Before Committee Stage commences I must inform the House that amendment No. 1 is out of order.
Statute of Limitations (Amendment) Bill, 1990: Committee and Final Stages.
Section 1 agreed to.
SECTION 2.
Question proposed: "That section 2 stand part of the Bill."
Subsection (1) states that references to "that person's date of knowledge are references to the date on which he first had knowledge of the following facts..." Five facts are outlined in the subsection. Will a person be required to have knowledge of all the facts or will knowledge of four of the five facts be sufficient?
This section lists the items, knowledge of which a person must have in order for time to start to run against him. Time will not begin to run against a person until he or she has obtained, or is fixed with, knowledge of all the relevant facts listed at subsection (1). The person whose knowledge is relevant may be, depending on the circumstances of the case, either the injured person, taking the personal injuries action himself; the personal representative of a deceased injured person, taking the personal injuries action for the benefit of the estate of the deceased; a dependent relative of a deceased person who has died by the wrongful act of another, taking an action under section 48 of the Civil Liability Act, 1961, or having such an action taken on his behalf by another dependent relative.
The Senator asked what the items of knowledge may be. The first item of which knowledge must be had is that the person alleged to have been injured has been injured. Awareness of the injury does not always coincide with the act or omission which causes it. For instance, exposure to asbestos dust or radiation may cause injury which does not manifest itself for many years. The second is that the injury in question was significant. This is another aspect that might be relevant. This is a question of fact to be determined by the court in each case. An injury of the same objective slightness may differ greatly in significance depending on the circumstances of different cases. For instance, a light, glancing blow which would result in no more than minor temporary bruising in most people might have very serious consequences for other people, say, for instance, a haemophiliac. I hope that answers the queries raised by Senator Mullooly.
I should like to query the Minister on the point about the injury in question being significant. As I understand it, the 1988 Private Members' Bill gave a definition of "significant". I would be of the opinion that, in the absence of a definition of "significant", problems might arise. There is a need for a clear and unambiguous definition of the word. We need to set out objective standards for assessing whether the injury is significant having regard to the various diagnoses and medical evidence available.
I concur with Senator Fallon. That was the point I was going to raise. Concern has been expressed by the insurance organisations regarding the open definition that can be put on "significant". I would also agree with his view that a concise definition should be included. It would improve the Bill.
I am conscious of the "significant" being raised by the Leader of the House, Senator Fallon and by Senator Neville. Perhaps I might give a background to this definition of "significant injury". I recall that Deputy George Birmingham's Private Members' Bill followed the English limitations legislation by reproducing the provision which defined "significant injury" as one which the plaintiff would reasonably have considered sufficiently serious to justify his instituting legal proceedings for damages against a defendant who did not dispute liability and was able to satisfy a judgment.
The publication entitled The Supreme Court Practice, which is the authoritative guide to practice and procedure in English law, comments at paragraph 6152 of the 1988 edition that “significant injury” is defined in a somewhat curious way and it asks:
On this basis, that liability is not in dispute and the money is there for the asking, what injury would not be sufficiently serious to make a claim for compensation worth while?
To give further amplification of "significant injury" the Law Reform Commission, at page 17 of their report, noted this criticism and pointed out that the likely effect of such a provision would be that time would start to run against a person who because of an injury however trivial: thus, a person who received an apparently minor injury and let matters drift because of the minor nature could, if the injury turned out to have serious consequences after a period of years, find himself held to a date of knowledge considerably earlier than that on which he realised that the injury was significant in the normal sense of the word.
The best way to illustrate this is to give an example. A person slips on a wet restaurant floor and as a result gets a minor cut from broken glass. Since that is his only injury and it heals rapidly without complications, the injured person decides not to sue: the injury is simply too trivial. Some time after the expiry of the normal three year limitation period running from the date of accrual of the cause of the action, the injured person is debilitated by internal injuries from a shard of glass which, unknown to him, had lodged in the cut and had over time travelled within his body.
If the law contained a definition of "significant injury" on lines of the English provision I have outlined, then the injury in this example would be "significant" and the injured person would be fixed with a date of knowledge contemporaneous with the accrual of the cause of action. This would seriously diminish the effectiveness of the Bill.
On the other hand, the approach taken by the Law Reform Commission and followed in this Bill means that a person injured in an apparently trivial way will only have time to start a case against him from the point at which he realises that the injury was significant. I hope that clarifies the point raised on the significant injury aspect of the Bill.
Question put and agreed to.
SECTION 3.
Question proposed: "That section 3 stand part of the Bill."
While this section compares closely with the Bill introduced by former Deputy George Birmingham and is quite acceptable to this side, I was disappointed that my amendment was ruled out of order. The effect of this section will increase the cost of insurance to industry, motorists and employers resulting in increased costs all round. I urge the Government to consider the situation. Our motor insurance is four times higher than that of our nearest neighbour, employers' liability insurance is three times higher than that of our nearest neighbour and public liability is three times higher than that of our neighbour. This section will exacerbate the situation our insurers find themselves in vis-a-vis insurers anywhere else, apart from the US. While we accept the contents of section 3 we would see it being introduced in the context of an overall review of insurance, bearing in mind that this will have an adverse effect on the insurance industry.
Wearing my insurance hat, I would refer to the concerns expressed by Senator Neville. There is scope for increased additional claims and, therefore, extra payments from insurance companies by way of claims and hence increased premiums for consumers. There are two aspects to this. Estimating claims will become more difficult as a result of this Bill. The problems of the old PMPA insurance company were caused because they regularly estimated claims on the very low side and found that they were paying much more than the estimate provided for. In this case because we are not notifying claims in time there will be a big problem for insurers. We have become litigious minded in recent years. There will be scope for many frivilous and vexatious actions in the area of latent personal injuries and this Bill might exacerbate this. We thought the Courts Bill would reduce premiums or at least level them off but, unfortunately, that has not happened. We find that awards are as high as ever hence insurance companies are losing greatly in the areas of liability insurance, motor insurance, and so on. There is no point thinking one thing and saying another. This Bill will add to the number of claims. Obviously, if there are more claims there are more awards so the cost of insurance could possibly increase as a result of this Bill.
The whole area of professional negligence and medical insurance may be affected by this Bill. Doctors and other professional people say that the cost of professional negligence insurance is rising rapidly. Having some knowledge of the insurance industry it is no harm to issue the warning that this could lead to increased premiums.
We are all concerned with the current level of premiums. As I indicated in my Second Stage reply at columns 1224-25, Volume 126, of the Official Report on 31 October:
Of course, we all acknowledge that the high cost of insurance is very serious for everybody but, while a passing reference is accepted, this is primarily a matter for the Minister for Industry and Commerce. However, I can assure Senators that he and his Department are actively engaged in monitoring insurance costs and in examining ways of reducing those costs. The Bill, lest we take it out of context, seeks to remedy an injustice and a possible unconstitutional provision in our law. If that results in an increase in the cost of insurance, that is the price society must pay for a fairer system. I should point out, however, that when changes similar to those in the Bill were brought about in another country's law, there was no significant leap in insurance costs and I do not see why there should be any major increase in insurance costs here either.
I assure the House that there is ongoing concern at the high cost of insurance. That is why the Minister for Industry and Commerce and his Department continue to actively monitor the unacceptable level of premiums. I want to state that even though it is outside the scope of this Bill, I understand the Members' concern about it.
The Minister is correct when he says that it is a matter for the Minister for Industry and Commerce to deal with the cost of the insurance but this does not hide the fact that there could well be an increase in premiums. At the June meeting this year of the Irish Public Bodies who are insurers who transact business for local authorities, health boards and vocational education bodies and who are wide open to the public and therefore more prone to being damaged as a result of this Bill than perhaps the normal or ordinary insurance company that would not be engaged in that type of activity, I asked the manager of the company had he read the Bill. He had read it and was of the opinion that as far as his company was concerned, the Statute of Limitations (Amendment) Bill would bring in more claims. If there are more claims, more money is paid out and if more money is paid out it has to be recouped. The traditional way of recouping it is from the consumer. The manager felt that there would be more claims and therefore his company would have to pay out more money which would result in increased premiums. I stress that this type of business is prone to vexatious and fictitious claims. I am aware that on my own council, you would get a solicitor's letter on the last day of the three years inviting a claim about which no-one knew anything.
I agree with what the Minister says that, of course, the Minister for Industry and Commerce has responsibility for premia and for insurance generally but I still have to make the point that this could have an impact on premia. I am not saying that it would be a major or dramatic increase but it would have some impact on them.
The Irish Insurance Federation are in no doubt as to the effects of the Bill. Obviously the Bill will admit more claims. That is the purpose of the Bill and, as the Minister rightly says, in doing so it will correct an injustice, and we go along with that. I quote the views of the Irish Insurance Federation:
The cost to insurers of settling the increased claims will be directly reflected in increased motor and liability insurance premiums. The increased cost of premiums will be borne by consumers as policyholders in some cases and will, in any event, ultimately be passed on to the consumer as price increases on goods and services provided by the policyholders.
There is at present an attempt by the industry and the Government to reduce insurance costs which are already high in comparison with other countries and represents a threat to the competitiveness of Irish firms. Any measure which tends to increase the cost as this does will increase the cost to industry and will reduce its competitiveness. I ask the Minister to bring this matter to the attention of his colleague, the Minister for Industry and Commerce, and to express the view of both sides of the House that the difficulty with insurance settlements and the difficulty with the cost of insurance in Ireland must be tackled immediately.
I support the Minister in his introduction of this measure. I do so for the reason that I heard him on the monitor a few minutes ago outlining the simple case of natural and constitutional justice. That is the important thing and I note that everybody around the House has said that. There may come into play a balance between justice on the one hand and the cost on the other. If that does come into operation there is no doubt in my mind and the Minister should be assured of this, that we must come down on the side of justice.
With regard to the cost of insurance premiums and so on, we are always hearing this wailing from the insurance industry. I am not at all convinced that they are the best people to tell us what is going to reduce the cost of premiums. We heard a little while ago that abolishing juries was going to reduce the cost of premiums because the cost of settlements would go down. I have to tell the insurance industry this morning that it has not. They know it has not. They are not perhaps in quite so qualified a position as one might assume to advise this House with regard to fluctuations in terms of cost. So I would say, first, in a situation where it comes to a conflict between justice and expense, we would need to be very seriously persuaded that the expense was inordinate before we limited our concern for justice and certainly before we took advice from a professional group who have proved themselves so clearly wrong in the so recent past. I think we would be well advised to follow the clear speech of the Minister and give full support to the Bill.
I have been saying what Senator Norris has said. The Bill is one we all welcome. It is clearly designed to remedy an injustice in the law which can, in some cases, result in a person losing his right of action for personal injuries before he is in a position to know that he has a cause for action. There is no question but that is something we welcome but the down-side of it is that there could well be — I am not saying there will for certain — an increase in premiums. Senator Norris made the point as did I that we were told by the insurance industry that the Courts Bill was very nearly the answer to all their problems, that it would reduce awards and by so doing reduce premiums. That has not happened. I accept that fully. My own view at the time was that it might not increase premiums but would certainly level them off. That has not happened. At the moment, the cost of insurance, particularly for young drivers, is astronomical. You cannot get it. That is the situation that prevailed 10 years ago and we are back to that again. I have contacts with the insurance industry but I would have to agree that they wanted the Courts Bill. They thought it was the answer to all their problems, that awards would be reduced and so premiums would be reduced as a result. It can be said loud and clear that that has not happened. From that point of view, the Minister is correct.
We should ask the Minister to request the Minister for Industry and Commerce to ensure that the insurance companies will not use this legislation as a justification for increasing premiums.
As regards the point raised by Senator Neville, the views raised by the Insurance Federation in their submission was examined by my colleague in Industry and Commerce and brought to Government. It was taken into account when this Bill was being debated at Government level. It was their submission that we took account of when this Bill was being prepared.
I accept that. There are two separate issues. I accept that my amendment was ruled out of order on that and just in case there was any doubt about our position, the Fine Gael Party have for a long time had as their policy the introduction of such a Bill. I made this quite clear on Second Stage when it was discussed on 31 October but a lot of things were on people's minds——
It was an unreal world we lived in that day.
Some of us decided that the Bill should go ahead that day. The position of Fine Gael is quite clear. In fact we introduced, through former Deputy George Birmingham, a Private Members' Bill which is almost exactly the same as the Bill before us. Some drafting changes were the only appreciable differences I could detect when comparing both Bills. While we are fully supportive of the Bill on the basis of natural justice, we must accept that there is a down side to the Bill which goes into the much broader area of insurance costs. What we are saying is while the increase in insurance might be small enough as a result of the Bill, insurance costs and settlements and the insurance industry generally should be looked into by the Government. I accept what Senator Norris said — that the insurance industry should not decide what is right and what is wrong.
The Government should carry out a full investigation into costs, settlements, procedures, legal costs of settlements and the whole area of litigation. A notable churchman recently pointed out the immorality of submitting some claims and the tendancy by insurance companies to settle such claims out of court because they know that to go to court would result in higher expenses for the insurance companies which would be passed on to policyholders anyway. What we are saying is that the whole insurance area requires urgent investigation by the Minister for Industry and Commerce. I urge the Minister present to bring the views of the Seanad on this to that Minister.
The Bill is designed to alter the present position whereby a personal injuries claim will be statute barred if not taken within three years of the date when the injury occurred. It is only natural to anticipate that costs will rise. What concerns me, and previous speakers have referred to, is control over insurance companies and their charges. Have they formed a cartel where they agree on rates? The Minister for Industry and Commerce should look into the matter. It has now reached the stage where many people are no longer in a position to carry insurance. That is a major problem. As a result of this section costs could again increase substantially.
The Senator's contribution does not come within the section being discussed. I would ask Members to keep to the section we are dealing with, section 3.
I accept that but the Bill is designed to alter the present position where a personal injuries claim will be statute barred if not taken within the three year period. As a result of this costs will increase.
I and other Members acknowledge the extensive passing reference allowed by the Cathaoirleach and now yourself to this item. By passing reference, I mean the insurance element and the premia. As I said earlier, that has been allowed because of the widespread concern with regard to insurance. However, that discussion is really for another day and I am not suggesting for a moment that we should not have such a discussion. I am pleased the Cathaoirleach and the Leas-Chathaoirleach have allowed us the freedom to extend the passing reference. I want to assure Senators Mullooly and Foley that this debate will not be the end of it. I will bring it to the attention of my colleague and convey to him another chapter on this whole question.
Question put and agreed to.
SECTION 4.
Question proposed: "That section 4 stand part of the Bill."
I presume there is no problem with this. Obviously it applied in the past where an action was brought before the expiration of three years from the date of death, or the date of the personal representative's knowledge, whichever is the later. Obviously who should be the personal representative is clearly defined in the Bill. From that point of view it should not present any problems.
Question put and agreed to.
Sections 5 and 6 inclusive agreed to.
SECTION 7.
Amendment No. 1 not moved.
Section 7 agreed to.
Section 8 agreed to.
Title agreed to.
Bill reported without amendment and received for final consideration.
Question proposed: "That the Bill do now pass."
The Bill is necessary and is designed to remedy injustices in the present law. It is no harm to say, and the Minister has acknowledged this, that our concern is that insurance costs might rise. It is no harm that the debate centred on this. It shows the concern Senators have about the cost of insurance. This is a very pressing matter however, the Minister handled the situation well. He has made the point that insurance costs are not his responsibility. We have put down a marker on what could happen, and we have been proper and correct in doing so. Senator Mullooly suggested that we endeavour to ensure that the passing of the Statute of Limitations (Amendment) Bill, 1990, will not lead to increased premiums.
Question put and agreed to.