I move: "That the Bill be now read a Second Time."
I am pleased to bring the Personal Injuries Assessment Board (Amendment) (No. 2) Bill 2018 before the House. It is an important Bill as the Personal Injuries Assessment Board, or PIAB as it is commonly known, facilitates the objective assessment of damages at a much lower delivery cost and in a far shorter timeframe than does litigation. The cost of insurance working group's report on the cost of motor insurance was published on 10 January 2017 by the then Minister for Finance, Deputy Michael Noonan, and the then Minister of State with responsibility for financial services, Deputy Eoghan Murphy. The report suggested that the delivery costs for cases settled outside PIAB continued to be over 40% of compensation costs. Many commentators have suggested that the cost of personal injury claims is a contributing factor to the high cost of insurance premiums in Ireland. As Minister for Business, Enterprise and Innovation, I am very aware of the serious impact on businesses of high insurance costs and other costs of doing business. Encouraging more claimants to finalise their cases through the PIAB model rather than by resorting to litigation should lead to cost savings in the claims environment. This would be good for businesses, consumers and society as a whole by delivering compensation more quickly with lower costs and predictable outcomes.
The primary objective of the Bill is to amend the existing legislation, namely the Personal Injuries Assessment Board Acts 2003 and 2007, to strengthen PIAB by addressing operational issues to ensure greater compliance with the PIAB process and encourage more claims to be settled through the PIAB model. PIAB operates an administrative, paper-based process and assesses damages on the same basis as the courts in accordance with the laws of tort. Effectively, this means that PIAB assesses amounts for general damages for pain and suffering and special damages, which is the amount provided for financial losses, including wage losses, medical treatment costs and out-of-pocket expenses. PIAB does not determine liability. With the exception of claims for medical negligence, an intending applicant must make a personal injury claim through PIAB unless the case is settled directly with the other party. In assessing cases, PIAB usually requires the claimant to attend an independent medical practitioner for an up-to-date medical examination and final prognosis.
Within a legislatively defined time period of nine months, PIAB's assessors assess an award and issue it to both parties. If the award is accepted by both parties, an order to pay is issued against the respondent who then pays the compensation to the claimant. If either party rejects the award, PIAB issues an authorisation to the claimant. A PIAB authorisation is required before a claimant can initiate proceedings in court. Under the legislation, either party can reject a PIAB award. Award acceptance is not compulsory as making it so would impinge on the constitutional right of access to justice delivered by the courts. PIAB makes awards in approximately 12,000 cases annually with around 60% of claimants accepting them.
The acceptance rate has remained broadly consistent in recent years. These cases are dealt with speedily and at a low cost. The current delivery cost is approximately 6.5% of the value of the compensation and this mainly comprises the fees paid by the claimant and respondent and the costs of the medical reports required to assess the case.
In making its awards, the Personal Injuries Assessment Board, PIAB, uses the book of quantum so that awards reflect what is likely to be achieved through litigation but at a much lower cost of delivery. The overall average award made by the PIAB in 2017 was €24,879, with the average motor liability award being €23,234; the average employers’ liability award being €32,015; and the average public liability award being €27,638. Award values vary depending on the nature and severity of cases received. Today, the PIAB’s non-adversarial model delivers settlements to claimants without the need for litigation.
In 2014, a public consultation was held to examine the operation of the legislation and to identify any areas relating to the scope, powers or operation of the 2003 Act that required change. Some 29 submissions were received. The cost of insurance working group report made a number of recommendations in relation to strengthening the PIAB model, namely, to address non-co-operation with the PIAB and the frequency of the publication of the book of quantum.
The report on the rising costs of motor insurance from the Oireachtas Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach of November 2016 also recommended enhancing the powers of the PIAB.
The outcome of the public consultation process and the two reports referred to have informed the content of the Personal Injuries Assessment Board (Amendment) (No. 2) Bill 2018. Encouraging more claimants to avail of the PIAB model rather than resorting to litigation should lead to cost savings in the claims environment and this should ultimately lead to reductions in insurance premiums, thereby benefiting consumers and businesses.
I will now summarise the main provisions of the Bill. Section 2 amends section 13 of the 2003 Act in relation to the documentation required by the PIAB before the formal notification shall be served on a respondent to ascertain his or her wishes in relation to an assessment by the board of the claim. A formal notice will only issue to a respondent when an application together with a report prepared by a medical practitioner in respect of the personal injuries and the fee have been received from the claimant by the board. This amendment will not affect the operation of section 50. The Statute of Limitations will continue to be paused on making of an application to the board, where it is accompanied by a medical report and fee. If the application is not accompanied by a medical report and-or the fee, the board may issue a preliminary notification to the respondent that a claim has been received identifying them as the person the claimant holds responsible for his or her injuries. However, the respondent will not be obliged to consider consenting to an assessment being made in the absence of a medical report and-or the fee being submitted to the board.
Section 4 amends section 17 of the 2003 Act regarding the discretion of the board not to arrange for the making of an assessment in certain situations as set out in section 17. These include situations where there is insufficient case law on the type of injury and the assessors cannot quantify the value of the claim, or in the opinion of the board, there is such complexity in issues regarding assessment of the claim, including, for example, issues involving multiple injuries or a pre-existing injury, that it would not be appropriate for the claim to be assessed, or where the injuries consist in whole or in part of psychological damage and it would not be appropriate for the assessors to assess the claim given the limited means afforded to them by the Act as to how they are to assess a claim. The assessors, unlike a court, cannot hear oral evidence from the claimant or observe the claimant undergoing cross-examination which may be appropriate in determining the value of a psychological injury in certain circumstances.
It is proposed to extend the categories listed in section 17 of the 2003 Act. This, for example, will include situations where the board is unable to serve statutory documents, or where the respondent has notified the board of his or her intention not to accept any assessment when made, or where a settlement has been negotiated in respect of a minor or persons of unsound mind to be approved by the court.
Moving to section 5, this section amends section 22 of the 2003 Act to provide for different levels of charges levied by the board on claimants and respondents for submitting electronic and paper formats of documents to them. As it is cheaper to submit and process documents electronically, this should be incentivised. There is also provision for the PIAB to levy staged charges on the respondent for the various stages of the claims assessment process.
Section 7 amends section 50 of the 2003 Act to ensure consistency in the disapplication of limitation periods under the Statute of Limitations within the PIAB process and to rectify any discrepancies arising from interpretations of the Renehan v. T & S Taverns judgment - 2015 IESC 8.
Section 8 amends section 51 of the 2003 Act by the insertion of a new section 51C to deal with cases of non-compliance with a request by the board under sections 23 or 24. The 2003 Act provides that where a claimant fails to supply details of his or her claim for special damages or where the claimant fails to attend a medical examination arranged by the PIAB, or where the claimant has failed to assist or co-operate with retained experts, the board is obliged to carry out the assessment. The assessment will not reflect the appropriate value of the claim and may therefore be rejected by the claimant. On rejection, the board releases the case and issues an authorisation to the claimant that allows the claimant to bring legal proceedings.
To deter non-compliance with the PIAB process, section 8, by the insertion of section 51C into the 2003 Act, introduces a deterrent in any subsequent legal proceedings in terms of legal costs whereby the court may, in its discretion, taking into account any failure to comply, make an order on what costs, if any, it will allow the claimant. The court can also order the claimant to pay all or a portion of the costs of the respondent. The amendment also provides a deterrent regarding legal costs for non-compliance by a respondent to a request by an assessor for information or documents or to assist or co-operate with retained experts. The court may, in its discretion, taking into account any failure to comply, make an order on what costs, if any, it will allow a respondent. This should contribute to maximising the use of the PIAB model, encouraging higher levels of consent to assess claims and increasing acceptance rates of awards.
The Bill, including this section, has been drafted in consultation with the Office of the Attorney General. While the general scheme of the Bill published in 2017 provided that, where the claimant has failed to comply with a request by an assessor under sections 23 or 24, the court would also have discretion as to what evidence would be admissible in court, in terms of claims for special damages or medical evidence, that was available but not submitted by the claimant to the board prior to the making of the assessment. The general scheme provided that where a respondent failed to comply with a request under section 23 for additional information, the court would have discretion to determine what evidence would be admissible in the proceedings.
On the advice of the Attorney General, the Bill has been drafted taking into account that the function of the court and the constitutional duty of any judge is to hear all the available evidence and arrive at a decision on foot of that evidence, and to determine issues of liability and quantum. A plaintiff also has a right to tender evidence before the courts. The court must retain discretion in any given case to ensure constitutional rights are vindicated and fair procedures are followed. This section of the Bill, by providing for potential financial consequences to be applied for non-compliance with requests by PIAB assessors should encourage parties to adhere to the requirements set out in the Act.
Section 9 amends section 54 of the 2003 Act to provide that the board shall review and update the book of quantum every three years, or sooner if the board decides it is necessary. The 2003 Act did not make it clear that the book of quantum should be updated at regular intervals. The book of quantum was first published in 2004 and updated in October 2016.
Section 10 amends section 54A of the 2003 Act to give the board power to obtain information from individuals or bodies to provide data for the purpose of the board fulfilling its functions in terms of preparing and publishing the book of quantum, and collecting and analysing data in relation to amounts awarded or agreed in settlements, and not just in relation to the board’s function regarding the making of a cost-benefit analysis.
Sections 11 and 12 amend sections 56 and 57 of the 2003 Act regarding the composition of the board to fully reflect Government policy that, insofar as appropriate, appointments to the board of non-commercial bodies are appointed following a Public Appointments Service process. The Bill also provides that board members cannot serve more than ten years on the board. This is in line with the 2016 code of practice for the governance of State bodies.
Provision is also made in the Bill that where a board member is nominated to the Seanad, or becomes an elected representative of the Oireachtas, the European Parliament or a member of a local authority, he or she may no longer serve as a board member.
Section 13 inserts a new section 74A to provide for a reserves policy for the PIAB.
Legal advice obtained by my Department is that legislative change is required for the board to remit surplus moneys to the Exchequer. The Personal Injuries Assessment Board shall now remit to the Minister, for the benefit of the Exchequer, any moneys in excess of those authorised to be retained by the Minister, with the consent of the Minister for Public Expenditure and Reform. The Bill specifically provides that the Minister will have regard to the operational, capital and contingency costs of the PIAB when determining the sum to be retained. At present, there is no legislative provision which provides that excess moneys can be remitted to the Exchequer. This amendment rectifies the position and implements a recommendation to the Department from the Comptroller and Auditor General that appropriate legislation be introduced to deal with excess funds held by the PIAB.
Section 14 amends section 79 of the 2003 Act regarding the service of documents by the board. It is proposed to legislatively underpin the use of electronic portals to enable the board to serve documents electronically where consent has been provided. The use of portals will also reduce administrative costs for all parties engaging with the board and introduce further efficiencies into the process. The Bill provides that the PIAB will have the facility to serve documents by using a document exchange mail service and this amendment will provide for this.
That brings me to the end of the provisions of the Bill. While some sections are technical, important changes are being made. I know there is significant interest in the Bill and that Deputy Michael McGrath initiated a Private Member's Bill in July covering the issues of non-co-operation with the PIAB, such as non-attendance at medical examinations and refusal to provide details of special damages, and, second, for the book of quantum to be reviewed every three years. I have outlined the measures proposed in the Bill on these two issues. I look forward to working with all Deputies and having their support for the Bill to enable its speedy enactment through the Houses of the Oireachtas. The Bill is one element of the Government’s response to facilitate cost savings in the personal injuries claims environment. More claims being settled through the PIAB rather than resorting to litigation should lead to cost savings in the claims environment. This should ultimately lead to reductions in insurance premiums, thereby benefitting consumers, businesses and society as a whole. I commend the Bill to the House.