40,000. If we enact this legislation that lady will get €14,000 in a similar case. She will not have the prospect of going to court to get €40,000.

Deputy Micheál Martin

That is not true.

Deputy Lucinda Creighton

It is true.

An Ceann Comhairle

Deputy Hogan, without interruption.

Deputy Phil Hogan

The Minister gave us all these assurances when the Bill was going through the House in 2003 but they did not turn out to be true, in spite of the advice we gave the then Minister, Deputy Harney, at the time but she knew best.

For our part, we supported the establishment of the PIAB but laid down some important markers at the time. We made the point that Article 34 of the Constitution prescribes that justice must be administered in courts established by law, by judges appointed under the Constitution, and in general must be administered in public. There are specific provisions in law which allow the exercise of limited functions and powers of a judicial nature other than by judges. It is clear, however, that the exercise of such powers must be in accord with the principles of natural justice and in accordance with fair procedures.

In the original legislation, injured claimants are obliged by law to present their claims to this board, which will operate in secret and which will, effectively, deny them the right of independent advice, assistance or representation. Despite those concerns, we favoured the Bill.

We are not alone in our view. I point to the remarks of the late Mr. Justice Seán O'Leary, who did the State some service. He set down his thoughts on the administration of justice prior to his death, which were published following his death. He stated the culture that has grown around the operation of the PIAB is one where all claimants for personal injury are viewed as fraudsters. He went on to state: "The culture so created has been added to by the aggressive advertising of the insurance lobby". He further stated:

Much more needs to be done to restore an appropriate balance. If this is not done by the Oireachtas, then, in my view, the courts must insist on appropriate protection when suitable cases are presented for adjudication.

Those are the views of an eminent judge who had the respect of Members on all sides of the House and who made posthumous remarks about the operation of the principles of natural justice.

Today's debate gives us an opportunity to review where we are in terms of natural justice and fair procedure. I ask the Minister to reconsider whether it is appropriate that the State should seek to discourage people exercising their legal rights. I ask him also to review the operations of the Personal Injuries Assessment Board after three years in operation, which was promised by the then Tánaiste, Deputy Mary Harney, to determine if it is efficiently dealing with claims. Why are the benefits accruing from the savings being made by the PIAB, amounting to €45 million, not going into the hands of consumers rather than into the hands of grossly profitable insurance companies?

Deputy Lucinda Creighton

Like Deputy Hogan, I regret having to oppose this Bill because I support the principle behind the establishment of the PIAB. This amendment Bill is simply anti-citizen and anti-consumer, contrary to what the Minister stated.

The Bill constitutes an assault on the most fundamental principle of our democracy and our Constitution, that is, the principle of freedom of citizens to their entitlement to be treated fairly before the law. The Constitution protects that right, inherently and in a variety of Articles, and this Bill acts as an assault on that.

It is simply alarming that this legislation, which is aimed at attacking that freedom of equality before the law and equality of representation, is being pushed through by this Government in a style that is redolent of the Politburo in Soviet Russia. Allow me to highlight some of the tactics that have been applied. There has been no public consultation on this Bill, there has been no public debate on it, there was no reference in the Fianna Fáil manifesto to this legislation, there is no reference to it in the programme for Government and the Minister is now proposing to rush it through the House as though it were emergency legislation, which it clearly is not.

Deputy Ruairí Quinn

It will have instant effect.

Deputy Lucinda Creighton

Exactly. If this Bill is passed, it will more than likely be enacted within two weeks.

The Bill aims at narrowing the options available to members of the public who are seeking justice and proper recompense before the courts when they have been wronged. These people are not wrongdoers. They are innocent victims who have been subjected to some form of personal injury but it seems that the Government now wants to punish them.

They are consumers. The Minister repeatedly referred to the rights of consumers but he is totally ignoring their rights in this Bill. It is his duty to protect them, but he is attacking them by railroading this legislation through the House.

The effect of the legislation will be to blackmail people away from their legitimate right to recourse to the courts. That right should be sacrosanct and, indeed, is sacrosanct in the Constitution, and the Minister will tip the balance in favour of wealthy insurance companies and away from the rights of consumers and claimants in legitimate personal injury cases.

This crucial legislation is being rushed through the Dáil as though it were emergency legislation, which it is not. I want the Minister to tell the House what is the urgency to amend the Bill enacted only in 2003. What is this urgency to amend such new legislation? Why not review the operation of the Personal Injuries Assessment Board? Why railroad through this ill-conceived amendment Bill?

The constitutionality of the proposals in this Bill really is the crux of the issue. I have major concerns about aspects of its constitutionality. It has been brought to my attention that the legal opinion of probably the most eminent senior counsel in the country in the past few days was furnished to both the Minister and the Attorney General and I want to know what the Minister is doing with that legal opinion. Will he take it on board or will he merely cast it aside and ignore it?

There are two specific provisions in this Bill which constitute the essence of what is unconstitutional. First, section 51B(2) is blatantly unconstitutional in that it imposes a blanket ban in all circumstances on the recovery of costs in subsequent litigation conducted by a solicitor in respect of work done during the course of the PIAB process. That, in effect, is what the Minister proposes.

A raft of case law has consistently held that the right to recover costs is an inherent aspect of the right to access to the courts under Article 34.1 and Article 40.3.1° of Bunreacht na hÉireann. Cases such as Heaney v. Ireland and Murphy v. Greene have set out in great detail learned judgments — if the Minister is unfamiliar with our constitutional law, I would be happy to explain it in further detail to him — not to mention the O’Brien v. PIAB decision in 2005 which challenged and defeated the Government’s attempt to quell people’s opportunity and right to legal representation through the PIAB process.

In addition, section 51B(1) is unconstitutional because it is retroactive. If the Minister's legislation is passed, people who are currently going through the PIAB process will not be able to claim their legal costs for that process which is totally unjust and unfair.

The Minister can chooses to ignore the clear legal facts here at his peril. It would be remiss and arrogant of him to ignore the constitutional issues here. As the Minister will be well aware, of course such action is not unprecedented. Last year virtually the same Government chose to ignore the constitutional lacuna in the statutory rape legislation, and we saw what happened there. I would ask the Minister not to make the same mistake again.

Fine Gael is asking the Minister to make a clear choice. He should withdraw this legislation and come back to the Dáil in the next session when we can debate this properly and, hopefully, have an opportunity to vindicate the rights of citizens.

Deputy Charles Flanagan

I want to place on the record an interest as far as this Bill is concerned in so far as I am still a member of the Incorporated Law Society. I feel I should say that at the outset of the limited time afforded to me.

An Ceann Comhairle

The Deputy has seven minutes.

Deputy Charles Flanagan

It is disgraceful that this Bill is being rushed through in a way that reduces an opportunity for Members of this House to make a statement on the issue. I have been five years out of this House and this place has changed. Deputies' rights have been diluted to the extent that since we came back here two weeks ago almost every item of legislation has been guillotined.

A Cheann Comhairle, as Chair of these proceedings, the manner in which the rights of Deputies elected from constituencies up and down this country are safeguarded does no credit to you. I would hope that you would look at it during the summer, that the Government would look at the manner in which it treats this Chamber as a rubber stamp and that we might get off to a better start come the autumn. We are not in the dying days of a Dáil. We are at the start of a new five-year term. This Bill is not urgent and it is wrong to push it through without giving adequate time for parliamentary debate and for public scrutiny and submissions.

This is an attempt to push through a Bill that will limit the constitutional rights of citizens to take a personal injury case and it is nothing short of Government-sponsored blackmail. Before empowering the insurance industry and the PIAB and before we should limit the rights of the citizen even further, there is a need on the part of Government to weed out unscrupulous practices within the insurance industry.

Earlier this year a Sunday newspaper alleged that a major insurance company was recruiting serving and retired gardaí to investigate and settle claims to the detriment of the victim. I will be returning to this in the autumn when we have time. It is not unknown for accident victims to be visited at their hospital bedside by ex-gardaí acting as private investigators for large insurance companies and persuaded to settle their claims at gross undervalue. To date there has been no serious effort, either on the part of the Garda or of the Government, to halt this practice. Before he left this House the former Tánaiste and Minister for Justice, Equality and Law Reform, Michael McDowell, stated that he viewed the matter as one of the utmost gravity. I have not seen much action on the matter over the past few months.

The citizens of this State are being left vulnerable to unscrupulous practices. The idea of elderly accident victims being awoken in their hospital beds to be confronted by an ex-garda waving a claim form and an acceptance receipt is grotesque. This Bill will copperfasten further the powers of the Personal Injuries Assessment Board to the detriment of the citizens of this country. I heard a great deal of talk about consumers. We are dealing here with the rights of citizens of the State to bring their cases fairly to an arbitrary proceeding, which is a court of this land.

Newspaper investigations into alleged collusion between gardaí and the insurance industry reveal that privileged Garda information on road traffic accidents was used by insurance companies to settle cases more quickly and cheaply, and thereby contributed to a large rise in profits for the market share, a point made earlier by Deputy Hogan. According to the latest figures, motor insurance profits have risen to the tune of 25%. There has been a decrease in premiums but this was cyclical and would have occurred in any event. It should not be attributed to the Personal Injuries Assessment Board. Allianz Insurance reported a 16% increase in profits in its motor business but these savings have not been passed on to the citizen and the consumer.

The Personal Injuries Assessment Board has been given further powers by the Government in such a way as to stack the odds in favour of the insurance industry, of which the PIAB is nothing more than a puppet. The Government has strengthened its powers to limit an accident victim's capacity to seek compensation through the courts. The Bill marks an erosion of people's rights and an attempt to muzzle the vulnerable and the voiceless. This is not about fraudulent or frivolous claims but massive profits for the insurance industry on the backs of the victims of accidents. Using the guillotine on the Bill makes a mockery of the parliamentary process, which is regrettable.

Deputy Lucinda Creighton

Hear, hear.

Deputy Michael D’Arcy

I was surprised to see this Bill being brought before the House with such haste. The Minister describes the PIAB as making an independent and impartial monetary assessment of damages based on medical evidence in a non-adversarial way. It does not have a monopoly. In a number of cases it made offers that were declined and the courts made significantly higher awards.

The idea was to have the PIAB legal free but this is a misconception. Insurance companies are stacked with legal opinion and the PIAB has significant legal knowledge. The claimant is legal free, which is unfair. The evidence does not stack up, given that 90% of those who make a claim through the PIAB have some legal knowledge or backup.

The direction of the PIAB is a concern. Deputy Flanagan referred to it becoming a puppet of the insurance industry. It accepts that a wrong has been done and that the only matter to be agreed is the amount of damages to be paid. It does not have a monopoly. Speaking as an employer, the benefit of the current health and safety position of employers is as a result of claims made in the courts and the PIAB. However, the profits of insurance companies have continued to rise dramatically, despite the existence of the PIAB. Premiums have not been reduced to reflect the decrease in the cost of claims.

The consumer does not benefit from the PIAB and will certainly not benefit from this amendment. The proposal is designed to force claimants to make an assessment of what is offered without legal advice. That is wrong and I am surprised it is proposed. Now, if a case proceeds to court after undergoing a PIAB assessment and the courts do not award higher damages, the claimant must pay for legal opinion out of his or her own pocket. These are strong arm tactics that benefit the PIAB. Joe and Josephine Soap who we accept have suffered a wrong are not getting the benefit of legal advice. They are playing Russian roulette with the court system. To Deputies Flanagan, Creighton and Penrose who are professionals in the legal world, this is wrong.

As an employer, I suggest this measure should not be taken. Evidence suggests it may be unconstitutional. If someone receives an increased amount from the court system, he or she does not have costs of the PIAB application covered. How can the Minister support this? The legislation is designed in order that people make a legal assessment without legal advice. Insurance companies and the PIAB have legal advice, while Joe and Josephine Soap do not. I refer to the final point in the Minister's speech, that the Bill will in no way limit claimant's range of choices or access to the courts. That is incorrect. The Bill will exclude people by using the fear that they will be left with a significant legal bill if they take a case to court. That should not be the aim of the legislation.

I have only been a Member for a number of weeks. It seems the mighty are being facilitated to grow mightier. There is nobody as mighty as the insurance companies. The Bill will lead to increased profits and the ordinary citizen will not receive a just amount for the wrong done. That is unjust.

Deputy Ruairí Quinn

I wish to share time with Deputies Penrose and Kathleen Lynch.

I look forward to Committee Stage when we can engage in dialogue that was not characteristic of the publication and urgent debating of this Bill. I support the concept of the PIAB and argued for it when I was Minister with responsibility for enterprise and employment. I was persuaded of the necessity to reduce the costs of employment and insurance, both legal and premium costs, as they affected small business. I remain convinced of the prevailing argument and believe the PIAB has contributed significantly in the case of 35,000 people out of 40,000 who could access a quick and easy settlement with minimum cost. Some sections of the legal sector have had their personal injuries business significantly reduced and are hurting as a consequence. However, the weak insurance market has not been reformed to the extent that there is now more competition. As a result of changes in the marketplace, we have not seen the arrival of new elements that would drive down costs through competition. There is an urgent need to review the operation of the system in place.

For a short period I was a member of the Joint Committee on Enterprise and Small Business, chaired by Senator Cassidy. Representatives from the PIAB appeared before the committee and I am saddened that we have not had dialogue with them before passing all Stages today.

I refer to the legal opinion received from Mr. Gerard Hogan, Ireland's most esteemed constitutional lawyer on these matters. We tabled two amendments designed, in effect, to ensure this legislation would be constitutional and that there would be some residual discretion left to the courts in regard to these matters. For a technical reason which I understand but think is nonsense, they were ruled out of order by the Chair on the grounds that they constituted a charge on the Exchequer. If our amendment was passed, in some cases the court would be able to agree to award costs and that, consequently, would be a cost, ultimately, on the Exchequer. I take it that it is possible for the Minister to introduce such amendments, should he consider they are worthy. He might want to consider this as an option on Committee or Report Stage.

What I do not wish to happen is for this legislation to be found unconstitutional. It should be amended. Deputy Charles Flanagan raised concerns in regard to the revelations about an insurance company using retired members of the Garda Síochána to informally access accident records within the Garda Síochána, which is an absolute abuse of privilege, an abuse of former servants of the State as well as data belonging to the State concerning citizens. The matter should be vigorously investigated because it is one of concern. While the article in question was written sensationally and the claim has been denied by the principal insurance company named in it, I am not satisfied we, as Members of the Dáil, have been satisfied that an undertaking and inspection have been carried through that refutes the claim in the article in the first instance, if such a refutation can be made, and more to the point, if it cannot be refuted, that effective action is being taken to stop this practice.

We must examine the impact of the PIAB on how the insurance industry is working and how it is affecting our costs in terms of overall national competitiveness vis-à-vis other countries. As the Minister has rightly stated on numerous occasions, we have to compete in a most competitive world and take responsibility for those costs and charges over which we have direct control. This is a clear example of one of those costs. Sometimes the intentions and interventions, well intended though they are by politicians, the Civil Service or the Minister of the day, have outcomes that were unanticipated or do not necessarily achieve the objective intended in the first place.

I wish to read the conclusions of the opinion offered to the Minister and other Deputies in the House by Mr. Gerard Hogan. I invite the Minister to give the advice he received in return, as no doubt he has received a response. I will make this advice available. The conclusion of the eminent senior counsel was:

Summing up, therefore, I am of the opinion that:

A. Judged by reference to the decision of Finlay P. in Henehan, section 51B(2) of the 2007 Bill is unconstitutional insofar as it imposes a blanket and artificial prohibition in all circumstances of the recovery of costs in subsequent litigation done by a solicitor in respect of work during the course of the PIAB process.

B. Judged by reference to the decision of the Supreme Court in the Health (Amendment) Bill, section 51B(1) is unconstitutional insofar as it interferes retrospectively with the vested (albeit contingent) right of a claimant to recover the PIAB element of such costs in subsequent litigation.

This is a serious charge from someone who commands respect across the House. It would be rash and unwise of the House to rush through legislation which will, because there is no commencement date for it, upon signature by the President in three or four weeks time, take immediate effect and have an immediate effect on cases pending. My colleague, Deputy Penrose, might address this matter in a more professional way as he is a practising lawyer. There are legal difficulties associated with this issue. Irrespective of the merits of the case, as Members of this House, as a constituent part of the Oireachtas, in line with the President, we have to be vigilant in ensuring we do not pass laws, however well intended, that will turn out to be unconstitutional and which will, undoubtedly, be challenged on foot of this opinion and by the legal profession.

I thank the Minister for the copy of the opening statement he made available. However, I am not satisfied he has made a compelling case as to why we need to do this now and so quickly. It is not clear what are the additional costs. We have not received a briefing from the PIAB in regard to the Bill, although I received brief correspondence from its chairperson in response to a press release I issued. I am not satisfied this is the way we should be making this law. We have the experience of this House which the Minister will remember in his previous ministerial responsibility when his successor tried to rush through legislation to make the payment of nursing home charges retrospectively legal and it was deemed to be unconstitutional. We should learn from our collective experience. This is not about point-scoring. This is not a case of Fianna Fáil v. the rest. This is not the cut and thrust of party politics; this is the workshop of democracy where we try to get laws on the Statute Book that will enable our society to function well. We are not doing that job effectively.

I urge the Minister to respond fully to the points that have been made and give a reason as to why all Stages of the Bill have to be enacted today and rushed through the Seanad in the next week or so. What is the reason for this urgency if, as the Minister stated, 35,000 out 40,000 legal cases that previously went before the courts are happy to go to the PIAB? It was never the intention that the access route to the courts would be shut off for all 40,000. It was always the intention for those persons who felt they had a reasonable argument to go to court, should they want to have the complexities of their individual case argued in court, that that constitutional and legal door should be left open to them. However, it was intended for others for whom there was no dispute in regard to the damage done and no dispute as to liability or responsibility who simply wanted to make their application, receive compensation and get on with the rest of their lives and did not want to wait in a legal queue for two or three years and that as a consequence, the legal element of the costs of insurance would be reduced for them in a simple and straightforward way.

All of us welcomed that principle, in so far as we could see it functioning and it has functioned well for the 35,000. Why are we closing off this door in this way to such an extent and in such an absolute manner when we have an opinion from an eminent lawyer to the effect that it is unconstitutional? This is a reckless way to proceed. I urge the Minister to reconsider.

Deputy Willie Penrose

I offer my congratulations to the Leas-Cheann Comhairle on his elevation to that office.

An Leas-Cheann Comhairle

Go raibh maith agat.

Deputy Willie Penrose

I am a practising barrister; immediately therefore the PIAB and those associated with the insurance industry will say, "You would say that". Notwithstanding the fact, some of those involved in the PIAB are closely associated with the insurance industry or had backgrounds in it. That is their profession. It is often the case when one is a legal person that there is a tendency to shoot the messenger because one may make points with which people are not happy.

Let us be clear; I am here, not as a legal person but to represent my constituents, people who have rights that are being trammelled upon and curtailed. They are not being shown respect, despite the fact that under the Constitution, they are entitled to have those rights vindicated. A plethora of cases have indicated people have rights of access to the courts and that they are entitled to receive the best legal advice available to them. If they win their case, because they have been the victim of an injury perpetrated by somebody who has done wrong, their costs should also be recovered.

Like Deputy D'Arcy, I also have a business and pay insurance. The premium has reduced to some extent but it is nowhere near the level of reduction that, according to the Minister, should be passed on to me as a consumer since the introduction of the PIAB. The biggest beneficiary to date of its introduction has undoubtedly been the insurance companies and the insurance industry. The cost of insurance has come down but the magnitude of the decrease, some of which would have happened, is dwarfed by the significant increase in the profits of insurance companies. In 2005 the profits of the motor insurance industry increased by 26% to €480 million.

This figure comes from a report by the Financial Regulator. Overall, insurance companies made a net underwriting profit of €802 million in 2005. This figure only pertains to the Irish risk business and represents a 16% increase on the €689 million achieved in 2004. This gives the lie to any displays of the poor mouth from such sources up to now. Profits have continued to increase in 2006 and I would like to see those figures.

It is clear the major winner from the introduction of the Personal Injuries Assessment Board was the insurance industry. Is that a coincidence, simply pure good fortune or would this have happened to some extent in any event? The board has played a role. However, it only handles uncontested cases and Members should understand that many such cases are contested. Although some Members were of the view that one had a choice and was not obliged to go through the board, one must do so. Moreover, it is obligatory to go through PIAB even when one has a case against the Motor Insurers Bureau of Ireland, which was set up by the Oireachtas in a parallel measure. In such cases, it is passed back and subsequently the entire process begins again.

While the Personal Injuries Assessment Board offers assistance to people to try to get them into the system, the important point is that one must get some advice before going through the board. Not everyone can read the plethora of complex forms that come to them. Mr. Justice John MacMenamin's judgment in the O'Brien case is very interesting. He went to great lengths to spell out the reasons and cited various cases from America and elsewhere. Every other jurisdiction recognises that legal representation involves conduct as well as advocacy. However, the Minister's actions today will ensure they are wiped out.

No one who is involved in any way in a legal profession is able to offer any criticism of the Personal Injuries Assessment Board because we are deemed to be vested interests. Others however, including those with senior jobs in other fields involved in the insurance industry, can say what they like or put forward any view without being deemed to be vested interests. There is no point considering matters through rose tinted glasses that are coloured by whatever background from which one comes. It is important that people's rights are not simply trampled upon.

Insurance companies have not passed on the moneys saved to their customers. I wish to acknowledge the work of Pat Leahy of The Sunday Business Post who has conducted a critical analysis of the Personal Injuries Assessment Board, which was not the most popular thing to do. I understand that Dearbhail McDonald, the legal correspondent for the Irish Independent, has also done so. In an interview with The Sunday Business Post on 5 November 2006, the chief executive of the Personal Injuries Assessment Board stated “It’s not my job to criticise the insurance companies” and she refused to comment on the level of premiums charged. While she may believe it is not her job, the PIAB criticises everything else. Incidentally, I was holding a clinic one day when I overheard an avalanche of Personal Injuries Assessment Board people coming on air to criticise and take issue with everything she said.

Members should consider the facts. How many of the claimants, of those who have filled forms with the board, have had their cases proceeded with and have accepted the awards? While the Minister has cited a figure of 35,000, the duty of lawyers is to act in the best interests of their clients. Everyone, including IBEC and the insurance industry, is claiming we are all one big happy family. I have always taken the view that when everyone is pronouncing that we are all winners, someone must be losing. It is clear the losers are ordinary claimants and consumers. While the ultimate aim is a lawyer-free zone and there is nothing wrong with that, not everyone is able to understand the intricacies and complexities that exist. Clearly this is a one-sided equation as the insurance companies can arm themselves with the best lawyers and claims managers. Such individuals are very good at their job and I salute them for that. They can be as tough as nails. However, as Deputy Flanagan asked, what about the little person? Undoubtedly, the system will gain a fresh impetus after the passage of this Bill. Basically, it is so designed to compel accident victims to accept settlements that may be significantly lower than their true value. A fear will be generated that were one to reject an offer of €25,000 and proceed to court, where one was awarded €24,999, one would lose both one's own costs and those of the defendants. Although this constitutes a double whammy, the system is supposed to be fair.

The Minister should recall the Bill. I had always considered him to be a middle of the road or centre-left politician, unlike some of his colleagues and have always believed that he would consider matters from a broad perspective. I am surprised he has presented this Bill to the House in a rushed manner. Is there any control of the insurance industry under any circumstances?

Recently, I read that insurance companies are offering parents money for injuries sustained by their children. In other words, they are settling children's claims directly with parents. I am unsure of the truth of this report. For good reason, the Civil Liability and Courts Act and the Personal Injuries Assessment Board Act have in-built statutory safeguards to protect the rights of children. All such offers of settlement to a solicitor or parent of a child under 18 years of age must remain just that, namely, offers until they are approved by the court of competent jurisdiction. A time-honoured process exists for enabling the court to adjudicate upon the adequacy or otherwise of the offer. Of course to invoke such vital safeguards, the claim must have been initiated, that is, legal proceedings must be issued or a claim made through the Personal Injuries Assessment Board. When the court is not satisfied, the case will proceed to a hearing before a different judge and any amount ultimately approved or awarded by the court will then go into the Courts Service, to be managed until the child in 18. I have read about such developments. It would be a serious matter if an insurance company could settle such claims directly.

Deputy Flanagan mentioned a scenario about which I have concerns, namely, when someone is injured. Someone could come to one's hospital bed or home to make an offer within two or three weeks of an accident. If it looks good, perhaps €15,000 or €20,000, one might decide to accept it. At present, the incentive is to do so. However, two years later one may be attending physiotherapists, be out of work with a bad back or be obliged to see an orthopaedic surgeon. Where does it end? This is a oneway road. This is a genuine point as I no longer carry out as much work of this nature as heretofore, because I do not have time.

This road is oneway. I am disappointed with the trade union movement. It represents workers in the industry and I have not heard a squeak out of them. Workers are involved. Why should it be that local authorities, big business and so on can have the best brains in the business representing them, while the Minister proposes that people should take the chance by going to court? If one is awarded a cent less than one's offer, one is banjaxed. This is what the Minister proposes and he is providing no discretion.

I will not go into the opinion offered by Gerard Hogan. As I told Deputy Quinn this morning, I was not aware of it. However, I refer to the retrospectivity of this measure. It cannot stand up and the Minister should withdraw sections 51B(1) and 51B(2). The Minister proposes to implement a measure that is unconstitutional.

I cherish a couple of things, namely, the Constitution and the independence of the Judiciary. I am very proud of them and in that context, I urge the Minister to re-examine this Bill.

Deputy Kathleen Lynch

The Leas-Cheann Comhairle, Deputy Hogan and I sat on the Opposition benches when the principal Act was taken through Committee Stage. Civil servants write speeches for Ministers, but the least Ministers can do is ensure accuracy. Insurance companies did not reduce their costs as a result of the PIAB's establishment. Those costs had already fallen as a result of the intensive scrutiny of the industry by the Joint Committee on Enterprise and Small Business. An issue on its agenda at the time was the establishment of the PIAB.

I have no vested interest in this matter other than being a Deputy who represents people, the majority of whom would not be able to represent themselves in court or before the PIAB and who would be nervous about filling out the type of form required. Throughout Committee Stage, we received assurances that one would always have the safety net of being able to go to court.

Deputy Ruairí Quinn

Exactly.

Deputy Kathleen Lynch

No matter how wealthy or poor we are, all we can rely on is the protection of the law. If we forget this, our democracy is in serious trouble. The amending Bill to the legislation will try to remove that protection. It will be challenged because it is constitutionally unsound.

The PIAB's chairperson was impressive when it was established, but had I been the claims manager of Iarnród Éireann, I would also feel strongly about people taking that body to court. Now, what I see are beggars on horseback. The Minister knows as well as I the old saying in Cork about putting a beggar on horseback and being ridden to the devil. This is what the amendment will do. We got a pound of flesh, but it is not enough because we want two pounds.

Someone may fall and be seriously injured. It could happen through negligence. I am a great believer in there being certain things as accidents and fault on both sides, but some people are injured through negligence on the part of the person with the duty of care. In my example, the person would need to go to the PIAB, but the Minister assured us that one could bypass the PIAB and go directly to court. The PIAB would decide that because of the person's circumstances and lifestyle — it is not a grand lifestyle and he or she does not have a lot of money or assets — €30,000 would be enough. There is an attitude that a Gucci suit will get someone before the courts more than something from Dunnes Stores.

As an offer of €30,000 would not be enough, the person would decide to go to court, but the first advice given to the person by those who know the law is that, if he or she goes to court, he or she may get a lesser award — it is the adviser's duty to inform the person of this — and become liable for costs. What would a person with no means or assets do? Would he or she continue in the hope of being brazen, then settle for half? He or she would accept the €30,000 knowing in his or her heart of hearts that it would be wrong to do so. It is like telling people to take their medicine or else they will be sent to hospital to have needles stuck in them. Fear is being instilled in people who have no means or assets.

The PIAB should not be chaired by someone with the chairperson's background. The instinctive reaction that everyone is a fraudster is not correct. Claims in respect of compensation for personal injuries had reduced regardless, but the screw is being tightened further. The Minister knows it is unconstitutional and it is staggering that his officials are allowing him to proceed with it. Who is pushing the amendment and on whose suggestion is it being made?

I am not a solicitor, lawyer or so on. My vested interest is in ensuring that people without means are protected, but this legislation does not protect them. The Minister should examine the aggressive advertising by insurance companies making millions of euro in profit, not tighten the screws on people and put them in positions whereby they will not access the courts for fear they will lose the little they have. The Minister should examine the amendment seriously and ask himself the questions each of us should ask ourselves, namely, who is pushing the amendment, what is the amendment's purpose and why is it wanted.

Deputy Ruairí Quinn

Yes.

Deputy Kathleen Lynch

If the Minister answers those questions honestly, his attitude should be different.

Deputy Michael McGrath

I would like to share my time with Deputy Kennedy.

An Leas-Cheann Comhairle

Agreed. As it is a 20-minute slot, the Deputies will have ten minutes each.

Deputy Michael McGrath

I congratulate the Leas-Cheann Comhairle on his appointment and wish him well.

An Leas-Cheann Comhairle

Go raibh maith agat.

Deputy Michael McGrath

I also congratulate my constituency colleague, Deputy Martin, on his reappointment as the Minister for Enterprise, Trade and Employment and wish him continued success in his portfolio. I congratulate too Deputy Michael Ahern on his appointment as a Minister of State at the same Department. I wish to take this opportunity to thank the people of Cork South-Central for giving me the honour and privilege of representing them in this House.

I welcome the opportunity to speak on the Personal Injuries Assessment Board (Amendment) Bill 2007. I do not have a background in the legal profession or the insurance industry, which is not intended as a slight to any Deputy with either background in the House. Since the establishment of the Personal Injuries Assessment Board in 2004, it has been a central element of the Government's insurance reform programme. Its success in such a short period has been remarkable, but we have not given it enough credit for its work during this debate. The number of personal injury cases going through the courts has dropped from more than 35,000 in 2004 to fewer than 5,000 in 2005. This dramatic reduction has allowed more court resources to be used to deal with cases that must, by necessity, go through the judicial process.

The majority of people who suffer a personal injury through the negligence of others want reasonable compensation in an efficient, timely and uncomplicated manner. The judicial process is not the appropriate mechanism for dealing with the majority of such cases. This debate should not be focused on the interests of the legal profession or the insurance industry.

According to the Central Statistics Office, motor insurance premia fell by 34% between April 2003 and December 2006. Other policy initiatives contributed to this improvement, but the establishment of the PIAB has played an important role in reducing insurance premia, including tangible financial benefits for individuals and businesses. The introduction of the Civil Liability and Courts Act 2004, which includes penalties for giving false or misleading evidence in personal injury cases, has provided a significant deterrent to bogus claims.

Deputy Kathleen Lynch

Then why is this Bill being introduced?

Deputy Michael McGrath

The work of the PIAB has directly challenged the mindset of the compensation culture. The independent assessment of personal injury cases carried out by the board is provided without the need for the majority of current litigation costs, such as solicitors', barristers' and experts' fees, associated with such claims. These significant costs contributed to the high cost of insurance in Ireland for both consumers and the business community.

The compensation awarded by the PIAB is not affected by the legal costs and experts' fees that add more than 46% on average to the cost of a claim. The board has also reduced the amount of time it takes to finalise a compensation claim. While it can take approximately three years to settle a claim under the court system, it generally takes nine months to settle a personal injury claim via the PIAB.

The PIAB has recently announced that it has delivered total personal injury awards in excess of €100 million to date. Having reached full flow activity this year, it expects to deliver compensation payments in excess of €100 million annually from 2008. Critically, it has brought consistency to the treatment of personal injury cases. We all know of cases where people were encouraged to take an action because of the outcome of a court case brought by another person in similar circumstances. The consistent and even-handed evaluation of claims by the PIAB has ended the incentive for claimants to bring suspect claims in the hope of securing a perhaps undeserved bonanza in court.

The work of the PIAB has not only benefited the victim of the personal injury but also the person or organisation alleged to be responsible. According to the chief executive of the board, there is good news also for respondents — those paying for accidents — as the costs of processing claims through the PIAB continued to reduce and are currently up to 70% cheaper than litigation. Based on trends to date and the achievement of full volume activity this year, the PIAB is targeting annual processing cost savings of €40 million relative to litigation from 2008.

I have listened carefully to the debate on this legislation. The fundamental point is that the Bill does not remove a person's right to reject a PIAB recommendation and take a personal injury case to court. Equally, if a claimant's legal representative feels strongly enough that the case should be taken to court, that representative has the option to take the financial risk. The bottom line is that after a decision is issued by the PIAB, the claimant will have to make a judgment call as to whether he or she wishes to take the matter to court. Claimants will in general make that judgment call based on the advice of their legal representative who is perfectly free to offer to take the case on a "no win no fee" basis.

There may be proposals from the other side of the House that the court should be allowed a degree of discretion on the issue of costs in cases where it upholds a PIAB assessment and grants somebody an amount no greater than that of the PIAB in its decision. However, we have seen in other situations, particularly in criminal law matters, where the Judiciary has been given a degree of latitude in regard to mandatory sentences, with the outcome being that the exception becomes the norm and the flexibility granted to the Judiciary is extended so far that the rule becomes meaningless.

The result of adopting this Bill will be to strengthen the role of the PIAB and make people think more carefully and perhaps more sensibly before embarking on a costly and lengthy legal process where the outcome is uncertain. I commend everyone involved in the PIAB for the outstanding work they have done thus far and wish them every success.

Deputy Michael Kennedy

Ba mhaith liom mo chomhghairdeas a ghabháil leis an tAire, Deputy Martin, and the Minister of State, Deputy Michael Ahern. I support this legislation. Some of the Members who have spoken have legal backgrounds. I have practised as a professional insurance broker for more than 30 years, working on behalf of insurance consumers. It is my experience that insurance premia have increased consistently in that period due to insurance companies incurring major losses. Companies frequently imposed across the board increases, for both private and business customers. People may choose to ignore the statistics but they undoubtedly show that motor, public liability and employers' liability claims were consistent loss makes for insurance companies. Those clients who had the misfortune to have claims paid out of their policies suffered a further penalty when their insurance company imposed a claims loading.

Before the advent of the PIAB system, most claimants brought their claims to court. It is my experience that it generally took three to five years for claims to be settled. These delays caused great annoyance to genuine claimants. Furthermore, those policyholders against whose policies the claim was made suffered an increased premium for the duration of the three to five years in which the claim was awaiting a court hearing. The insurance companies made sure no-claims bonuses and so on were not paid to such persons. There is no doubt that insurance brokers had great difficulty in trying to negotiate the loading imposed by insurers on these policyholders.

One of the consistent problems for insurers in the pre-PIAB era was that the courts were inconsistent in granting awards for seemingly similar claims. There was a general view that particular judges were more or less likely to award substantial amounts. This was a factor in the apparently relentless annual increases in insurance premia. Since the introduction of the PIAB system, there has been a major reduction in the number of claims and the amounts of payments. There has also been great consistency in the amounts awarded for similar injuries. In 2005, for example, the number of claims in the court system reduced from some 40,000 to fewer than 5,000. This has allowed the courts to deal with genuine cases in a more expeditious manner. Under the previous system claimants had to wait three to five years to have their cases settled and receive their money. Notwithstanding these developments, I have not seen any poor solicitors or barristers. On the contrary, they seem to be flourishing. One can only wish them good luck as they play an important role.

Before the advent of the PIAB, legal costs at 40% were payable on the settlement achieved by the claimant. A person who received a settlement of €10,000, for instance, had to pay €4,000 to his or her legal representative. The difficulty in this regard is that it was insurance consumers who paid these costs via increasing premia. Insurance companies are not the Society of St. Vincent de Paul but in business to make profits. When they lose money, the losses are passed on to all customers through increased premia, not just those unfortunate persons who have a claim against their policy.

It is my experience that in the last three years insurance premia across the board have reduced by 50%. This is a direct result of the PIAB system by which claims have been substantially reduced in numbers and costs. There is now greater competition within the insurance industry which was open in the past to charges that a cartel was in operation. Both private and commercial business clients have benefited from reduced premia. I suggest to Deputies D'Arcy and Penrose that if their premia have not come down by 50%, they should consult a good insurance broker.

Reverting to a situation where claimants were encouraged to go to court would undoubtedly lead to higher settlements and drive premia up. This would not be in the best interests of insurance consumers, whether private citizens or businesses. While insurers are currently making large profits, it would be a sad day if we reverted to the problems we faced in the 1970s, 1980s and 1990s when insurance premia were considerably higher due to a lack of competition. This Bill will continue the policy of streamlining the settlement of personal injury claims in a non-adversarial manner and replacing the old system with a speedy, low cost and user friendly one. I do not wish to suggest that claimants have no rights to go to solicitors because if their claims are genuine they should be able to take that course. However, the provisions in this Bill are in the best interest of insurance customers. I strongly urge Deputies to support this Bill.

An Leas-Cheann Comhairle

I call Deputy Bannon. Approximately 14 minutes remain before I must ask the Minister to conclude the debate.

Deputy James Bannon

Without mincing words, this Bill is a joke. Like a rogue elephant trampling all before it, the Government will force the legislation's passage through sheer weight of numbers, regardless of the legal and democratic rights of our citizens. I am stunned that the Minister, despite all the advice available to him, has stood over a Bill that is constitutionally unsound.

Deputy Michael Ahern

According to Fine Gael's barristers.

An Leas-Cheann Comhairle

I ask the Minister of State to allow Deputy Bannon to make his contribution. There is a convention in this House that new Deputies are afforded the opportunity to speak without interruption.

Deputy Michael Ahern

The Deputy is an old hand. He does not get upset at interruptions.

Deputy James Bannon

I thank the Leas-Cheann Comhairle.

Surely it is realistic to expect the Government to produce watertight legislation that will not waste our time or leave the door open to constitutional challenge. This is not to take from the work being carried out by the Personal Injuries Assessment Board, which was advocated and supported by Fine Gael, albeit with some reservations. However, our support cannot be extended to this Bill. It is unbelievable that any Government or its representatives would legislate to restrict the rights of its citizens to access the courts without regard for public consultation. Speaking on the original debate on the Personal Injuries Assessment Board in 2003, the then Minister of State at the Department of Enterprise, Trade and Employment stated: "The PIAB is not designed to deny people's access to the courts or to their entitlement to seek independent legal advice." It appears, however, this Bill not only adversely affects the rights of citizens but it may also force the introduction of other legislation to review and revise the operations of the assessment board. That would be the unfortunate result of the railroading of the legislation.

The Personal Injuries Assessment Board (Amendment) Bill 2007 seeks to curb a reported practice whereby a large percentage of claimants are rejecting PIAB assessments and taking their cases to court in the hope of securing larger settlements or awards. According to The Irish Times, this amounts to a figure of 40%. The route is made more attractive by media reports on claimants who were awarded legal costs. The important words here are “curb” and “practice”. The Government is seeking through legislative means to impose a blanket ban on the recovery of costs in any subsequent litigation conducted by a solicitor in respect of work carried out in the course of the PIAB process. This is further compounded by section 51B(1) which interferes retrospectively with the right of a claimant to recover the PIAB element of costs in subsequent litigation. So much for the Government commitment to allow people to access the courts. The right of access to court is an inherent element of Article 6 of the European Convention on Human Rights and covers civil proceedings. Peter Leach has observed in Taking a Case to the European Court of Human Rights that the effective exercise of this right may create other obligations on the State, such as the provision of legal aid in civil proceedings where legal representation is made compulsory for certain types of litigation or simply because of the complexity of the procedure or the particular case.

The PlAB initially sought to minimise lawyer involvement in the new procedure by corresponding directly with claimants rather than their legal advisers. This policy was tested in the High Court in the case of O'Brien v PIAB 2005 and it was held by Mr. Justice McMenamin that the board had no statutory authority to exclude an applicant’s legal adviser from the process.

An article in the Sunday Business Post on 1 July 2007 noted that the process of settling claims has changed hugely since the advent of the PIAB and stated:

"The new system was designed to help insurers reduce costs but an unfortunate by-product has been the way it has encouraged insurers to short-change consumers. Few outside the legal profession decry PIAB's professed aim of creating a lawyer-free zone, but the system has given carte blanche to the insurance industry to get the unsuspecting victims to accept settlements that are considerably lower than their true value."

In supporting the establishment of the PIAB, Fine Gael made the point that Article 34 of the Constitution prescribes that justice must be administered in courts established by law, by judges appointed under the constitution and in general must be administered in public. Where is the care we should be giving to personal injury victims? The Government has become so obsessed with reducing insurance premia that the rights of victims have simply been forgotten. The denial of their constitutional rights is just another way of leaving the average citizen adrift without the necessary recourse to viable options. Rather than rushing through this legislation, the Minister would be better advised to pause to consult the Attorney General because Fine Gael is tired of repeating that rushed and railroaded legislation is bad legislation.

Minister for Enterprise, Trade and Employment (Deputy Micheál Martin)

I thank Deputies for their contributions, in particular newly elected Deputies such as Deputies Creighton, Michael McGrath and Kennedy, whom I congratulate on their election. I wish to make several general points before addressing the specific issues raised by Deputies.

I am somewhat taken aback by the strong anti-PIAB sentiment expressed by the Opposition and in particular by Fine Gael Members, despite their efforts to mask it. I regret the personalisation of some of the attacks in regard, for example, to the chairperson. That should not be part of any debate in this House. Furthermore, does anyone seriously think the Government's agenda is to trample on the fundamental rights of citizens?

Deputy Kathleen Lynch

Yes.

Deputy Micheál Martin

Of course the Government does not have that agenda. Our agenda is completely the opposite because we want to protect the common good, the ordinary citizen and, ultimately, the taxpayer, as well as make our economy and society more competitive, effective and efficient.

That is what we are trying to achieve. I find the Fine Gael position quite extraordinary. It is clear we are in a post-election scenario and I invite the spokesperson on Enterprise, Trade and Employment, Deputy Hogan, to take down the Fine Gael website entitled rip-off republic because the party's stance here is not about protecting people from rip-offs. It is the antithesis of what that party was doing for approximately 12 months before the election, attacking the Government about rip-off this and rip-off that. The Deputy should take down the website because his party's stance here is not in the interests of the consumer.

Deputy Phil Hogan

The election is over.

Deputy Micheál Martin

I genuinely mean that and——

Deputy Phil Hogan

I know the Minister is genuine about everything.

Deputy Micheál Martin

I am struck by the fact that Deputy Hogan was on the Oireachtas committee that recommended the legislation I am implementing. The committee unanimously recommended this legislation to the Government, the same committee of which Deputy Hogan was a member.

Deputy Phil Hogan

I am well aware of which committee I was a member.

Deputy Micheál Martin

The Deputy obviously supported it then but now he has come into the House and done a spectacular U-turn, attacked the PIAB and opposed the legislation. That is, in essence, what has happened here.

Deputy Phil Hogan

The Minister is the one doing a U-turn.

Deputy Micheál Martin

I have pointed out this fact on a number of occasions in this House and in the Seanad.

There has always been strong lobbying against the Personal Injuries Assessment Board by the legal profession — let us be very clear about that, and I understand it. I have no axe to grind with the legal profession but its opposition to the PIAB has been relentless and will continue to be so. The legal profession will seek every opportunity to undermine the PIAB. Let us be under no illusions about that and let us not be naive about it. We are endeavouring here to close off loopholes that will be exploited to the detriment of the consumer, the ordinary citizen and the common good. That is all we——

Deputy Ruairí Quinn

We must do that within the terms of the Constitution.

Deputy Micheál Martin

Of course we must do it within the terms of the Constitution. I accept, by the way, the measured approach taken by Deputy Quinn. I accept that his presentation this morning is consistent with his earlier positions, in terms of enterprise, and I understand his legitimate concerns about the constitutional framework. The Deputy made a measured contribution and I will deal with the issues he raised later.

Fundamentally, our objective is to close off a particular loophole. Mention was made of the membership of the PIAB. I accept what Deputy Penrose argued regarding the bona fides of the case but unfortunately he questioned the composition of the board and referred to members' allegiances and so forth. We all know Senator Joe O'Toole, who is the vice chairman of the Personal Injuries Assessment Board. I have had many discussions with the Senator, whose qualities as a parliamentarian I value. I also value his contribution to the PIAB. The Senator is a nominee of ICTU. He made it very clear in the Seanad that the matter before us today relates to a succinct and net issue, that is, costs that are being unnecessarily incurred when the Personal Injuries Assessment Board makes an award and, in some instances, the amount has been rejected by claimants represented by solicitors. These costs comprise two categories. First, an amount in the region of €1,500 being sought for the completion of a PIAB application form, which had led to the award.

Deputy Kathleen Lynch

That is exactly our concern.

Deputy Micheál Martin

Second, a further amount in legal costs, adding another 46% on top of the compensation itself, where the majority of the cases do not proceed into a court and no additional amount in compensation is achieved on behalf of the injured party. That is the net point here.

What is available to the citizen? In short, the Personal Injuries Assessment Board, as Senator O'Toole pointed out, is open six days a week to assist claimants in completing their application forms at a nominal cost of €50 per case. We simply cannot preside over a system where a charge of approximately €1,500 is being levied on the public by an intermediary for this same service. We cannot preside over that and this legislation is designed to close off that opportunity and close off the loophole.

Deputy Ruairí Quinn

None of us has any argument with the Minister over that.

Deputy Micheál Martin

The Opposition Deputies went over the top in their criticisms of the Bill and its rationale.

Deputy Phil Hogan

The Minister is the one going over the top.

Deputy Micheál Martin

Deputy Charles Flanagan and Deputy Creighton went over the top. The latter Deputy compared me to a Soviet Union politburo member.

Deputy Kathleen Lynch

If only the Minister had such power.

Deputy Micheál Martin

Such hyperbole and exaggeration has not been witnessed in the House for quite some time. With respect to Deputy Hogan, I suggest his party colleague was a little over the top in terms of her description of my good self.

With regard to the other members of the board of the PIAB, one represents the insurance federation, as Deputy Penrose pointed out. Another is the chief executive of the national consumer agency. There are two nominees from the Irish Congress of Trade Unions, one of whom is the aforementioned Senator O'Toole. The consumer director of the Irish financial service regulatory authority, which protects the consumer, is also on the board, as are a number of other individuals with relevant expertise. It is unfair to suggest that there is a bias towards the insurance industry on the board. I do not accept that contention, as expressed by Deputy Penrose.

Deputy Phil Hogan

We are concerned about their profits.

Deputy Micheál Martin

I will give Members one example——

Deputy Charles Flanagan

The Minister is misleading the House.

Deputy Micheál Martin

I listened to the Deputy earlier and I ask him to allow me to finish my contribution.

Deputy Charles Flanagan

The Minister is misleading the House.

An Leas-Cheann Comhairle

Allow the Minister to continue, without interruption.

Deputy Charles Flanagan

The Minister is misleading the House on the net import of the Bill. It is not about a €1,500 or €50 charge——

An Leas-Cheann Comhairle

The Minister is responding to the debate and he has limited time.

Deputy Micheál Martin

I wish to give Members details of a case which illustrates my point. We must balance the points raised with the real situations which arise in practice, such as in a particular case that has already been processed. In one leading case, the Personal Injuries Assessment Board made an assessment of €9,200, which was rejected by a claimant. Immediately after rejecting the assessment, proceedings were issued and an offer was made for the same amount as had been assessed, plus €1. That offer was accepted. One would think that was the end of the matter but legal costs were added on, amounting to €6,120. Included in that was a figure of €3,250 for the solicitor. Those were only the costs for the claimant and they did not take account of the other costs to the defendant of defending the case. This is the kind of situation that the original Act was specifically introduced to deal with.

Deputy Kathleen Lynch

That can be dealt with by other means.

Deputy Micheál Martin

That is the kind of situation which made insurance costs prohibitive in this country. We do not want to go back on the progress that has been made to date. That is what this amending Bill now rectifies. It will not affect the claimant who has a genuine reason for getting more from the court than was assessed by the PIAB.

Deputy Quinn raised the issue of the potential impact of not moving on this issue. If allowed unchecked and if current practices continued, the financial impact could potentially be €75 million, given the number of cases on hand in 2007.

Deputy Kathleen Lynch

Does that figure relate to 40,000 or 5,000 cases?

Deputy Micheál Martin

If we do not close off the loophole——

Deputy Kathleen Lynch

Is the Minister referring to 40,000 or 5,000?

An Leas-Cheann Comhairle

The Minister is responding to the debate. It is possible to ask the Minister to yield, otherwise I ask that the Minister be allowed to proceed without interruption.

Deputy Micheál Martin

Deputies raised various points and I am endeavouring to deal with them all. Deputy Quinn raised the issue of impact and the figure of €75 million is based on a scenario where all the awards are rejected and cases proceeded with through the route identified. There is a conservative estimate that an additional cost of 39% of the award, plus up to €1,500 per case could arise. That is based on an average award of approximately €20,000. We estimate an additional cost of €9,300 per case or a total of almost €75 million per annum, which would be passed on to consumers in higher premiums.

With regard to legal matters, my Department takes on board serious legal opinion submitted to it. This Bill was published on 25 April, before the last Dáil was adjourned.

Deputy Ruairí Quinn

The Minister must excuse us if we were not consumed with curiosity at that time.

Deputy Charles Flanagan

That is the most feeble excuse for not rushing legislation.

Deputy Micheál Martin

The Deputy did not wait for the end of my sentence. I ask him to wait. I decided not to rush it through on that occasion.

Deputy Charles Flanagan

There would have been nobody here.

Deputy Kathleen Lynch

The Minister could not do it from Cork.

Deputy Micheál Martin

However, I put it before a very senior legal figure, namely, the former Attorney General, who gave it a clean bill of health from a constitutional perspective.

Deputy Kathleen Lynch

Naturally.

Deputy Micheál Martin

I also presented it to the new Attorney General who, I respectfully suggest to the House, is regarded as a very eminent expert on constitutional and other legal matters. The Bill also came through that Attorney General's scrutiny with regard to its constitutionality. Having received and been fortified by that advice, I now bring the legislation before the House. Perhaps this is something the Personal Injuries Assessment Board will have to address. I was somewhat taken aback because I get the feeling that there is an anti-PIAB sentiment emerging here. Whether or not I am wrong about that I do not know.

Deputy Phil Hogan

The Minister was not listening to our contribution.

Deputy Micheál Martin

The Deputy should hold on. I am prepared to take it on board and accept that there may be a need for greater dialogue with the proposed committee and with Members. That is something we may have to pursue further. People may say that the PIAB has nothing to do with anything and is not responsible for the fact that motor insurance premiums are now down to 1997 levels. That is spectacular progress by any yardstick. During a recent "Drivetime" programme, IBEC said that employers' personal injury liability is no longer as big an issue as it was. Household premiums are down to 2001 levels.

Deputy Kathleen Lynch

They have been reduced, yes.

Deputy Phil Hogan

Will the Minister give way?

Deputy Micheál Martin

I accept there are other factors and I note that Senator Cassidy is in the Gallery. Deputy Lynch made that point.

Deputy Phil Hogan

Will the Minister yield?

Deputy Micheál Martin

Yes.

Deputy Phil Hogan

On a point of information, would the Minister accept that in 2005 the profitability of all general insurance companies was €418 million? Premia in that year were reduced by 1.8%, even though there was a 26% increase in profitability for such companies.

Deputy Micheál Martin

Before taking that point, I want to acknowledge the presence of Senator Cassidy in the Gallery. Deputy Lynch already referred to the work of his committee in driving the insurance agenda and keeping on top of it. Deputy Hogan was a member of that committee, which recommended part of the course of action we are now taking. Profitability has increased in the insurance industry.

An Leas-Cheann Comhairle

The Chair is entirely impartial, but I understand it was a great and very hard-working committee.

Deputy Micheál Martin

You were a very hard-working and valued member of that committee as well, a Leas-Cheann Comhairle.

The insurance industry is making a lot of profits but, with respect, that is a separate issue to the one before the House. Nonetheless, it is an issue that must be addressed by having more competition in the marketplace. We are anxious to attract more competition. It is not valid, however, to set that issue up as a counterpoint to the issue before the House, in terms of closing off a significant issue.

Deputy Phil Hogan

A moment ago the Minister was speaking about profitability and premia.

An Leas-Cheann Comhairle

The Minister without interruption, as his time is very limited.

Deputy Micheál Martin

Hopefully, the profitability of the sector in the modern economy will, in itself, act as an incentive for greater competition with more players coming into the field.

Deputy Phil Hogan

A bit like groceries.

Question put.

The Dáil divided: Tá, 64; Níl, 52.

Tá

• Ahern, Michael.
• Andrews, Barry.
• Andrews, Chris.
• Ardagh, Seán.
• Aylward, Bobby.
• Behan, Joe.
• Blaney, Niall.
• Brady, Áine.
• Brady, Johnny.
• Brennan, Séamus.
• Byrne, Thomas.
• Calleary, Dara.
• Carey, Pat.
• Collins, Niall.
• Conlon, Margaret.
• Connick, Seán.
• Coughlan, Mary.
• Cowen, Brian.
• Cuffe, Ciarán.
• Cullen, Martin.
• Curran, John.
• Dempsey, Noel.
• Devins, Jimmy.
• Dooley, Timmy.
• Fahey, Frank.
• Fitzpatrick, Michael.
• Gallagher, Pat The Cope.
• Gogarty, Paul.
• Gormley, John.
• Grealish, Noel.
• Haughey, Seán.
• Hoctor, Máire.
• Kelly, Peter.
• Kenneally, Brendan.
• Kennedy, Michael.
• Killeen, Tony.
• Kirk, Seamus.
• Kitt, Tom.
• Lenihan, Conor.
• Martin, Micheál.
• McEllistrim, Thomas.
• McGrath, Finian.
• McGrath, Mattie.
• McGrath, Michael.
• McGuinness, John.
• Moloney, John.
• Ó Fearghaíl, Seán.
• O’Brien, Darragh.
• O’Dea, Willie.
• O’Flynn, Noel.
• O’Hanlon, Rory.
• O’Keeffe, Batt.
• O’Rourke, Mary.
• O’Sullivan, Christy.
• Power, Peter.
• Power, Seán.
• Ryan, Eamon.
• Sargent, Trevor.
• Scanlon, Eamon.
• Smith, Brendan.
• Treacy, Noel.
• Wallace, Mary.
• White, Mary Alexandra.
• Woods, Michael.

Níl

• Bannon, James.
• Barrett, Seán.
• Bruton, Richard.
• Burke, Ulick.
• Burton, Joan.
• Byrne, Catherine.
• Carey, Joe.
• Crawford, Seymour.
• Creighton, Lucinda.
• D’Arcy, Michael.
• Deasy, John.
• Deenihan, Jimmy.
• Doyle, Andrew.
• Durkan, Bernard J.
• English, Damien.
• Enright, Olwyn.
• Feighan, Frank.
• Flanagan, Charles.
• Flanagan, Terence.
• Hayes, Brian.
• Higgins, Michael D.
• Hogan, Phil.
• Howlin, Brendan.
• Kehoe, Paul.
• Lynch, Ciarán.
• Lynch, Kathleen.
• McEntee, Shane.
• McHugh, Joe.
• Mitchell, Olivia.
• Naughten, Denis.
• Ó Caoláin, Caoimhghín.
• O’Donnell, Kieran.
• O’Dowd, Fergus.
• O’Keeffe, Jim.
• O’Mahony, John.
• O’Shea, Brian.
• O’Sullivan, Jan.
• Penrose, Willie.
• Quinn, Ruairí.
• Rabbitte, Pat.
• Reilly, James.
• Ring, Michael.
• Sheahan, Tom.
• Sheehan, P.J.
• Shortall, Róisín.
• Stagg, Emmet.
• Stanton, David.
• Timmins, Billy.
• Tuffy, Joanna.
• Upton, Mary.
• Varadkar, Leo.
• Wall, Jack.

Tellers: Tá, Deputies Tom Kitt and John Curran; Níl, Deputies Paul Kehoe and Emmet Stagg.

Question declared carried.