Central Bank (National Claims Information Database) Bill 2018: Instruction to Committee

I move:

That, pursuant to Standing Order 200, Standing Order 154 is modified to provide that it be an instruction to the Select Committee on Finance, Public Expenditure and Reform, and Taoiseach that it has power to make provision in the Central Bank (National Claims Information Database) Bill 2018 in relation to:

section 8 of the Civil Liability and Courts Act 2004 to enhance the effectiveness of the statutory requirement for a plaintiff to serve a notice in writing on the defendant stating the nature of the wrong alleged to have been committed by him or her; and section 14 of the Civil Liability and Courts Act 2004 to allow for the court to draw inferences from non-compliance with the requirement to lodge a verifying affidavit within 21 days after the lodgement of the service of the pleading concerned, and deduct costs from the party responsible for the failure;

and to make other consequential amendments required to take account of the changes above.

The purpose of my remarks is to explain the background to and the need for amendments to the Civil Liability and Courts Act 2004, and the reason they are being tabled by the Minister for Finance to the Central Bank (National Claims Information Database) Bill 2018.

Members of the House will recall that the Minister of State, Deputy D’Arcy, signalled that amendments were being considered to sections 8 and 14 of the Civil Liability and Courts Act 2004 on 20 September as part of his Second Stage contribution on the Central Bank (National Claims Information Database) Bill 2018. Both of these amendments arise from key recommendations 6 and 14 contained in the cost of insurance working group’s report on the cost of employer and public liability insurance.

I will now give some further information on the amendments. The first amendment relates to section 8 of the Civil Liability and Courts Act 2004. The key aim of this amendment is to reduce the notification period for the serving of a letter of claim from two months to one month. Its rationale is to align the time period with data protection legislation, which provides that data shall not be kept for longer than is necessary for the purposes for which it is obtained - generally, no more than one month. However, an exception to this rule is where information or CCTV footage is held in the context of an investigation such as a personal injuries claim. Consequently, by requiring a plaintiff to notify a defendant within one month of an alleged incident under section 8, the defendant is being given the opportunity to identify within the data protection time limits any relevant CCTV footage he or she may have of the incident, and keep it beyond the one month period for investigation purposes where they believe the claim is questionable. This earlier notification period will also help a defendant prepare his or her defence in a range of other ways such as being able to put together more accurate employee witness statements where this is relevant.

In addition, the working group believes that the existing wording of section 8 needs to be strengthened to ensure it is used more effectively by the courts. In this regard, it is proposed that instead of a court having the option to draw inferences from the failure to serve a letter of claim on the alleged wrongdoer within the prescribed period of time through the use of the word "may”, it should be required to do so as a matter of course through the use of the word "shall".

Amendment of section 14 of the Civil Liability and Courts Act 2004 proposes the insertion of a new subsection (4A) into section 14 of the Act. Section 14 deals with the matter of a verifying affidavit in a personal injuries action. At the time this Bill was being legislated for it was described as a key element of the 2004 Act and was designed to combat false and exaggerated personal injury claims.

The working group concluded that non-compliance with section 14 as a whole is not frequently raised in court as an issue, and no instance of a prosecution or conviction pursuant to section 14 was found. The working group also took the view that the requirement to lodge an affidavit within 21 days of the service of the pleadings was not unreasonable. However, it would appear that this regularly does not happen.

Consequently, it proposed a new subsection which would provide for a court hearing a personal injuries action, where there is a failure to lodge an affidavit in court by the deadline set out in the existing subsection (4) to draw inferences and, where it thought it appropriate in the circumstances of the case, to deduct costs from the party responsible for the failure.

The working group hopes that by providing for potential financial consequences to be applied for non-compliance with the procedural requirements, where a court thinks it appropriate, it will force parties to the action to strictly adhere to the requirements set out. The aim of the working group regarding this amendment is to reinforce the original intention of the provision as a measure to combat fraud and exaggeration in personal injury claims.

In summary, both of the amendments are seen as important for small and medium businesses in particular. When implemented, they should make it easier for businesses and insurers to challenge cases where fraud or exaggeration is suspected. The Minister for Finance, Deputy Donohoe, and the Minister of State, Deputy D'Arcy, believe these proposed amendments form important steps in the reform of the overall personal injuries framework.

We support the motion to instruct the committee to enable the Minister to bring forward these amendments on Committee Stage on Thursday, at which time we can have the substantive debate on them. The Civil Liability and Courts Act 2004 is in need of reform. It is clear that the Minister agrees and his amendments speak to that. There are issues with the mismatch between the period for notification by a plaintiff to a defendant of an incident and the data protection rules governing the retention of CCTV data, which must be addressed.

The working group also identified issues with allowing the court the discretion to consider the failure to report an incident within the timeframe. Merely reducing the two months to one will not resolve this issue but it is movement in the right direction. We will deal with the substantive issue on Thursday. We will also deal with the substance of the second amendment, which relates to the verifying affidavit in a personal injuries action, compliance with that and the potential for financial penalties. We support the motion, which allows the Minister to bring these amendments forward on Committee Stage.

Likewise, I do not oppose the motion, but these amendments could potentially push the line further in regard to what is good law and what is constitutional. We will examine that in more detail on Committee Stage but I would not be surprised if a section of the amendment was challenged in the courts. I could speak more about that but our time is restricted.

Given the impact of what is proposed, it should have undergone pre-legislative scrutiny. The report has been available since the start of the year and it should have been scrutinised to give an opportunity to hear from other sides. I am aware that there is an insurance crisis which involves many factors but the Government seems to be fixated on the issue of fraud, which is an important issue but is not the only one.

At the committee meeting last week, insurers ran rings around the Minister of State, Deputy D'Arcy. It is time to pause and look at the actions. Why is the insurance industry time and again allowed to block or delay unfavourable measures while pushing ahead with favourable ones? This is a procedural motion to allow the Bill to proceed to Committee Stage, and I have no issue with that. While there are issues with the inference that could be drawn from the wording, which we should change from "may" to "shall", I would like to hear what impact a reduction of the prescribed period from two months to one would have on genuine claims. The House is united in its view that fraudulent claims need to be stamped out, but there also needs to be prosecution in respect of fraudulent claims. Suspect claims are coming from notable people but nothing happens. Other claims are thrown out of court when the judge deems them fraudulent, yet no convictions result.

The question I always ask is: where is the Garda fraud unit? We were told that there will be a meeting between the Minister of State, Deputy D'Arcy, and the Garda Commissioner. I made the point time and again, to the Minister of State's predecessor, Deputy Eoghan Murphy, and others, that the idea that a private enterprise would fund a section of the Garda is not right. It is a precedent we should not establish. I know it operates in London, but it should not happen here. We should not allow any private interest to fund a section of our police service. As I said to the Minister of State, he needs to make it clear on behalf of the Government that it and this House stand foursquare behind the Commissioner in terms of resources and personnel to establish a publicly funded Garda fraud unit. We should no longer tolerate people walking out of court after chancing their arms in the context of bringing fraudulent cases and knowing they will never be prosecuted, which is what happens. I would also like to hear an update on the Competition and Consumer Protection Commission's investigation into cartelism.

These issues will be examined in detail on Thursday. I am not opposed to them but they are only a part of the picture. While it is more of a justice issue than a finance issue, it should have been subject to pre-legislative scrutiny, or at least there should have been an option for the committee to tease out the wording of this in written format with other sectors. We are united in the idea of stamping out fraudulent claims. There is an issue with how long the video files can be kept, which I understand, but I would like to see what, if any, unintended consequences there are for genuine claimants.

We will support the motion on the understanding that we will receive a full and detailed briefing before the debate on Thursday. These amendments seem to be innocuous at first glance but, on closer inspection, the period in which one may make a claim will be reduced from two months to one. In the case of genuine claimants, there may be reasons for providing for the longer period. We need to hear both sides of the argument on this matter.

I am somewhat concerned about the retention of CCTV footage and the requirement to notify a defendant. There is an issue with the retention of the data and general data protection regulation, GDPR, is quoted in this context. I would be extremely disappointed if GDPR became the go-to reason in the public service and other situations for limiting information and access thereto.

Before the matter is discussed in greater detail, I would like us to get a note or a briefing in advance. I know the civil servants are busy and, therefore, a note will suffice in order that we can examine what is proposed and seek legal advice on it. These changes are significant and the Dáil has not had an opportunity to discuss them. They need to be examined in the light of honest claimants - for example, a person who is injured in a genuine accident and who must then make an insurance claim or someone whose car is badly damaged in an accident and who makes a genuine claim - and how their access to the court and their experience in court may be affected. We must also deal with the issue of fraudulent claims. As has been stated, it is astonishing that while we frequently read about fraudulent claims in the newspapers, there is never any follow-up or prosecution. If people are bold enough or criminally minded enough to make what judges describe as fraudulent claims, why is no subsequent action taken against them? It is important to state that most people are honest and the claims they make are honest. Insurers' profits are significant or, for most of the insurance cycle, extremely significant because premiums are high. We need more information about this and I would like it to be supplied to Deputies before we discuss these matters in greater detail.

I will try to address some of the issues. No one has objected to the Motion itself and the Deputies will have opportunities to tease out issues further at Committee Stage. I share Deputy Doherty's reservation that the insurance industry would directly fund An Garda Síochána, as would many Members of the House. I have discussed this with the Minister and I understand that he is like-minded to a certain extent. The Deputies will have to tease it out with him at Committee Stage.

Deputy Burton spoke of the timeframe of a month for people to lodge their papers. I understand that the court would still have discretion in extreme circumstances if, God forbid, somebody was in a coma or incapacitated and could not direct a solicitor, where a judge could consider the circumstances. Data protection rules require business owners and others to dispose of personal information, in this case, CCTV footage specifically. It is appropriate that we should try to get those two periods to coincide which is the primary aim of this. It is also highly appropriate that the affidavit which followed the proceedings would be submitted within three weeks. Perhaps only anecdotally from my own dealing with the law and from dealing with constituents, but often that time period can be lengthened for any number of reasons. Those are contributory factors and, as Deputy Doherty said, fraud is not the only reason we have high premiums. Delays in the legal system and in the processing of claims are a significant contributing factor. That is why I welcome Members' agreement that we would have this discussion on Committee Stage on the amendments that the Minister has flagged.

Question put and agreed to.