By agreement with the Whips it has been agreed that each speaker will have 20 minutes and that the debate will go on until 4 p.m. It may conclude today, but if not it will be continued next week. Is that agreed?
Agreed.
Cost of Motor Insurance: Statements.
May I welcome the Minister of State at the Department of the Taoiseach who is with us here today? It is his first visit. We warmly congratulate and welcome him. Perhaps I should say that were he to speak, given the knowledge he has from his responsibility for women's affairs, he would tell the House that lady drivers are better drivers. That is reflected in the fact that insurance companies give them better premiums.
I will not be speaking on the motion. Others Senators who will be speaking on the motion will have an opportunity to welcome the Minister. I join with you, a Chathaoirligh, in congratulating Deputy T. Kitt on his appointment to the post of Minister. I hope he will go further. He is very welcome to this House. I call on Senator Raftery.
Could I question that on the basis that I asked the Leader of the House for this debate and it was my understanding that the Government side would actually begin the statements in the House?
My apologies. I thought the Minister would make a speech; but, if the Senator does not mind, I will go to the other side. It is more correct that the Government side should have the first speaker.
It is, but I came here on the understanding that I was speaking first. I have other engagements and so on.
In those circumstances, would you agree, Senator O'Keeffe?
I also came on the understanding that I was speaking first in the House. I also have another engagement.
If I cut my contribution a bit shorter, would that suit the Senator?
It is irregular, but given that you are standing——
I have indicated to Senator Raftery that he should speak and he has indicated that he will shorten his speech.
Thank you, a Chathaoirligh. I thank Senator O'Keeffe for accommodating me. I welcome the Minister to the House as a fellow county man and congratulate him on his promotion. County Galway is doing well with the Ministeries. There is much more representation in the county now than there is in the whole of Munster.
I have spoken on this subject here at least three times in the last 12 months, I was astonished to hear the Minister for Industry and Commerce when interviewed on the issue one morning recently, refer to the fact that our insurance is so high because of the very high claims — and I can go along with that — but he said that is what the people want and that as long as the people want it that is how it will be. I am not sure that the people were polled on that issue. I certainly do not want it. I am sure the vast majority of car drivers do not want it. The only people we are accommodating by high claims are those who are arranging crashes in order to make a lot of money out of it.
The present cost of insurance for car drivers in Ireland is scandalous. We are not doing anything effective to reduce it. I have spoken about the cost of insurance relative to that in continental Europe. Today I will quote from a recent report which compares our insurance costs with the UK. I will point out again, as I pointed out before, that insurance costs on motor vehicles are now so high that they are acting as a disincentive to investment and reducing our competitiveness in the marketplace. That situation must be addressed and must be addressed quickly. For young drivers particularly it is absolutely ridiculous. A driver under 25 years of age today trying to get insurance for the first time is quite likely to be quoted a figure that is higher than the cost of the secondhand car which he bought. It is making it impossible for young people to get insurance. For many of them it is making it impossible to get a job.
As a result of the extremely high cost of insurance we now have 75,000 uninsured drivers driving around the country. The insurance companies themselves — and they are no angels — commissioned a report by Coopers and Lybrand to compare the cost of motor insurance in Ireland with the cost in Britain. I have to say that they would be putting the best side forward for the insurance companies. Let me say that if they are so concerned that they are doing their job properly, why did they ask for and why did our Government support their call for a derogation in the non-life sector in the European Single Market situation?
This report is quite detailed. I accept they have stated the facts. It shows clearly a number of rather disturbing matters. For instance, personal injury claims are two and a half times more likely to arise in the Republic than in the UK. Non-comprehensive claims are five times and comprehensive claims three times more expensive than in the UK. Personal injury claims are four times more expensive in Ireland. Damage claims are twice as expensive. The fatal accident rate too, unfortunately, is higher. Here it is two and a half times the UK rate and the serious injury rate is 1.25 times higher in Ireland.
Spare part prices are up to 33 per cent higher here than in the UK. Car repair times are longer in Ireland. But there is much more to it than that. The survey showed that the differential was on average 48 per cent higher for comprehensive cover and 133 per cent higher for non-comprehensive cover in the Republic of Ireland than in the UK. The industry statistics in the last three years indicated that the average earned premium per vehicle per year was 70 per cent higher for comprehensive cover and 106 per cent higher for non-comprehensive cover while average cost claims were 74 per cent higher for comprehensive cover and 141 per cent higher for non-comprehensive cover in the Republic of Ireland. Based on the premiums for comprehensive cover the report goes on to show that, based on five cases included in the sample which required comprehensive cover and taking a straight arithmetical average, it can be estimated that comprehensive cover will cost 48 per cent more than if the car owner lived in a similar region in the UK.
In relation to the frequency of claims, we must look at the factors that this report identifies which influence the issue. They list the frequency of claims, the claims cost, accidents, repair costs and the type of cover. Dealing first with the frequency of claims, this report points out that overall claims frequency is significantly lower in the Republic of Ireland than in the UK, with approximately double the claims per vehicle year in the UK. On the other hand, if you look at the awards in Ireland, the percentage of claims with a personal injury award is roughly five times higher than in the UK. When this percentage is extrapolated over the vehicle years covered, personal injury claims are two and a half times more likely to arise in Ireland than in the UK.
The claims costs are another factor. The generosity of our judges astonishes me. Claims arising under comprehensive cover were up to three times more expensive in Ireland. Similarly, claims arising under non-comprehensive cover were roughly five times more expensive in Ireland. I am astonished at how generous judges are with other people's money. In relation to vehicle repair costs, in general the cost of spare parts is higher in Ireland than in the UK. The extent of the differential depends on the make and the age of the vehicle. It runs to about 33 per cent.
I will refer to my own personal experience with a car insured in Belgium. I insured a new car in Belgium. I had it there for two years and then took it back to Ireland. I insured it with a subsidiary of the Belgium company in Ireland and was charged two and a half times as much for the same cover in Ireland as I was paying in Belgium. By chance I met the chairman of the subsidiary on the train one day. I put this to him and asked him for an explanation. He told me as follows. He had the figures with him because he was going to the annual general meeting of the company on that day. Litigation costs in Ireland are so much higher that the company have to write in £70 per insured vehicle above what they would charge in Belgium. Uninsured drivers are so numerous on the roads that they have to put in £20 per insured vehicle. The PMPA debacle costs £10 for every car insured in Ireland. That is £100 straight away. He then asked if I wanted to hear all about the claims. I said "I think I have heard enough for today".
We know from the evidence in Britain also that the claims awards in Ireland are excessively high. Other countries have had this problem in the past. They dealt with it by having a standard award for a particular type of injury. A judge in Britain or in mainland Europe awards £X for a broken leg; for an eye injury £X + Y is awarded and so on. Here in Ireland each judge makes up his or her mind on what the award will be, depending on how the judge likes the claimant, or whatever. Then we have the arranged crashes. More recently I heard that this extended even to south county Dublin. I got this news secondhand. I have heard that a bus driver has been suspended from Bus Átha Cliath for having arranged a crash with a car driver. It is so profitable to make a claim that I would not be surprised if that story were true. It is a fact that people are arranging crashes with old bangers of cars and getting awards which are out of all proportion to the value of the vehicles. The insurance companies are not blameless in this. They prefer to pay up than to fight the claim. Indeed if you look at the awards that were made by Bus Átha Cliath in 1991, they amounted to a total of £11 million, up £3 million on the previous year.
I could go on and on, but I promised Senator O'Keeffe that I would be brief. This racket will continue as long as we fail to take steps to deal with it. It is within the competence of our own legislators to deal with it. For some reason we are not dealing with it. This is resulting in a tragedy for many people who cannot get insurance. All of us who get insurance are paying through the nose for it. It is making our companies less competitive. It is encouraging up to 75,000 people to drive without insurance cover; in other words, it is making criminals of people also. I thank Senator O'Keeffe for accommodating me.
It is always a pleasure to oblige another Corkman.
I knew that was how you would feel about it.
This one happens to be a gentleman.
I would like to take this opportunity to welcome the Minister of State at the Department of the Taoiseach to the House. We were both elected to Dáil Éireann in 1987. We were good friends through that time. I am particularly delighted for him because he is a man of talent and great ability. He knows the ropes and I have no doubt but that he will perform excellently in the portfolio that has been given to him by the Taoiseach. I hope that his reign in ministerial ranks will be of long duration.
It is fair to say that exorbitant car insurance rates are not so much a national disgrace as a national outrage, particularly when you look at premiums for young drivers under 30 years of age. They are all regarded as being in the high risk category. When I look at insurance companies I ask myself is the day fast approaching when insurance companies are looking for drivers who are absolutely no risk and who at the end of the day will ensure that they return a profit on that small segment of our society. We were promised that with the abolition of the juries and the reduction of senior counsel we would have a dramatic decrease in the price of premiums. Everyone now knows that what has happened is quite the reverse. We saw the situation in 1988-90 when there was a 25 per cent hike.
I would be inclined to say — and I agree with Senator Raftery on this — that the time for talking has ended. We must now look at what action can be taken to get at the very root of the problem regarding costs in the motor insurance industry. It is intolerable to think that those drivers who have had no accidents, no claims and full no claims bonuses were faced last year with a hike of 25 per cent in their premiums.
It is significant to remember that when the abolition of juries was mooted as well as a reduction to one senior counsel, the legal profession itself was very much opposed to this measure. They indicated quite clearly at the time that in their opinion it would not result in reducing insurance costs. Today, privately, within insurance companies they say that the costs, in fact, have increased. They, privately, are questioning whether there is collusion or some arrangement between the members of the legal profession to ensure that what they claim at the time becomes a reality. No one can be certain of this fact but we can be sure that there has been a significant increase in the awards given since the decisions were placed in the hands of judges.
The Government should take the issue in hand. Perhaps they should look at this idea of a quantum of awards relating to various injuries. Why not set up a data base for the insurance companies which would indicate the most prevalent type of injury and the most prevalent type of claim, and then relate the awards that have been granted right through the country? There are inconsistencies in those awards. We should aim at having a level playing pitch. While it is not possible to be specific in terms of injuries, it should be possible to set down an average scale of awards which would act as a mean which could be followed by justices all over the country.
I would like to deal with the insurance companies themselves and particularly with the interfacing between insurance companies, the legal profession and, indeed, the engineering profession. Let us first look at the level of awards. As I said, there is no consistency in the level of awards all over this country. We have an insurance company being advised by the legal profession whether to take a case to a court or not. Indeed, insurance companies have been criticised for not settling cases far earlier and at far less cost. This House should look at the dilemma that is facing insurance companies in this regard. The legal advice is to take the case to court but looking at it from a subjective point of view, obviously a precedent tells the legal representative to present his case to the court and the likelihood is that he personally will get a bigger slice of cake at the end of the day. The basis for that is that the more time he spends the more money he earns and the higher the percentage that will accrue to him from the very high level of compensation that is now the norm in the courts in this country. The insurance companies are left in a cleft stick.
I would also like to look at what are termed in insurance parlance as "attendant costs". Here again the experience is that attendant costs are extremely high. Under the present arrangement, it is not surprising that this is so. Take, for instance, the engineers on both sides of the argument. The engineer is asked to look at the scene and make a report. He or she makes a first report. When it is coming to court engineers on both sides are sent back to verify and to issue a second report, so that this will stand up in the court. They arrive at the court and the engineer says to himself that the case might take a day, two days or even three days. As far as he is concerned, he cannot take a chance, so he charges on a daily basis. We all know that those charges can range from £1,000 a day to £3,000 per day.
Let us look at the medical profession. It is possible in certain cases to have up to eight consultants involved in both sides of the argument. I know recently of a case where four consultants were asked to attend the High Court. They each demanded a down payment of £1,500, just to attend the High Court. If this had not been paid, they would have refused to attend. If they were looking for a £1,500 down payment to attend, one can imagine what the total payment to each was at the end of the case — each received £8,000 for a day and a half at court; each of the four on the litigant's side was peripheral to the case. What I find ironic, however, is that in that same case an expert was invited from the UK but that expert made no such demand for a down payment. At the end of the day his fees were far less than those who were peripheral to the case in the first place.
Insurance companies, I also understand, have a procedure where they estimate claims on the basis of award level, plus 30 per cent costs. My understanding again is that the actual attendant costs are now working out at a minimum of award, plus 50 per cent costs. Again, I can cite a recent case where liability was admitted. An award of £15,000 was made and the attendant costs were £12,000 — 80 per cent. If you take that a step further, and look at a case where there is a far higher amount of money involved in the award, can you imagine what the attendant costs are? Should it not make you wonder why premiums are so high in this country? It is interesting to note that the insurance companies lost £116 million in 1989 compared to a premium take of £381.2 million in the same year.
There is another factor the Minister might look at. It was also thought that claims or costs in urban areas, particularly major urban areas, would be far lower than in the country in general. Again, I understand that the reverse is the case. That too is something that is worth looking at and I would like the Minister to take note of it.
I would now like to look at a number of specifics under various headings. The first would be what I would call the ambulance chaser. Now we have what I would term the unseemly spectacle of solicitors advertising publicly for litigant business on the basis of try-on claims, and on a no win, no fee basis. Instead of curbing the number of claims, they are actually encouraging them. I charge them with doing a disservice to the young people of Ireland who, at the end of the day, are the ones who have to pay the piper. The time has come when the Minister for Industry and Commerce in particular must cry halt to this obscene practice, and place a ban on such advertising. He must eradicate, as far as possible, the mentality which wants to sue that pervades our society.
The insurance companies stand accused of carrying inordinately high administrative costs. There does not appear to have been any attempt to rationalise their operation and so they also stand indicted. Where are the proposals for reform? Today I would like to list a number of proposals that might make some difference to premium costs.
The time has come for insurance companies to set up a data base which would identify the types of claims made. Everybody knows that the incidence of whiplash is higher here than in any other country and compensation for whiplash injuries forms a major part of motor insurance costs. That data base should record the name of the claimant. There is evidence to suggest that many people claim repeatedly. To the insurance companies I say: "Get together, get a data base, place documentation on file and let us see who is benefiting and if they are benefiting once, twice or more often." I have no difficulty with the genuine accident case who deserves to be compensated but I believe that a compensation mentality motivates people to claim compensation for compensations sake.
There is a level of deviation in awards granted by various judges around the country for certain accident cases and particularly for whiplashes. It is astonishing that we have not yet reached agreement on the amount of damages appropriate to this injury. It is time some consistency was brought to bear.
I would also look at the type of legal officers involved in insurance claims. It would be fitting for insurance companies to establish a pattern with regard to certain legal practices in litigant claims. That would throw light on what is now a dim subject.
What can the Government do? The wrongs are not only on one side. I propose to the Minister that it is now time to set up a claims tribunal, which would not be welcomed by the legal profession because it would bring down attendant costs. This is the way forward. Anything that we as a Government can do to reduce attendant costs should be done. We could have the transfer of engineering and medical opinion at the minimum cost.
I ask the Minister — and I know that he has this in mind — to legislate for cars in poor mechanical condition. There should be increased vigilance in this area. The roadworthiness of cars in Ireland should be subject to a mandatory inspection after five years.
On the subject of drink driving, one has only to look at the incidence of fatal accidents and major injury as a result of this practice to denounce it. We have seen the success over two Christmases of vigilance on drink driving; 1990 saw a dramatic decrease in the number of accidents. The reduction was not as significant this year but other factors kept the numbers of accidents up.
Many young people rather than driving to discos or whatever have established a pattern among themselves of coming together as a group and hiring a taxi. They decide that drink driving is not for them, by and large. We who are older suffer from the older syndrome. The taxi concept is more difficult for us to accept, but young people should be encouraged in this regard. We should ensure year round vigilance on drink driving.
The incidence of uninsured driving is massive in Ireland; that is the only term I can use for it.
Every city around the country has a joyrider problem. I know about young people's problems as I am involved with 3,000 young people in college every day. The thing uppermost in their minds and what they describe as a national scandal is the fact that they cannot afford car insurance, although many of them would like to be able to drive. The temptation to drive a car uninsured is great. The law, as I understand it, states that for a first offence of no insurance an endorsement is given and for a second a six month ban is imposed. Surely that law is inadequate. The time has come to ban uninsured drivers from driving with a fine in the first instance and a jail term on a further offence. We should keep in mind that our insurance premiums pay for the damages, awards and costs incurred by uninsured drivers involved in crashes.
I try to be as constructive as possible. The cost of motor insurance premiums is a serious problem in this country. I speak for everyone affected and especially for young people. I ask the Minister to bring the matter to the attention of his Government colleagues and to make sure something is done now rather than later.
I congratulate the Minister on his appointment and welcome him to the House. A great deal has been said by the two previous speakers, all of which I agree with, and I do not intend to go back over it.
I hope the Minister will take a long and serious look at the high cost of motor insurance, a crippling national burden which leaves many of our companies unable to compete. Senator Raftery referred to the report by Coopers and Lybrand on the cost of private motor insurance in Ireland. The survey of premiums indicated that the differential was on average 48 per cent higher for comprehensive cover and 133 per cent higher for non-comprehensive cover than in the UK. That confirms what we all suspected. It is extremely difficult for young people to get motor insurance cover. In many instances, as every Senator knows, young people trying to start a small business cannot do so because they cannot afford the cost of motor insurance. There is great temptation to drive without insurance and we have heard of 75,000 people driving without insurance in Ireland.
There are points which could be made with regard to insurance brokers. I understand they get a 5 per cent take on premia. Do insurance companies ever divulge their expense ratios? Do we ever hear the cost of handling claims? How much wastage is there? I hear there is great inefficiency in the claims departments of insurance companies and a great deal could be done to improve efficiency there.
The cost of advertising amazes me. One frequently sees insurance companies advertising for motor insurance, yet we know they are already reluctant to take on motor insurance and say that it is one of the least profitable areas. I get the impression — I may be wrong — from statements made by the Insurance Federation of Ireland that their attitude is that if people want to make claims, they should be free to do so since it is the customers' money. They hike up premiums to cope with the situation. That is unfair on the public and an unrealistic response.
With regard to legal and medical expenses, my husband is a surgeon who had on occasions to give evidence in the High Court. He dreads such occasions because the inefficient manner in which the legal business is conducted disrupts his whole day. He has no idea at what time of the day he will be called on and I am sure he would be delighted to have his day disrupted if he got anything like the money mentioned by Senator O'Keeffe. I do not know who receives those amounts but my husband has never received anything of the sort although I accept what Senator O'Keeffe says. It is unreasonable to expect a consultant who has to be in an operating theatre to be available at any hour of the day to attend the High Court within a couple of minutes. Sums awarded for medical and legal expenses are colossal. In a recent case a third party received £11,000 in settlement of a claim and legal fees amounted to £6,000. That seems unrealistic and totally out of proportion.
I agree with the points made about deviations in the level of awards. In the UK figures are laid down for whiplash, a broken arm or whatever and they stick to those figures, whereas here, as Senator Raftery said, generous judges pay out claims which are three to five times higher than in the UK.
One way to reduce the cost of claims would be to reduce the number of accidents. We need realistic enforcement of traffic laws, a crack-down on speeding, drunken driving and dangerous driving. If we improved traffic surveillance on the roads we would see a realistic reduction in the number of accidents. People take risks all the time on Irish roads because they do not think the chances of being caught speeding are significant.
On holidays in Italy many years ago my husband was driving the car and he, unlike me, is a most law-abiding person. We were stuck in a long row of vehicles on a narrow road for ten or 12 minutes. He suddenly saw a space to move out, but moving out obliged him to cross marginally over the white line. Within seconds, he was pulled into the side of the road by a motor cycle cop and duly given a dressing down. For the rest of the holiday in Italy we drove with extreme caution. If the same thing happened in Ireland with serious and realistic penalties, people would drive more safely and the number of accidents would be reduced.
There is a lack of consistent traffic law enforcement. I do not blame the gardaí because the gardaí are understaffed and their equipment is out of date to deal with the problems they encounter. We need effective deterrents to bring down the number of accidents. We saw the magnificent ways in which gardaí coped with drunken driving over the last two Christmases. We know how those measures forced the seriousness of drinking and driving on our attention. Now, before many people go where they will take a drink, they decide how they are going to get home and make arrangements. That proves that Garda crack downs work. Would insurance companies be prepared to contribute to the cost of law enforcement to maintain the present cost of premia? I was under the impression — I may be wrong about this — that two years ago when the Garda initiated this clamp down on drunken driving that insurance companies contributed to the costs of the campaign but I have not been able to confirm that. I would like to see that happening.
Senator O'Keeffe referred to the deplorable condition of many cars on Irish roads, yet there is no effective method for removing unroadworthy cars from the roads. There are a range of improvements which could be made. I ask the Minister to look at traffic law enforcement to see what can be done. Motor insurance costs are a crippling national problem and we must put all our efforts into seeing what improvements could be made to reduce the cost of motor insurance for everyone.
I welcome the Minister of State, Deputy Kitt, to the House and reiterate the sentiments expressed by other speakers that he will make an excellent job of his portfolio. I read in the paper today that he has been taking a stick to male chauvinists in golf clubs, telling them to get their house in order and to provide equal opportunity in golf clubs for women as well as for men. I wish him luck.
I would like to continue with a point made by Senator Hederman in relation to enforcement of traffic laws. She is correct when she says we have a dismissive attitude to traffic law enforcement. When we drive from A to B, we take chances we would definitely not take in any other European country. Like Senator Hederman, I have had occasion to travel in Europe and I have always been extremely careful to abide by the traffic laws for fear of being detected, but in cases of speeding and taking chances overtaking cars, trucks and so on at home, we tend to believe that the chances of being detected are low and consequently we do not abide by traffic regulations as we should. This is not a criticism of the Garda Síochána; resources have not been provided to ensure adequate policing of the traffic code.
What causes accidents? Something must cause them and 99.9 per cent are caused by human frailty in some shape or form which is the reason for our high rates of motor insurance premia. Our accident proneness may be part of our Celtic inheritance; we are casual in our approach to everything. That can be an advantage in some instances but is not appropriate to driving practices.
One of the reasons for the high cost of insurance premia here is the multiplicity of accidents and claims made and there is a significant difference between claim figures in this jurisdiction and in the UK. Motor insurance cover is 48 per cent higher for comprehensive cover and 133 per cent higher for non comprehensive cover in Ireland than in the UK.
It was interesting to hear Senator Raftery talk about his experience in Belgium. When he came back to this country he said he paid two and a half times more here for the same cover he had in Belgium. There has to be a reason for that difference. The statistics I quoted come from a comparative review by Coopers and Lybrand for the Irish Insurance Federation.
On the other side of the coin the average cost of claims in Ireland is 74 per cent higher for comprehensive cover and a massive 141 per cent higher for non comprehensive cover than in the UK. We have to look at the cause for the disparity between the jurisdictions in relation to a number of different areas, claims frequency, claims cost, number of accidents, high repair costs and the type of preferred cover. It is significant to note that claims frequency in this country is half the annual UK rate but the percentage of claims involving personal injury award is about five times higher than in the UK. A disturbing statistic reveals that we have two and a half times the number of UK fatalities; two and a half times more people are killed here in relation to the incidence of casualties and the number of vehicles registered. That is an alarming statistic. I would have expected with the huge volume of traffic on UK motorways and frequent accidents and pile-ups that the number of fatalities there in comparision with this country would be greater, but that is not so. These findings are taken from an expert review by a group of accountants who did an indepth comparison of Irish/UK insurance history.
The high cost of spare parts is another factor; costs are increasing all the time and people because of other financial pressures defer buying new tyres and paying for car maintenance, which ultimately increases the potential for road accidents. When traffic laws are not implemented people presume that nine times out of ten they will avoid detection for traffic law violations and vigilance is thereby reduced.
Motor premia costs in Ireland are rising faster than car prices and the rate of inflation; car prices are high but motor insurance costs are increasing at an enormous rate. A number of factors contribute to the excessive cost of premias. Third party awards are high, we have high accident levels and the Irish have become a litigious people. We tend to follow up every opportunity to obtain a few pounds.
I question the incidence of sharp practice by solicitors who advertise on a no win no fee basis, encouraging people who would not otherwise get involved in litigation to think they have nothing to lose by doing so, since if they do not win they will not have to pay. One result of this opportunity is the enormous increase in premia costs to cover insurance claims.
The report also indicated the different types of loading insurance companies put on different premia to cover all the different types of costs. We need to take a fresh look at the motor insurance industry to come up with a solution to this enormous problem.
It is easy when there is a problem to pick a scapegoat to blame and in motor insurance costs the scapegoat has been the young driver. Young drivers have been identified rightly or wrongly as the group most likely to cause traffic accidents so their premia has been heavily loaded. Unfortunately many young people have difficulty getting jobs and in many cases jobs open to them entail driving, but when they try to get insurance cover they find the cost is greater than the price paid for the vehicle. You see the insurance companies themselves advertising every day in the paper: "Young and energetic person needed to sell insurance" but they have to have a motor car if they are going to get involved. The whole thing is a chicken and egg situation, because when they get a car they have to get insurance on it. When they send in a proposal form which asks what age they are, the premium is loaded on them with the result that a lot of them cannot afford it in any shape or form.
What amazed me altogether is the recent development whereby the insurance companies have these blacklists. If you were to get all the blacklists of types and categories of people they will not cover, I would suggest that almost every category will not be covered by some insurance company or another. I was absolutely amazed to see that, for instance, the crews of oil rigs are on a blacklist with one insurance company. Why they would pick people in that category to deprive them of insurance amazes me. Another category are tarmacadam contractors, who are on another black list. There are, of course, all the standard ones like bookies and jockeys who for some insidious reason are barred or put on this black list. If they want to get insurance then the premium will be absolutely loaded against them. Is it just that today an insurance company wakes up and says "Look, we will blacklist this particular category of people because we want extra money?" It is absolutely unbelievable.
On the legal costs, wrangling over liability, as was mentioned in relation to solicitors fees etc., takes up a large percentage of the total payments made by insurance companies. That is never received by the victims being compensated. In fact, there have been instances where the victim did not receive any cash whatever at the end of the day. All the cash awarded went towards paying the legal costs involved. As has been mentioned, all of these people are making enormous amounts of money out of it.
By and large, the cost of motor insurance in this country is absolutely catastrophic and I think it is high time we drew up proposals whereby at least the people would see that they are getting value for money. It is horrific to think that people who have been driving for 30 or 40 years or whatever, have never had an accident and have a full no claims bonus are still burdened with huge amounts of money to pay if they want to take out insurance.
Again, I come back to the young driver who passes his test, gets his full licence and wishes to be added to the parents insurance. The cost of adding that young person to a parent's insurance is almost as much as the full insurance cost itself. As Senator O'Keeffe said earlier, that leads to young people taking the chance of driving motor vehicles without insurance and that is causing enormous problems. We should have some sort of a system in place whereby it is recognised that people have been driving for a certain length of time and have a full no claims bonus.
It is not all that long ago since my own insurance was £19 plus a £2 membership fee. The enormous increases that have taken place in the whole insurance field in the interim are just unbelievable. You are talking about between £300 and £600 for any type of insurance cover at the moment. Where is it going to stop? If we do not cry halt now and try to remedy the situation, when will it happen? We are driving the cost of insurance away out of reach of quite a substantial number of people, particularly young people; and it is no wonder, as I said, that quite a substantial number of those people are taking the chance of driving without insurance.
I would support 100 per cent the call by Senator O'Keeffe for a support claim tribunal to reduce the attendance cost. I think this claims tribunal is extremely important in order to reduce all of these additional costs for certain experts, be they engineers or medical people, who attend at court and charge enormous fees for such attendance. In some cases they may never be even called. They just happen to be on call and for that they are paid enormous sums of money. The result is that the cost of insurance for the ordinary individual becomes enormous.
The situation in regard to motor insurance at present is very serious. We are at a crisis point and I would appeal to the Minister to take this matter in hand. I know he is very concerned about the whole area of motor insurance, but I think that it demands immediate and urgent attention. When you are paying for something you are looking for value for money. What we have got to do in this instance is get value for money, and the vast majority of the general public do not think that they are getting value for money.
I was always under the impression that in law an insurance company had to cover an individual when an application was made, but I have had experience of specified motor insurance companies refusing to cover particular people for very spurious reasons. I am anxious to know if it is a point in law that a person must get insurance, even though the premium may be loaded, and that the insurance company must reply with an invoice or whatever setting out what the cost would be. I have had experience of cases where the insurance company refused point blank to cover the individuals concerned.
May I call Senator Upton, please?
If you are calling on Senator Upton, Sir, I would have to question the order in which speakers are being called, without any disrespect to either yourself or to Senator Upton. It would appear — and to me this is quite extraordinary — that the Fine Gael group are now allocated every sixth slot. That has not been the position heretofore and it would appear to be the position that is arising today. I am registering my protest and I would certainly like an explanation if you are insisting on that order.
Acting Chairman
Thank you, Senator Howard. You will realise no discourtesy is in any way intended to your good self or indeed to the Fine Gael group, but it is my understanding that a speaker for each group recognised in the House is entitled to be taken in turn. This is the practice and procedure. It is on that basis I am given to understand that Senator Upton is the first speaker for Labour and therefore on this established basis I am calling on Senator Upton.
Just before Senator Upton comes in, I will have to say that I find the arrangement quite unacceptable and I will be asking that it be referred to the Committee of Procedure and Privileges.
Acting Chairman
That would seem totally appropriate, but I am sure that you will understand that in the circumstances I feel obliged to call on Senator Upton.
Mr. Farrell
Was that not always the case? There is no change. It has always been the case since I came into this House and I cannot understand how we are saying that it is different today.
Acting Chairman
There are two aspects to this. It has been the custom for many years, as you rightly suggest, that a speaker for each group speaks in turn but over and beyond that, it is the privilege of the Chair to decide which speaker is to be called at a given time. So, I am calling Senator Upton on both bases.
I welcome the Minister to the House. It is the first time I have spoken in the House when this Minister was present. I congratulate him on his appointment and I wish him well. I am sure his promotion to the position of Minister will help the city of Cork. That is desirable, even if I am not from Cork myself and I hope to represent parts of Dublin.
A number of speakers have already referred to the differentials in the cost of insurance premiums in Ireland and in the United Kingdom. The figures have been given indicating that for comprehensive cover in this country it is something like 48 per cent higher and 133 per cent higher for non-comprehensive cover. Much of the cost of insurance is centralised on younger drivers and on certain categories of drivers and there seems to be a particular loading on drivers based in Dublin and the greater Dublin area. That creates enormous problems for this segment of the population.
Claims under comprehensive insurance cover are up to three times more expensive in this country than in the United Kingdom. Personal injury costs are reckoned to be four times more expensive here than in the United Kingdom. The rates of fatality per million cars or vehicles are considerably greater also in this country. Despite this, the number of claims which are made here seem to be lower than in the United Kingdom, although it has been suggested that this data may arise because of the fact that a certain number of small cases are not reported. We have then a fairly serious problem in relation to the costs of accidents and this in turn working its way back to the cost of insurance.
There must be a considerable number of causes for this reality. The one I would imagine is important is the way we drive. Some Irish people, who outside their car are the most pleasant, courteous and civilised people, suddenly change when they get behind the driving wheel and become aggressive, disagreeable and insistent on having things their way and taking precedence over other drivers when a little common sense would indicate otherwise.
There is, of course, also the problem with the standards of our roads. They leave a great deal to be desired. I imagine that has to be a factor in the genesis of some of the accidents. The way we park must also contribute to some degree. People here in many cases abandon their cars rather than park them. They simply throw them away. They leave them and walk away from them. Then they come back oblivious to the fact that what they did created a serious risk of accidents or creating serious problems for the rest of the community, who are forced to wait while they have a chat, for example, with somebody they meet on a casual basis. That is a great pity. It seems to be very difficult to enforce the parking regulations. There seems to be a sort of culture of ignoring parking regulations. I imagine the people who have the unpleasant job of enforcing these regulations experience a lot of hostility from irritated motorists who are, for the most part, oblivious to the regulations, and, where they are not oblivious to the regulations, the attitude is, "what harm is it anyway?".
There is also the standard of car maintenance. That is very important. That, in turn, goes back to the broader costs of keeping a car and that is tied up with the cost of insuring cars. There is also transport policy — our inability to seriously address transport policy and in particular our inability to seriously tackle the basic questions of transport policy in urban areas, especially in the city of Dublin.
In many ways I see a certain amount of merit in freeing up the legal business so that people in the law can advertise and offer their services. But, I tend to recoil from some of the advertisements now being used to promote services for people who happen to be injured or to have a claim. I have to acknowledge that there is a certain amount of merit in creating competition between legal firms and creating an openness in legal matters which did not pertain until fairly recently. However, I find distasteful the tone of some of those advertisements. People used to talk about people being involved in coffin chasing, but this is a form of ambulance chasing.
Then there is the awareness of most Irish people about the causes of accidents. I honestly do not believe that the public are fully aware of the causes of accidents. I am sure the Department of the Environment, or what used to be An Foras Forbartha, do a good job analysing accidents and trying to figure out why accidents happen on different occasions and in differing circumstances. I am not happy that the results of the research done by the Department of the Environment is adequately communicated to the public, nor am I happy with the level of preventative measures which are at present being utilised. There must be great scope for making people aware of fairly simple basic things they could do which would help to reduce the risk of accidents and which should result in the elimination of a large number of accidents.
The number of fatalities in this country, as I have said, is considerably greater than in the United Kingdom. There must be a number of factors causing that which are easy to tackle. I know that the factors which relate to the standards of roads and so on are enormously difficult to tackle because of the expense involved. But there must be fairly basic things in relation to behaviour which could be addressed. Very large numbers of the public are not aware of the factors which create accidents. You see "back spot" signs on the roads and that is to be welcomed; I suppose they do serve some purpose, although one would have to express a certain degree of alarm as to the impact these signs make on people.
There was a small research project carried out by a psychologist in University College, Dublin. He analysed the impact which passing signs had on motorists. I must say that it was with some alarm I learned that the impact was relatively minor. When the subjects in this experiment were asked to list off the signs they had passed in the last mile before the analysis was run, quite large numbers of them were totally oblivious to the fact that they had passed certain warning signs and so on. Worse than that, some of the subjects were quite confused by the signs. They had drawn erroneous conclusions from what they had seen. Further, in relation to some of the signs, despite the fact that the sign had registered with a certain proportion of the sample, it still had very little, if any, impact on how the motorist behaved. I think that is an important discovery with significant implications. It is the kind of thing we should be seeking to address.
In relation to the cost of insurance, I would like to take up a point made earlier by Senator McKenna. It relates to my belief that the Government should now seriously consider the introduction of a no fault liability system in relation to insurance such as that used in Canada. This would reduce legal costs because of the removal of the need to prove negligence. That would be very important. It would also simplify the system. It would streamline it, it would remove uncertainty and it would undoubtedly eliminate the astronomical legal costs for motor insurance claims simply because these claims would no longer need to be processed through the courts.
I want to make specific reference to the situation in relation to the insurance of motor cycles, which I believe is in urgent need of modification. It is totally unacceptable that apparently in this country at present there is only one company which is prepared to insure motor cycles. There is a clear obligation on the Government to sort out the insurance market so as to allow some choice for a motor cyclist where the question of insurance is concerned. The fact also that passengers on motor cycles apparently are not insured when the motor cyclist is insured is another very serious anomaly in the law and should be addressed.
There are two fairly clear implications to that. First, there should be an obligation for passengers to be insured. If the Government are not prepared to insist on that obligation, I am beginning to think that there might be a fair case to be made for banning pillion riders on motor cycles. The risks which are attached to the use of motor cycles worldwide, but particularly in this country, are enormous. There is a very high risk of injury and accident attached to the use of motorcycles. I must confess I do not fully understand what the reasons for that are, but certainly the statistics are very alarming. That is one area on which the Government should focus and come up with some solutions which would limit the risks attached to the use of motorcycles.
The under 25 motor car insurance market is also nearly a monopoly and it creates dreadful problems for people in this age group who need to use a motor car for their job. There is a special problem for young Dublin people in this category, who have an extra burden to carry because not only are they loaded because they are under 25 years of age but they are also loaded because they are resident in the Dublin area.
I would like the Minister and the Government to spell out what the implications of the Single European Act and the Maastricht Summit will be in relation to the motor insurance industry here. Our motorists some years ago were given the false impression that our entry into the European Community, the introduction of the Single European Act and so on would result in a substantial reduction in the cost of motor cars. Obviously, that has not materialised, and I would like to hear the Minister's view in relation to the effects that the Single European Act would have on the cost of motor insurance in this country.
I have a few final points. Some people seem very anxious to go to law in this country. I wish people would be less anxious to have recourse to law to sort out their differences. I also wish people were more realistic in relation to what damages they can expect to obtain in certain categories of cases. A lot of the time these cases never get to court, but enormous expenses are generated because the cases get to the Round Room down in the Four Courts where they are settled.
There must also be scope for a less contentious approach to the definition, extent and implication of injuries. I imagine that many injuries are fairly clear cut in terms of the effect which can be predicted from them. Most doctors, broadly speaking, would come to the same conclusions in relation to the effects of certain types of injuries. I would hope that in many of those cases those matters could be taken as read, that they would be agreed, rather than situations arising where doctors, whose time is very expensive, find themselves down around the Four Courts, perhaps spending four or five days there, as somebody already suggested, and not even being called. I would hope that in many of those cases a written report should be adequate to describe what is involved. Certainly, there must be considerable scope for saving in that matter also.
I would like to begin by expressing my good wishes to the Minister of State who is with us.
Acting Chairman
Could I interrupt the House for a moment? I hope I have the indulgence of Senator Farrell. My apologies to him.
Mr. Farrell
I am always a peaceful man.
I appreciate Senator Farrell's gesture. Without being contentious about the matter, could I also say that, if I had not been permitted to avail of this slot, my group's slot would have moved to No. 7 had Senator Farrell taken his turn; and if in the course of Senator Farell's address the Progressive Democrats happened to arrive, then the Fine Gael slot would have moved to No. 9. I find that unacceptable.
Acting Chairman
There was a Fine Gael speaker.
I am talking about the slots. It is very easy to count them, and I have them listed here, but I do not want to waste my time now.
Acting Chairman
Senator Raftery spoke to the debate. For the record, I understand that Senator Raftery has already spoken as the first speaker for the Senator's group.
In slot No. 1. I am making the point that had the Progressive Democrats arrived when Senator Farrell was speaking, I as the second speaker would be in slot No. 9. I believe that is not representative of the situation in the House. There are other channels which can be used. I am simply giving that as an explanation for my concern. In expressing my appreciation to Senator Farrell, I want you to understand, Sir, that I am not by any means attaching blame to you in the circumstances.
Acting Chairman
Thank you.
Mr. Farrell
The Committee of Procedures and Privileges, if they wish, can change the rota; but the rota is running today as it has run since I came here six or seven years ago. It is no different.
Acting Chairman
Just to clarify for Senators, the situation is that there has been a custom that speakers for each group will be called in turn. The Members of the Seanad may or may not wish to change this custom, but the actual Standing Orders of the House state — it is under Rule 31 of our Standing Orders — that if a Senator desires to speak he shall rise in his place and if more than one Senator shall rise at the same time the Cathaoirleach shall call upon one of them and that Senator shall address the Chair. That is the only actual rule, whatever customs there may be or not be — and some years back the custom was that there was no particular order as such, even though it was then the custom simply to move from one side of the House to the other side. What I would suggest, if I may, to Senator Howard and other Senators is that this be discussed by the Committee of Procedure and Privileges or through the Whips. I appreciate Senator Farrell's gesture and his courtesy and also Senator Howard.
Thank you very much. That is the course I would like to see taken. I hope I am not going to lose time by endeavouring to clarify this situation.
I welcome the opportunity to speak on this matter of the cost of motor insurance. Could I also say that, despite the difficulties I had to contend with, I was also expressing a view this morning on the Order of Business that the time limit proposed for this debate was far too short. I was confirmed in that view by the excellent contribution that came from Senator O'Keeffe. It was regrettable that he had to condense his contribution and leave aside parts of a well thought out, worthwhile contribution in order to come within the time frame. Putting important matters such as this in a short time frame is not satisfactory. Motor insurance is a burning issue, particularly for young drivers. I accept that there is an obligation on a number of interests, including ourselves as legislators, to take the necessary steps to improve this situation. There are a number of interests involved in the steps that are necessary to make an improvement. There are the steps that we can take as legislators and they have been enumerated here. I endorse many of the points put forward by previous speakers. There is a very clear obligation on the insurance industry to take a number of steps. There is a clear indication that they are providing a smoke-screen to cover their failure to do so. There is the contribution that must be made by the general public and the courts.
I refer briefly to the review carried out by Coopers and Lybrand on behalf of the Insurance Federation of Ireland in relation to rates of motor insurance in the UK compared to the rates applying here. Coopers and Lybrand are a reputable company. This report makes interesting reading. It is a source of very useful information. The report was sent to me, and I am sure to all my colleagues, by the Irish Insurance Federation. They enclosed with the report a covering letter which purported to give a condensed picture of the findings and conclusions of the report. Having read the report and the letter, I regard the letter as presenting a very selective representation of the report and of many of its conclusions, focusing on and exaggerating aspects of the report that are favourable to the high cost of insurance in Ireland and clearly ignoring parts of the report which are less favourable to the performance of the Irish insurance industry.
I find the attitude of the insurance industry as reflected by the letter and its selective representations as highly unsatisfactory. The contribution of the Irish Insurance Federation to the high cost of motor insurance is a substantial one and it would be in the interests of everybody if they faced up to that fact. If they believe that by commissioning this report and then selectively presenting the favourable aspects of it to us they can evade their obligation to reduce motor insurance costs, they are very much mistaken. I admit, as I said earlier, that we all have a responsibility as far as reducing motor insurance costs are concerned and it extends beyond the Irish Insurance Federation, but not to the extent that they would have us believe.
One aspect of both the report and the letter from the federation is their silence on the high cost of motor insurance for young drivers. I am surprised that a company such as Coopers and Lybrand ignored or failed to focus on the very serious matter of the high cost of insurance for young drivers. Apart from the fact that this report looks at the cost of insurance vis-á-vis the United Kingdom — we can bear in mind Senator Raftery's remarks earlier today about his experience in relation to the cost of insurance on his car between here and Belgium — an EC survey was conducted in 1990 based on a selection of family cars. In that survey Ireland came out highest of all the EC countries for third party insurance. We are the third highest in the EC for comprehensive insurance. Not alone were we the highest in one case and the third highest in the other but the rates were substantially in excess of the EC average.
Senator O'Keeffe referred correctly to the pressure which the insurance industry used some time ago to remove the assessment of accident compensation from juries. The claim was that once the juries were removed from the scene the level of compensation would fall, leading to a drop in insurance premiums. The reality is that that has not happened.
In June last year Fine Gael produced a policy document in relation to the matter of insurance cover for young drivers. I quote briefly from it:
Young people cannot afford the appalling cost of motor insurance. Some drivers with clean records have been quoted premiums of over £2,000.
I know of a 19 year old driver who was quoted a premium of £3,000.
While young drivers do have worse accident records, no figures sustain the view that young drivers are a seven times greater risk to insurance companies as such premiums suggest. The problem is that the insurance companies do not want to take the trouble in assessing the risks of young drivers. That is the industry's response to the failure of a company to make a starter policy for young drivers viable.
It goes on to suggest that certain matters need to be looked at to help to bring about this situation. It speaks of better driving skills, safer roads, stricter law enforcement, tighter controls on claims and a better deal from insurance companies.
If insurance companies or the Irish Insurance Federation wish to claim that young drivers as a group predominantly feature in road accidents, that is no reason to condemn every young driver. It is basic justice that each individual be first given the opportunity to start with a clean sheet. If the logic pursued by the insurance companies in categorising all young people into one group were to be followed to its logical conclusion, then young people would be discriminated against in practically all walks of life. It is only right that until a young person has an accident the normal premium levels should apply.
The question of a starter policy, as advocated by my party, should be given serious consideration. Starter drivers would be quoted only for third party cover and the premium would be about £750. The following special conditions should apply: the insured would have a clean licence and not be in breach of any of the restricted driving requirements. Claimants would be liable for the first £500 or 10 per cent, whichever is the lesser, in cases other than in personal injuries. The normal no claims bonus would not apply for the first three years and all insurers would be expected to take a share in the starter driver pool. Starter drivers who make a claim would face an escalation of their premium costs related to the cost of their claim.
Some points already mentioned in the debate are covered in the report, for example, the question of a quantum of damages to be introduced to control the cost of settling different forms of payment and the need for a claims commission. Senator O'Keeffe referred to the desirability of a data base being provided by insurance companies. We believe that greater information should be supplied by the insurance companies and the reasons for the loadings should be identified. What was proposed in the report last June is a logical approach to a serious and urgent matter and I am not aware of any serious consideration being given to it by the insurance industry.
I received the Coopers and Lybrand report with a covering letter dated 2 March and I quote briefly from the letter. It states: "I enclose herewith for your information a copy of the above report which I hope you will find of interest". It said that the Irish Insurance Federation commissioned this independent report in order to establish once and for all the key factors which contribute to the high cost of motor insurance in Ireland compared to the UK. It continued that the findings of the report will help to focus on the ongoing debate on motor insurance costs, on the real issues that must be addressed by the Government, by the public at large and by the insurance industry if we are to succeed in our joint efforts to contain or alternatively reduce insurance costs in Ireland. I have no quarrel with the letter so far and I agree with the statement that there are problems which must be addressed by the Government, by the public at large and by the insurance industry.
However, I have difficulty with the next paragraph of that letter which states that the report confirms beyond any doubt that the high level of Irish motor insurance premiums compared with the UK is more than justified by the significantly higher differential in claims costs between both countries. The report, I suggest, does no such thing. If I or anybody else were to base our judgment on this letter, the insurance industry would escape all responsibility and criticism for the scandalously high premiums that apply here, particularly for young drivers.
In their letter they talk about an action plan and the main factor leading to the huge differential in claims costs. They talk about high accident frequency, the standard of the road system and the maintenance of roads, the standard of road traffic law enforcement, the level of awards for pain and suffering, the level of professional fees and the late settlement of some claims. There are many other issues identified in the report as contributing to high insurance premiums but this letter is silent on them.
There are issues highlighted which are not favourable to the insurance industry but they are swept quietly away. The final claim made is that the late settlement of some claims is one of the major factors in all this. I ask to what extent is the insurance industry themselves a party to the late settlement of claims? That is something that they should examine.
The report compares certain areas in the UK with certain areas here. For example, it takes Dublin city and county and it takes the rest of Ireland and compares them with certain areas in the UK. It also noted that certain Irish insurance companies include the counties of Kildare, Wicklow and Louth as being within the greater Dublin area.
Smaller areas are used in the UK by the Insurance industry for the assessment of claims. I suggest that because the insurance industry in Ireland divides the country into two parts, there is a somewhat lazier attitude by the insurance industry in Ireland in investigating aspects of the situation which are approached in a much more comprehensive way in the United Kingdom. To a certain extent, that is a reasonable indication of the attitude of the insurance industry to this issue both here and in the UK.
I want to deal very briefly with a few aspects of the report, particularly page 24, on which the letter is silent. The report states that the no claims bonus element largely contributes to the differential between the United Kingdom and the Republic of Ireland. In the Republic of Ireland, the full no claims bonus varies between 40 and 55 per cent, with one company giving 70 per cent full no claims bonus. With the exception of that company, the average is 40 to 55 per cent while the corresponding figure in the UK is 60 to 65 per cent. I do not know if using the term "rip off" would be a little over the top but I am disappointed that the report did not justify the 20 per cent difference and, more to the point, I am amazed that the covering letter which sought to interpret this report should be silent on that aspect. The only reference to age is on page 25 where two cases are instanced. In the case of a 37 year old male requiring comprehensive cover, there is a 33 per cent premium variation in the Republic over that in the UK, but in relation to a 24 year old male the difference is 65 per cent.
The table on page 28 signifies that the claims frequency in the Republic is substantially lower than in the United Kingdom. This letter does not refer to that fact. The report states that to a very great extent, that is compensated for by a high accident-casualty rate in the UK especially in the minor injury category, a higher incidence of vehicle thefts in the UK — I thought we were fairly up in that league ourselves — and a tendency not to claim in the Republic in regard to minor damage incidents.
In regard to what needs to be done, a number of things were mentioned. I agree that there is need to tighten the law. I believe there is merit in the Fine Gael proposals I outlined in relation to young drivers. The attitude of the courts must be looked at. I am disappointed that the Coopers and Lybrand's report did not give examples of the compensation levels for similar claims in the United Kingdom and the Republic. I wonder why they failed to do so. That is one essential element that is missing from the report. The insurance industry should examine very closely how premiums can be reduced and not try to wash their hands of responsibility by sheltering behind favourable extracts from the Coopers and Lybrand report. There is an obligation on us all to see what we can do. Perhaps if we were not constrained by time we could develop what we, as legislators, could do. Unfortunately, I have been beaten by the clock.
Mr. Farrell
I had a motion before the Seanad some time ago dealing with motor insurance and that in some way might have contributed to the production of this very glossy report because the matter was also debated in the Dáil. I say congratulations; it is a wonderful report, an excellent report. I am sure every insurance company was singing with joy. Coopers and Lybrand could not have done a better job for the insurance companies but to hell with the rest of the community.
The report states that some occupations are regarded as likely to result in higher risks, for example, students, journalists and actors. That is a false statement. It is not that they are regarded as "likely" but "definitely". Anyone listening to the radio the other morning heard a list of occupations, plumbers, bakers and so on; every man with a trade is included. There must be at least 75 per cent of the insurance business blacklisted for higher premiums. I can only include that it is another way of increasing insurance premiums.
Senator Howard spoke about comparisons in England and Ireland. If they wanted to bring out a balanced report why not take Belfast to represent Dublin and Enniskillen to represent Tralee? Surely it would have been more sensible to take those two areas within the same country, and with a similar volume of cars and type of roads. That would have lent credence to the report. Is there any good reason somebody who lives in Beleek should pay 25 per cent less for insurance than the person who living in Ballyshannon three miles away? Does anyone suggest there is a difference in driving attitudes, conduct, rules of the road, regulations or anything else between people living in different areas? Going to Cornwall and Cumbria to find areas to compare with Dublin and Tralee was a deliberate move to bring out such a report. There is the old Irish saying that the man who pays the piper plays the tune. They payed the piper and he played the tune to suit them.
I cannot believe it takes longer to fit a tyre or a replacement bulb or headlamp in Ireland than it does in England. Anyone who had repairs carried out in garages in England knows that is not right. I dismiss that report completely. It is a glossy report solely and wholly for insurance companies.
The jury system has been abolished in claims cases. The high number of insurance cases settled on the day of the trial amazes me. Anyone who has any experience of this knows that counsel advises one not to settle but as soon as one is on the steps of the courthouse he will say it would be best to settle now. He will quote several cases similar to the one being brought where the claimant lost.
They have earned their fees for the day.
Mr. Farrell
Once they get to the steps of the courthouse they have earned their fees for the day. They do not want to waste time on one case when they might have five or six others. If the parties settle, then their time is not wasted defending in the courtroom. Something must be done about that. I said before that the no foal no fee system must be outlawed. It is grossly unfair. Why should people not go to court if it costs them nothing? I do not have as high a regard for the law and the courts as I did, especially given some of their, decisions. There is no good reason someone who broke his leg in an accident in Dublin should get four or five times more than the man who broke his leg in Beleek. It does not make sense. They would probably have the same orthopaedic surgeon.
They should be given more if they break a leg in Beleek.
Acting Chairman
The courts are outside the scope of this motion.
Mr. Farrell
I am stating why insurance costs are so high. Something must be done. There is no competition. It is a closed shop. The biggest criminals on our roads are drunk drivers and there are many of them. If somebody who has had an accident gets into an ambulance or goes into hospital before the garda arrives they cannot be tested to see if they had consumed an excess of alcohol. That law should be amended to take account of that. If the tests are carried out in the hospital the results should be made available to the gardaí. That is a loophole which is costing insurance companies and insurers a lot of money and it should be plugged.
I would like to see the speed limit increased to at least 65 miles per hour. It would be safer than to have it at 55 miles per hour because if everybody drove at 55 miles per hour there would be very big traffic jams. If a person was driving at 55 miles per hour how could one pass him out without breaking the law? People do not maintain a steady driving speed of 55 miles per hour. Everyone would agree that 65 miles per hour would be appropriate, particularly on our main roads.
On-the-spot fines could solve many problems but I will not elaborate on that at this stage. Young drivers are discriminated against in a very big way. Young people who wish to work, particularly those living in rural Ireland where there is no transport service, must have a car, yet they are ripped off by the insurance company. There should be a flat rate premium of £500, £700 or whatever. If the young person has an accident and it is their own fault, they could increase the cost of insurance to £2,000. It is grossly unfair to put a loading on somebody for a crime they have not committed. That is unjust and something should be done about it.
The courts are chock-a-block with cases. Insurance companies say it is cheaper to settle a claim for £700 or £800 than go to court. So, regardless of whether one is right or wrong if someone puts in a claim against you, insurance companies will settle it automatically. That is grossly unfair. If everyone who submits a claim is paid, it will push up the cost of premiums. I know of cases where people want the claim to be contested but the company say they will settle because it would cost too much to go to court. That is an issue we could talk about for a long time. I hope today's debate will ensure that something will be done about the high cost of insurance. I appeal to the Minister to bring in rules and regulations to curb the high price of insurance.
Acting Chairman
Thank you, Senator Farrell. I would like to thank you again for your courtesy. That concludes the statements on the cost of motor insurance, as agreed. It has been further agreed that from 4 p.m. to 5.30 p.m. we will have statements on United Meat Packers. We will commence shortly on those statements. I call on the Leader of the House, Senator Wright.