Seanad Éireann debate -
Wednesday, 23 Jun 1993

Vol. 137 No. 1

Insurance Costs: Motion.

Mr. Quinn

I move:

That Seanad Éireann views with concern the absence of a national determination to reduce the level of personal liability accident litigation which is currently causing economic hardship and lack of competitiveness through the consequent high level of insurance cost.

An amendment to the motion has been proposed by the Government side with which I have no problem. I will dwell on this for a moment as I am anxious to make my intentions clear. This motion does not fall into the category we are familiar with in the Seanad. Private Members' time tends to be taken up with motions criticising Government policy and calling on the Government to do something, or complimenting the Government. Those motions have their place but this is not one of them. This motion is not a criticism of Government nor does it say what the Government should have done about personal claims. I have no problem acknowledging what has been done by this and previous Governments and giving them a pat on the back. The Minister of State at the Department of Enterprise and Employment, Deputy O'Rourke, will know that we have established a good relationship on her previous visits here and will realise that I am not just being nice to the Government.

I agree with the thrust of the Government amendment but the objective of this motion is different. It has two aims and, in the tradition of Independent Senators, I will speak for myself. The motion's seconder, Senator Henry, will give her own perspective.

There are two things I wish to highlight. First, I want to make the public aware of the size of the issue. This is a major problem which affects every family, person and business in the country. It is a significant obstruction to us in the most important task we face, that is, the creation of jobs.

The second point I wish to highlight is that the way we have looked at this problem in the past has been wrong. We have been addressing the fringe of the problem and treating it as if it were the core. We have seen this as a problem for the Government to fix but it is not. All the Government can do is tamper with the fringe. This is important but nevertheless it is just a fringe. The core of the problem is one that only the people of Ireland can address. It is not something to be dumped on the Government. It is a problem for all of us as citizens of Ireland. I do not think that has been said before, or if it has it has not been said loud enough. As a result up to now we have concentrated on what the Government can do.

The time has come for us to redefine the problem and to attack its core. In doing so our first task as a nation is to realise the importance of the problem. People do not realise just how much of our national resources go to settling personal injury claims. Figures as long as telephone numbers tend to lose meaning. I will put it another way and perhaps views will change. Personal injury claims cost every household in this country £26 every week, that is approximately £1,350 per year per family and well over £1 billion a year. That, as the Minister knows from experience, is more than half the amount spent on education. People are inclined to say that the £26 is not out of their pockets and that insurance companies and big business can afford to pay. This is not so. People may not know it, and that is part of the problem, but they do pay. The insurance companies do not pay, their customers pay.

When a motor insurance company pays a claim, it is not the company that pays but the policy holders. As I am sure the Minister will be able to tell us, all but a tiny amount of the vast sum of money collected in motor insurance is used to meet claims and when claims increase premia rise in direct proportion. They have to because it is the motorist who pays.

The same applies to business insurance. The insurance company does not pay, it gets back in premia what it charges a business. People may not realise that business companies do not pay either, they could not. They have to pass these expenses on to their customers through price increases. Every time a person buys a packet of sugar in a supermarket or in a corner shop part of what he pays goes towards the cost of overall personal injury claims in this country. It is not a negligible part of that cost either. Many claims do not involve insurance companies at all. I understand that CIE does not insure itself any more nor do many local authorities. They have to meet the cost of their own claims and that means an increase in local rates or the fares charged by CIE.

It involves a large amount of money, the kind of money that actually makes a difference, and the general public ends up paying. The bad news does not end there because what we pay out in personal injury claims is out of line with other countries. I understand that in terms of the amount of our GDP paid out on personal injury claims, we are No. 2 in the world and that in the EC we have by far the highest level of personal injury claims. According to a survey carried out some years ago, in comparison with the UK, which is the most important coustomer and competitor for many of our businesses, we had seven times more personal injury claims and seven times more on average was paid out per claim. That is a cost difference of 49 times, not 49 per cent, but 4,900 per cent more. I gather the gap has since narrowed but the difference is still enormous.

Do these international comparisons matter? I suggest they do because, to be blunt, they cost us jobs. They cost us jobs because the higher cost undermines the competitiveness of Irish companies when they sell in competition with companies from countries that have lower costs. In effect, we sent our companies into the marketplace with one hand tied behind their backs. It is not only on Irish-owned companies that this has a bad effect on growth and therefore on job creation. We are also trying to attract foreign companies to set up business here. We need them to establish here while, at the same time, developing our own companies. These mobile investments go where they get the best package, and costs are part of that package. The fact that we have a personal injury cost that is higher than any competing location is a negative factor in job creation. Since many of these decisions are finely based, there is little doubt that this is a factor that has cost us jobs in the past and will continue to do so in the future.

Mr. Jerome Karter is a recognised international expert in this area and he highlighted the problem about five years ago in a publication called Business Insurance. He referred to the claims environment in Irish manufacturing compared to the rest of the world as appalling. Let us not fool ourselves that we can sweep this under the carpet or that our international competitiveness is not a critical issue. This week we learned that Ireland had slipped four places this year in the rankings of the world competitiveness report, published yesterday by the World Economic Forum and the International Institute of Management Development. We pay for being out of line on personal claims, we pay for it in the price of everything we buy, in higher taxes and in the job opportunities we fail to create or fail to attract.

We also pay for it other ways. Black-rock Park, a lovely park, is just across the road from one of my supermarkets. That park no longer has slides and swings. I understand the reason is that Dún Laoghaire Corporation found it could not risk the cost of having to cover itself for injuries that might take place and the slides and swings were removed. That is just one example. Others are the number of hotels which no longer offer trekking holidays — which used to attract tourists — and the number of pop concerts, sports days and private fund raising events which cannot be held because of insurance costs. It has a social effect too.

Our first task as opinion formers is to persuade people that is a very important issue. What can we as a country do about it? This is where I suggest we need the biggest change. There are two aspects to the cost of personal injury claims. One is that there are so many claims and the other is that so much is paid out on each individual claim. What we have done up to now, largely I feel because we expect the Government to do everything for us, is to concentrate on the second aspect. We have had a raft of measures, and I know more are in the pipeline, aimed at curbing the amount that is paid out in claims and at reducing legal costs. I welcome those measures — and I am sure we all do — but it should be clear by now that this is just the fringe of the problem and not the core. The core of the problem is the number of claims made and the number of accidents that occur. We are the second most litigious country in the world. To judge from the number of whiplash cases, I gather that Irish necks, for some reason or another, are four times softer than British necks.

Minister of State at the Department of Enterprise and Employment (Mrs. O'Rourke)

I would have thought we had hard necks.

Mr. Quinn

They could be hard necks as well. The real problem is that we make too many claims and it is time to address this aspect of the problem. We can do this to some extent by reducing the amounts paid in personal injury awards. Obviously the more attractive the awards, the great the temptation to make a claim. However, reducing the amount of the award, although that is important, will not be sufficient to create the necessary change. We must also change our attitude to the issue — that is the challenge. We must realise that it is not other people who pay these claims: it is us, as customers, motorists, parents, taxpayers and job seekers. We must accept that our easy-going attitude to people who make unjustified claims is not in the national interest. It must be our national priority to make our attitudes and practices in this matter more like those of the rest of the world.

The object of this motion is not to call on the Government to do more about the problem. The object of the motion is to alert the nation to the problem and to impress on people that the solution is in their hands. The motion sends a message to people that the personal liability-accident litigation is hurting the country and that we should stop hurting ourselves in this way. I hope this is the start of a national crusade against this problem.

I offer my apologies as I am unable to stay to hear the Minister's response. Senator Henry has agreed to keep me informed as I am very interested in this issue.

Dr. Henry

Although I complained to the House some days ago that I was employed in a semi-secretarial capacity due to the lack of secretarial staff for Independent Senators, I assure the House that on this occasion I do not mind acting in that capacity for Senator Quinn.

I am pleased to second the motion. I am glad the Minister of State with special responsibility for Labour is present for this debate. Senator Quinn has highlighted the extensive economic costs for Ireland that result from major claims and the consequent high cost of insurance. I wish to look at the problem in the Minister's area of responsibility as that aspect is too often forgotten. If we did not have accidents we would have not have claims and costs. I have no difficulty with the proposed amendments as the motion was put down to draw this appalling problem to the attention of the Seanad.

I wish to begin by discussing present legislation on safety and health in the workplace and also our attitude to this issue. The Safety, Health and Welfare at Work Act of 1989 is excellent legislation. It established the National Authority of Occupational Safety and Health as well as the statutory provisions and codes of contract for employment in this country. Previously only about 20 per cent of employees were covered by legislation but now all areas of employment such as agriculture, fishing, shops and supermarkets in addition to factories are covered. The Act deals not only with accidents in the workplace but also with disease contracted there and, most importantly, methods to prevent the occurrence of both.

However, in the four years since the Act was passed how successful have we been in enforcing its provisions? I suggest that in many areas we have not been successful.

There are 12.2 accidents per thousand workers per year in Ireland. In other words, there were 13,000 accidents in the workplace last year and 30 per cent of these claimed costs for injuries, a higher level of claims than that of other countries. Education in accident prevention should begin during childhood, when the child is playing in the home, and continue through the school years and into the workplace.

The National Safety Authority has only 87 employees and at any one time there are only 30 inspectors with responsibility for one million people. The corresponding ratio in England is about 90 inspectors to one million people, three times higher. All workers improve their performance on the imminent and unexpected arrival of an inspector and this is one area where we must be more realistic. A second aspect of this issue is that although the regulations are well known to large industries and efforts are made to enforce them in the workplace, I wonder how well these regulations are known to smaller firms? Some do not appear to have heard of the regulations at all. There are only 50 or so people in the National Safety Authority who must publicise the regulations and deal with all queries. It would be cost effective to employ extra people in that body.

It is estimated that 60 per cent of accidents would not take place if the following advice was followed: improved training for employees, good workplace practice — in other words not removing safety equipment from the workplace — and the application of common sense. Like Senator Quinn, I believe something can be done about such accidents. It would certainly be worthwhile to focus on the areas mentioned.

With regard to improved training for workers, an enormous number of accidents occur within a few weeks of the commencement of employment. Very often, particularly in manual work, workers are given little or no training. Good workplace practice is difficult to enforce but is essential. Unfortunately, many people appear to leave their common sense outside the door when they start operating machinery.

Companies, under the Act, are obliged to train their employees for the job and to point out the job's inherent dangers. Safety representatives should be appointed in each workplace. The Minister for Enterprise and Employment, Deputy Quinn, recently urged workers in various industries to appoint safety representatives. Senator O'Toole appears to have decided that I have undertaken the role of safety representative for the Independent Senators following my queries about our working conditions. It is extraordinary that more workers do not elect safety representatives to liaise between employer and employees. While the dangers must be pointed out to employees there must also be a return of information from the employees to the employers. The importance of safety representatives must be stressed.

How many firms display a safety statement or distribute one to their employees? How many companies explain in their annual reports how they have dealt with health and safety in the workplace and how much time and money they have spent on this issue? I have never seen such information in a company report although the Act — which imposes that obligation on companies — has been in force for four years.

We have a very casual attitude to employee safety in this country. In German factories all employees wear protective clothing. That is not the case here. It is almost impossible to persuade employees who work in noisy factories to wear protective headphones despite the well established fact that hearing is rapidly damaged by loud noises at work. Even workers who operate pneumatic drills are regularly seen without their protective headphones. I do not know if they do so because they consider it macho or because they have always worked without headphones. Many do not even wear protective glasses.

The unions have made strenuous efforts to encourage their members to abide by safety standards and the unions also help to provide safety training. It has been pointed out to me that SIPTU has been particularly good in those respects. However, not all workers, especially those in small concerns, are union members and some large firms are not unionised so we cannot rely on the unions to carry out all the training. Publicity of accidents in the workplace would be worth while. There has been a considerable drop in the number of agricultural accidents, especially those involving tractors and young drivers. This may be due to the publicity given to terrifying stories of 14 year olds reversing into slurry pits and other such incidents. More publicity of accidents in the workplace would help prevent those accidents.

It would also help if employees realised that, under the Act, they have a duty not to interfere with or misuse appliances; that they should wear protective clothing; that they are obliged to ensure their own safety and the safety of other employees and that they are obliged to point out safety deficiencies to their employers. Senator Quinn referred to the lack of cover by occupier liability insurance on playing fields and recreational facilities and I wonder how many facilities, which were given free gratis to community bodies, have now had to be withdrawn because of huge occupational liability claims being taken against, for example, a school or a holiday complex because they allowed others to use their facilities. As Deputy Deenihan said in his motion on occupier liability in the Dáil, access to the countryside is gradually being restricted and fields are being coralled. Those on the front line, such as the borough corporation have had enormous claims imposed on them.

My own personal experience will further illustrate these insurance increases. This year, I paid £8,142 in medical liability insurance, while I paid £6,000 last year — the highest rate is £21,000. If I worked in England, I would only have to pay £1,950 and their top rate is £4,000. The Minister for Health pays £14 million to insure approximately half our doctors. That amount would run a couple of small hospitals and our legal costs are on the same scale. We do not even have mutual disclosure of expert witness reports so that claims may be settled earlier. While solicitors assure me they do not allow fraudulent claims to be pursued, there is a major report in one of today's papers about a solicitor being severely reprimanded and reported to the Law Society by Mr. Justice Martin for his third bogus claim. He had claimed for special damages, loss of employment and insurance costs for a woman who had not claimed them at all — he had been involved in two previous bogus cases. While I have a healthy respect for the legal profession, I am sure he is not the only one involved in this practice and I refer again to the £14 million the Minister for Health is paying out, which could be put to great use in our hospitals and which provides only limited cover for half our doctors.

What really upsets me is that no one will take note of this Seanad motion, which affects everyone in the country while everyone will notice the debate taking place in the other House, which I doubt affects one per cent of the population. A national realisation of how much claims in every field cost the State is required — we talked about defamation here last week. Drunk driving is no longer acceptable — at least we have solved that problem — but what has been done about MOT tests and why are people not penalised for having unroad-worthy vehicles?

Mr. Fitzgerald

I move amendment No. 1:

To delete all words after "Seanad Éireann" and substitute the following: "agrees that the Government is aware of the concern caused to private and business consumers by the level of insurance costs and acknowledges that measures have been taken, and that more are planned, to improve the cost environment for insurance, including the incidence and cost of personal injury claims.".

Minister of State at the Department of Enterprise and Employment (Mrs. O'Rourke)

I thank the proposer and the seconder of the motion for the generous way in which they approached the issue and the amendment. I will briefly refer to what both Senators Quinn and Henry said and I will be present for the course of the debate and will, therefore, be able to absorb what is said on all sides of the House. Senator Quinn said a crusade needed to be initiated and this theme was echoed by Senator Henry, although in different words, who claimed that a more focused and determined approach was required.

The high sums of money given out in claims are frightening and they place us at the top of the table in this regard — we would be delighted to be there with regard to any other matter. I was most interested in Senator Henry's comments on health and safety at work and was impressed with her great knowledge on it because that area comes under my remit, but fatal agricultural accidents have been halved, which was a dramatic improvement and greatly delighted the health and safety authority. This is due in part to the massive publicity given whenever a farm accident occurs. Only yesterday, I received notification — they must be notified to the office of the Minister in charge — of a particularly horrific accident involving farm machinery. It is often young people who are involved in these accidents, but the widespread publicity has led to greater care being taken on farms and the health and safety authorities tell me that the statistics bear this out. A serious or fatal accident causes much grief not only in the immediate family but also in the surrounding community and there is an economic cost as well. We are currently reviewing staffing levels of the health and safety authority. Senator Henry said they have scant resources and I agree with her but they are highly professional and dedicated people and should be commended for their work.

The Government shares the concerns expressed in this House tonight, and indeed on other occasions, about the current level of non-life insurance costs in this country. The cost of motor and liability insurance claims totalled almost £661 million in 1991, which represented 2.7 per cent of GNP. The cost of insurance is determined, as we know, by the frequency and cost of settling claims. This cost can only be met by insurers if an appropriate premium is forthcoming to cover the risk. Ultimately, of course, the cost of claims is met by insurance policy holders, including business and private individuals. All politicians have encountered cases where the cost of motor insurance causes economic hardship to private motorists, both young and mature. We have met many young people in our constituencies who find it difficult to get to their jobs because of the cost of car insurance. In many cases, the car they own is worth less than than the insurance required to cover it.

Insurance premiums are undeniably a major cost to business and statistics show that such costs are higher here than in many competing countries — that is the competitive theme Senator Quinn raised earlier. The Department has estimated that the cost of claims, both insured and uninsured, to business, arising from road accidents and accidents at work, exceeded £400 million in 1991. I also understand that employers' liability costs to Irish manufacturing industry represents some 2.2 per cent of payroll, whereas the equivalent figure for the rest of Europe is put at 1 per cent. The magnitude of these costs is undeniably a burden on the retention and creation of employment. The Government has been aware of those problems for some time and has been attempting to identify and implement measures to improve the cost environment for insurance.

Following the work of the inter-ministerial group on motor insurance, measures were taken and more are planned, with the objective of reducing the number of motor insurance claims. They include strict and sustained enforcement of existing road traffic legislation; Senator Henry referred to the fact that drunk driving is regarded by many young people as a social obscenity and I commend them for that. Publicity has heightened awareness in this regard.

These measures include strict and sustained enforcement of existing road traffic legislation, amendments to the road traffic acts designed to reduce the accident rate and improvements to the court system for resolution of personal injury claims. Improvements to road traffic legislation, which will have a beneficial impact on motor insurance, include evidental breath testing, post-accident hospital sampling of blood and urine, reduction in blood alcohol, and increase in the disqualification period for drunk driving, the closure of loopholes in the drunk driving code, impounding of uninsured vehicles and the introduction of a mandatory disqualification period for those convicted of uninsured driving.

The Government has decided that the-work of the inter-ministerial group should continue, with a wider brief to include liability insurance as well as motor insurance. Data obtained by the Department from the insurance industry shows that approximately 67 per cent of total motor insurance claims in 1991 arose from personal compensation and cost a total of £328 million. A substantial proportion of this was borne by business. For employers and business almost all the claims, costing £172 million, would arise in respect of personal injury compensation and is carried almost totally by business.

A report prepared for the insurance industry by Coopers and Lybrand, publised in February 1992, demonstrated that the cost of personal injury compensation in Ireland is significantly higher than in the UK. Some key statistics to emerge from that report indicated that the percentage of claims with personal injury award is five times higher in Ireland than in the UK, and that personal injury claims are four times more expensive than in the UK. This is remarkable given the similarities between the two countries. Fewer than 5 per cent of personal injury actions proceed to a verdict in the courts. However, the level of awards by the courts sets a bench mark for the level of settlements in all personal injury claims, including those covered by motor employers' and public liability insurance.

Compensation for third party injuries may be broken down as follows: pecuniary loss, losses which are quantifiable and non-pecuniary loss. According to data on High Court awards it is estimated that approximately 75 per cent of the compensation awarded is attributed to general damages. The level of general damages would need to be reduced by an average of 70 per cent to bring them in line with other EC countries and by 58 per cent to match those in the UK, according to a 1990 report by Davies Arnold Cooper.

If we are serious about tackling the high cost of insurance, we must take action regarding the high level of general damages awarded in personal injury actions. Some people may not share the view that awards are excessive and may resist attempts to cap or limit such awards because it could lead to a legal or constitutional challenge. Nevertheless, in the absence of persuasive arguments why the value placed on factors such as pain and suffering, loss of amenities of life and loss of expectation of life should be of a substantially and consequently higher order in this country than in any other EC state, it may be concluded that the values placed on such factors are too generous.

The Government is concerned about the effects the high cost of motor and liability insurance is having on the community and is attempting to remedy the situation. Consultation has taken place between the Department and interested groups. If persuasive action does not work, more punitive action will be required.

In terms of reducing the cost of personal injury compensation there are a number of options which could be considered. These include eliminating compensation for general damages for all injuries, the introduction of limits which would be lower than the present awards for the various categories of injuries and limiting general damages to cases where the injury is permanent and serious.

We should not seek to reduce the level of compensation for serious injuries or introduce a system which could increase the adversarial nature of the settlement of personal injury claims and thus increase the costs associated with such settlement. The bulk of compensation costs arise in the area of small to medium sized claims, where injuries may not be permanent and serious. It is, therefore, in this area of small and medium sized claims that we need to make a choice — reduce pain and suffering compensation and lower insurance costs or retain the present regime of compensation that is higher than in other EC countries and thus our current high level of insurance costs.

One way we could reduce personal injury compensation costs and thus insurance would be to implement the option of limiting compensation pain and suffering to cases where the injury is permanent and serious. This option might also reduce the level of costs, especially legal costs, associated with the settlement of a number of personal injury claims. This course of action would not preclude those injured in accidents on the roads or at work from recouping economic loss or expense sustained through the negligence of others.

I thank the House for this discussion which affords me an opportunity to share my views on this matter. This issue will require the support of all sides if the necessary radical decisions are to be pursued. In the interests of a unified approach from legislators and bearing in mind that appropriate initiatives are being considered, I ask Members to support the proposed counter-motion. I was in this House last year for a motion tabled by Fine Gael Members and we had a sustained and insightful debate on this issue. The past 12 months have not been wasted because there is now a greater awareness of this problem. At last there is a determination to deal with this controversial issue.

We are aware from television and radio debates that there are vested interests involved in this issue. These groups have had a lucrative outflow from the figures mentioned. I foresee turbulent times ahead in dealing with this issue. I know from experience that vested interest groups can become vociferous when they see a disturbance in what has been a lucrative area. This motion, tabled by the Independent Senators, is of importance given the increased awareness of this issue.

Mr. Enright

This is an important motion and I was impressed by the manner in which is was dealt with by Senator Quinn and Senator Henry. It is an issue that will have repercussions.

The Minister referred to groups in society with vested interests who may have other viewpoints. I do not know exactly to whom or what she is referring but I presume there are various people who have legitimate views on this which may be contrary to the views of others. I am a solicitor and see this issue at first hand. I believe the views I offer are fair and reasonable and I hope the Minister will pay attention to them. It is important that we examine this matter carefully. The Minister's speech was thoughtful and careful, but I disagree with some of the points she made. Nevertheless, this is an argument that we should examine.

Insurance companies in Ireland are experts in public relations and are one of the most effective lobbies in the country. The people in this industry have enormous power and influence. Their power extends to the granting of insurance cover to individuals and companies or the refusal to grant such cover. These are very important powers. We have seen the way insurance companies can charge different premiums, they can vary between £200 and £800 to £1,000.

The manner in which premiums are assessed should be examined very carefully. The premiums being charged by insurance companies at present are excessive and these companies cite the level of awards granted by courts to justify such excessive premiums. The insurance companies stated in the past that juries were making excessive awards. A highly sophisticated campaign developed to abolish juries. The carrot used by the insurance companies at that time was that the cost of premiums would be reduced by between 50 and 70 per cent. Juries were composed of ordinary citizens who went to the Four Courts and other courts. They travelled in their own cars and paid insurance and were charged with the responsibility of assessing and awarding damages. Most jurors did so under a sense of public duty. This responsibility was taken from them and awards are now being made by judges alone.

The new approach being adopted by the insurance lobby is that courts established under our Constitution are paying excessive awards which appear to be unjustified, unreasonable and out of line with what should be paid, in other words, our judges are out of touch and are not making correct awards, they are not suitable people to be making such awards. It is serious that such a view should be emanating from the insurance lobby and from people who may have an interest in such matters. Discretion should be given to the judges, who preside in courts established by our Constitution.

I have very serious reservations about, and am strongly opposed to, recent suggestions that we should remove cases involving personal injury and accident from our courts. The implementation of this suggestion would mean that an innocent person who is injured as a result of the negligent action of a third party would be denied the right of access to the courts to seek to have the level of compensation to which that person is entitled assessed. This would be very wrong. A person must be allowed access to courts and judges.

In this House we must consider carefully the rights of ordinary citizens and ensure they are fairly and properly compensated for injuries suffered. A judge listens to all the evidence, evaluates it and then decides on the level of the award to be paid to the individual who has suffered injuries. Many people are not happy with these decisions.

In order to reduce the cost of insurance premiums it is now proposed to penalise the victim. The injured party is the person who will be affected by these proposed changes if the insurance lobby gets its way. Surely the victim should not be further penalised? Senator Quinn referred to injuries such as whiplash. I had experience of a back injury but I did not claim against anybody, I think I sustained the injury when playing golf. I experienced extreme pain and suffering at the time but luckily I recovered. Many people who make justifiable claims are frequently regarded in a poor light. They suffer odium when bringing claims and it is often assumed that they are feigning injuries but in most cases they are not.

I wish to make a number of suggestions. The insurance industry should not seek to penalise the easiest target, which is the injured party. Many people are feigning injuries and insurance companies are hiring private investigators to follow them. Statistical information is now available on computers which make it possible to trace individuals who have had a number of accidents and are bringing claims. Also, if a person has had an injury some years earlier, information on this injury is on file for the insurance company. If it is not available, it can be obtained by a motion of discovery. This would be a step in the right direction for the insurance companies to take.

I wish to make a few suggestions. A number of issues need to be examined. Our roads are the cause of many accidents. We need improvements in our roads, driving standards, the repair and maintenance of vehicles and, most importantly, the efficiency of our courts.

I wish to refer to some of the changes which have been made by the Government and in doing so I am not making political points. The medical expenses of medical card holders and those paying PRSI who are involved in motor accidents were, until now, paid by the State. They are now paid by the insurance companies. Many changes need to be made. The Minister compared the number of accidents in the UK to the number in this country. A report by Coopers and Lybrand shows that while the rate of accidents per 1,000 vehicles each year is about the same in both countries, the percentage of accidents giving rise to personal injury claims is five times higher in the Republic of Ireland than in the UK. The number of fatalities is 2.5 times higher. Thus, road accidents are more serious in Ireland although I do not know the reason.

A person suffering injuries in Ireland has to pay hospital and medical expenses. In Britain to a large extent those are met by the State. It is difficult to make comparisons. I would be happy at some stage in the future to discuss this matter. I represent the victim, the person unable to speak for him or herself. That is the person we have a duty to protect.

Mr. Mooney

Like all Members of this House I welcome the initiative of Senator Quinn in bringing this motion before us. My main interest is in the high cost of public liability insurance as it affects small communities. Last week I sat on a committee in my home town who through their own efforts had acquired a community centre at considerable cost. They wished to pay off the substantial overdraft by organising dances and discos. Astonishingly, when they approached an insurance company for a quote for organising the dance they were given a figure of £400 for the evening. This is an outrageous sum of money by any standards and the insurance situation is the same all over the country.

The solution is unclear but the Government has a responsibility to open avenues of negotiation with the insurance industry. The main topic of the Minister's speech was motor claims and the high cost of motor insurance. However the cost of public liability insurance has exceeded the wildest imaginings of some years ago. Why are these costs so high in Ireland? The Minister said a number of surveys were carried out on the available statistics on the effects of high costs. No survey has yet been carried out to discover why our nation has become increasingly litigious in recent years.

Why is there such a high proportion of motor injury claims? I appreciate what Senator Enright said about victims. It is always possible to generalise about people but some injuries seem to become "flavour of the month". For a long time whiplash has been popular and it is extremely difficult to prove, like back injuries.

Mr. Enright

It is also difficult to endure.

Mr. Mooney

I am not suggesting people who pursue claims through courts do not suffer from whiplash but it seems incredible that it is so widespread. I can speak from experience in that I was the unfortunate victim of a road accident ten years ago. I pursued a civil claim which eventually came to court three years after the accident. This also appears to be part of the difficulty because in assessing the loss to me that period of delay was taken into consideration. Therefore, the figure rose each year. Why is there no facility for civil damage claims to come before the courts more quickly?

On the evening of the first day of my hearing, the gap between my legal representatives and those of the insurance company was not significant. However the legal representatives of the insurance company insisted on going to court the following day. The legal people did well but put an increased cost on the claim which was shamefully far in excess of the gap between the two sides. As the Minister has correctly pointed out, the consumer is the person who loses.

I suggest the insurance industry and the legal profession look at this problem. Senator Enright and Senator Gallagher are members of the legal profession but I speak as a consumer. Lawyers and insurance companies should consider the mote in their own eyes on occasion rather than quoting statistics about our high rate of insurance claims.

There may be an economic reason for the problem. People find it increasingly difficult to make ends meet and may see a civil action as a way out of financial difficulties. Strange ideas to solve this problem have been offered. Some years ago there was lobbying to abolish juries. It was said all claims would be reduced and insurance premiums would decrease. All one has to do is read the Minister's speech. The effect of the abolition of juries is outlined for all to see. Prices rose and continue to rise. I can appreciate the Minister's difficulty. How can a Government legislate to place a limit on a person's misfortune? Nonetheless the nettle must be grasped.

I rail against the cost of public liability insurance. It is obscene that voluntary organisations have to pay high and spiralling costs for public liability insurance when they attempt to enhance their communities. They are trapped at every turn by the insurance companies who I see as money eating giants with voracious and unceasing appetites. My local committee was charged £400 last week, next month it will probably be £500.

In some defence of insurance companies, one of the reasons given for the high cost of premiums was the consumption of alcohol. The community centre which ran various sporting and leisure activities was given a quote within the means of the committee. It was only when an extension of the policy was sought to cover dances and discos that the insurance company gave the higher figure, citing alcohol as a contributory factor. Why is this so important? Is it because people who become inebriated are more likely to stumble and fall and make a litigious claim?

As someone who was involved in the hotel industry, I support Senator Enright's point about vexatious litigants. People may not deliberately go out to find cause for a claim but may at some stage see an opportunity to make a claim. A pool of water or of spilt beer may cause a slip and a serious accident may be caused. By the time the case comes to court people may have limps.

A media report some months ago stated that a number of agencies in Dublin including Dublin Corporation, Dublin County Council and Bord Gáis Éireann decided to pool their information about vexatious litigants. This seems to have had some effect if one is to believe subsequent reports of legal cases that have been dismissed because this information was made available. A month ago one case involved a gang apparently arranging for people to fall at a Dublin Corporation street repair site. The individual charged had been witnessed asking people to walk up and down to make sure they fell in the right places. That case was thrown out of court. Perhaps the Minister has evidence of the wider implication of that act. Is there a gang or an organised crime syndicate operating in this country who see litigation as a means of financing their activities? If there is, I suggest that the agencies under the Minister's control, the local authorities and semi-State agencies, pool their resources in order to identify individuals who have been seen to pursue claims on a regular basis through the courts. I understand this is happening to some degree in Dublin and the Minister might pursue that line of inquiry as another way of helping to reduce in some small way the high cost of insurance.

I am delighted this motion has come before the House. I am equally pleased that the Minister is addressing it in her usual efficient fashion and I look forward to seeing a reduction in insurance premiums at some future date.

Mr. Dardis

My party supports the motion. I do not see the need for an amendment and while I appreciate that Senator Quinn has no difficulty with the amendment, I do not see that there was any difficulty with the motion in the first place.

There is a saying in insurance circles that the client is insured for everything except what they claim for. There is a certain degree of truth in that. We must strive for a balance. We must protect people who are seriously injured through no fault of their own, whose livelihood or lives may be disrupted, and ensure that they do not suffer as a consequence of what has happened to them. Against that we have reached the point where there are claims which are fraudulent or of questionable origin. The difficulty which society and the Government have lies in trying to balance those needs and responsibilities.

I do not agree with Senator Quinn's statement that this issue has more to do with society than with government. We could argue about the extent to which government is society, and to what extent society is government, but the Government has responsibilities in that area. It was by fulfilling its original responsibilities as a caring Government and society that we found ourselves in some of our present difficulties. The Government, rightly, attempted to protect citizens when they were injured in certain circumstances. I agree with Senator Mooney when he said we have now reached the point where voluntary organisations, trying to improve their local community and their society, are required to pay such a high level of insurance that they frequently throw in the towel. If a field day or an outdoor event is organised for charitable purposes, the first difficulty to be dealt with is the cost of insurance. I am a trustee of two sporting organisations and each year, I go to the annual general meeting and ask one question, and that is, whether the organisation is insured for third party liability. In one instance I had to ask to see the policy because, in the event of a claim and if the sporting organisation does not have a policy, the trustees are liable in law.

There was a famous case in Offaly several years ago, where there was an incident in a community hall and the organisation did not carry the insurance but the trustees, local business people and farmers, were held personally liable. Such a situation should not be allowed happen. If these individuals were directors of a company they would have limited liability, but because they were trying to help the organisations in their community, they were held to be personally liable. That needs to be looked at. While I take the point that there is a need to improve the way society looks at making claims, I also believe that Governments have a responsibility to ensure that the playing field is a level one. I hope we do not have an amnesty on claims as well as an amnesty on foreign money.

We have also reached the point where certain members of the legal profession have gained a reputation, whether warranted or unwarranted, for being very conscious of claims. I can cite personal experience in this regard. I was involved in a car accident, through no fault of my own. I telephoned a solicitor who asked me whether I was all right. I said I was. He asked again whether I was all right, and again I told him I was. He asked me a third time and I assured him that I had not been injured. Several months later I met a colleague of his in practice in the South. This legal practitioner had heard I had been in an accident and asked me whether I had been injured. I told him that I had not, and we went through the same story again. I pointed out to him that I had had a bad neck since I fell out of the apple tree as a child, and he said that made it a case of aggravated injury, for which a claimant could claim a higher level of damages.

In my local town there is a publican who runs a good business, and runs it well. Somebody coming from the upstairs lounge fell down the stairs and claimed damages. Fortunately for the other businesses in the town, my publican friend put a detective on the case for a fortnight, and at the end of that time the person who could not walk the day after the accident was playing football. This shows that a certain number of claims are fraudulent. We must be vigilant and the Government must ensure that measures are taken to stop this practice.

The Minister spoke of mandatory disqualification of people who drive uninsured cars, and this should be done, but there are many people disqualified for driving who are still driving. It is necessary to do more than introduce a law to disqualify people. It is necessary to be vigilant, to ensure that, once disqualified, these people do not drive again.

I support the Minister's views that uninsured vehicles should be impounded or seized. As to whether these claims should be heard by judges alone or by juries, my view is that there should be a tribunal. I use the word with a certain degree of reluctance. There should be a non-judicial way of dealing with these cases. New Zealand uses tribunals for these claims, and I know the system works extremely well, that it disposes of cases quickly and there is always recourse to the courts, if people wish, as an appeal system.

The introduction of this system in Ireland would release the courts from much of their present work and would also mean that insurance companies would not be so eager to settle immediately. The level at which a claim is pitched has been brought to a fine art. If it is pitched at a certain level, the insurance company knows that to go to court will cost them more, whether they win or lose, so the case is settled out of court. This aspect of insurance claims also needs to be looked at.

Several references have been made to the fact that by international standards our claims are very high. I wonder how awards can be so high if our incomes are relatively low and our hospital charges are not high by English and American standards? As Senator Mooney said, insurance companies do not make mistakes; they work on an actuarial basis and meet their costs and make profits from the charges they impose on their clients.

I am a member of the board of management of a school — Senator O'Toole may wish to return to this matter — and we cannot have activities outside of school hours or make the school available to the local community. Children in the national school want to learn the violin after school hours and the board has a serious difficulty about insurance. We have the choice of going to our broker and inquiring about taking out an additional policy. School premises, however, should be of use to the community.

Circumstances should be defined in which people accept their own liability for entering land, public buildings or, for example, a field day run by a local community. If someone at a funfair is hit by a dodgem they may have a claim, but if they fall over themselves going in they should not. We must in some way be responsible for the actions we take.

I could speak at length about how the prospect of litigation affects farmers, although, it has been dealt with in other debates. The people who come to fish in the Liffey around my farm are fully covered by both my personal liability insurance and more importantly by the angling club's insurance if they are members. If I had no personal liability insurance I would be liable if a poacher met with an accident. The angling club of which responsible anglers are members, is forced to take out insurance while a poacher could sue me as the landowner. That makes no sense at all.

If people cross farmland to visit State monuments or to fish in rivers they should accept a certain degree of liability. If my tractor is parked by the side of the river and an angler falls over the plough they may be justified in suing, but if they fall into the river in the absence of any tractor it should be their own responsibility.

Ms Gallagher

I welcome this belated opportunity to contribute to this debate on the related issues of civil litigation and insurance. I should also remind Senator Mooney that I, too, represent the Government. Perhaps, he was keeping the best wine for the last in the order of speakers for this debate.

I am pleased that this debate has been beneficial to all concerned and that we all appear to agree on the matter. I face the problem of insurance from both sides of the coin — as a solicitor acting for the claimant in one case and for the defendant in the next. I also face the problem personally, albeit in a mundane way, in trying to get motor insurance. I thought when one reached the golden age of 25 one was supposed to get cheaper insurance. Last year I reached that age and was told the age for cheaper insurance is now 27 years. I am beginning to think I will never get cheap insurance and I have real difficulty in getting cover. I was refused by several insurance companies yesterday and I now feel like a criminal. Any insurance companies listening might give me a call tomorrow to console me.

However, insurance cover is a serious matter which affects many people at different levels. Insurance is an essential commodity and, therefore, has to be addressed properly. I am told there are a number of reasons for the high cost of motor insurance. The 1992 Coopers and Lybrand report, referred to earlier, on the costs and cover of private motor insurance in the Republic and in the UK identified three areas of difficulty. We have a higher accident rate, we have a greater preponderance of personal injuries claims and the Irish courts make higher awards.

It is obvious that if we are serious about bringing our insurance costs into line with the rest of Europe we have to look at the level of awards granted in personal injuries cases. I understand the average awards in Ireland are almost 50 per cent higher than in the UK and over 70 per cent higher than the EC average — and I am sure the Minister of State's department is well aware of that. It was mentioned in a different context that the report also found that the average claim cost for personal injury was almost four times greater in Ireland than in the UK.

A few years ago I used to laugh at people in the United States for being so claims conscious. Irish people are now the highest claimants in Europe. It is time we looked at our system and dealt with the reasons for this in a fair way to all concerned.

Several references have been made to the legal profession. Obviously, solicitors are not advertising to take personal injury claims predominantly. In my experience, the average citizen is well aware of his or her rights and has already estimated the cost of a claim when they come into my office. Solicitors are obliged to accept their instructions in that regard.

People who have suffered injuries must be fully and properly compensated. They incur medical costs, hospitalisation costs, loss of earnings and will incur other future costs. However, compensation for pain and suffering awards vary extensively and I often question their fairness. Often, people with genuine claims who have suffered greatly do not appear to be adequately compensated and continue to suffer pain through no fault of their own. On the other hand one often sees awards made which, at least on the face of it, appear grossly excessive.

The Minister of State at the Department of Enterprise and Employment, Deputy Brennan, recently announced his intention to review the present court awards system and that is welcome. It is suggested that insurance premiums will not be reduced until awards are capped for pain and suffering in such cases. The matter is wider than that, however, and I urge the Minister of State to review the way in which insurance companies themselves operate. Insurance is a necessity for many people, yet, there is no legal obligation on insurance companies to give quotations to individuals of organisations — something must be done about this. Even in difficult times financially the insurance companies appear to make a profit and that is because we, the insured, are paying for it.

I also have a personal complaint — and I ask the Minister of State to address it in regard to the way insurance companies complicate matters. The small print means that people cannot find out what they are, or are not, covered for and in most cases it is too late when they do find out.

Mrs. O'Rourke

I am on the warpath against all that.

Ms Gallagher

It would be a great help. The Spring Show in the RDS suffered the brunt of the cost of insurance but it has had a domino effect in rural communities. I have received representation on many occasions and in particular this year from voluntary groups and organisations who run agricultural shows each year in small towns throughout the country. They are facing enormous problems this year regarding insurance and it was highlighted in the farming supplement to the Irish Independent of 1 June 1993. It said that last year's total premium, all paid through the Irish Shows Association, is understood to have been around £42,000 but this year it is £94,000 and that many show committees are aggrieved that their premiums have been increased by as much as 400 per cent. These are voluntary committees who are trying to provide a service to a rural community which is more than appreciated by the local people but it is impossible for these committees to raise the finance to cover current insurance premiums. They have been refused by all the insurance companies in Ireland and I understand are now being insured by a Dutch company. That is a disgrace and it must be examined. The people involved in Castleblaney and Virginia in County Cavan and Tydavnet in County Monaghan face enormous problems in their effort to run the shows this year. This is a direct result of the problem of insurance.

It is not just major industrial businesses that are affected by insurance costs; it impinges also on voluntary groups and groups organised for the benefit of the community. These groups are run by hard-working and dedicated individuals and it is a disgrace they are asked to find so much money to cover the cost of insurance. It is deterring many people from doing constructive work in small communities. I wholeheartedly agree with what Senator Dardis said with regard to schools. It is a practical problem and one faced by everybody throughout the country and it is time we dealt with it.

The problems faced by local authorities regarding public liability claims were referred to earlier. A person has to be very careful when travelling in County Cavan and County Monaghan as the roads are in such an appalling state. We should deal with the root cause of the problems and deal with the insurance afterwards. It is sad that the high level of premiums are impeding many worthwhile activities in Ireland and making them impossible in many cases. The fear of huge claims is a real one. We all suffer as a result of it, either directly in paying insurance or indirectly because our local authorities, which we must fund, have to find the cost of covering the large number of claims for accidents that seem to occur all too frequently in Ireland.

We also need to introduce legislation to deal with the way insurance companies operate and the way they seem to take a high-handed approach. As was mentioned earlier, there seems to be no agreement as to what they can and cannot do. One can contact one company and be refused out of hand and another company seems to think that one's circumstances are quite reasonable. There is no rhyme or reason to the way in which they deal with people who are genuinely seeking cover. I hope the Minister will address the problem faced by individuals involved in agricultural shows and in other voluntary activities as soon as possible because it demands attention. I trust the Minister will grasp the nettle, as she said earlier, and make this a matter of priority not only for investigation but also for legislation.

Mr. Naughten

It is my privilege to support the motion put forward in the names of Senators Quinn and Henry. There appears to be unanimity in the House on the problems Irish people face getting insurance today. There are four reasons I believe that insurance here is far higher than in most other European countries. Senator Gallager referred to the condition of our roads which is a major contributing factor to accidents. The cost of repairs and of parts is also a factor and, as we all know, unfortunately once it is known that an insurance claim is involved the cost immediately goes up by 100 per cent. Of course new parts are supposed to be used, whether they are or not, and that is how the cost of the job is calculated. Thirdly, there are large medical expenses and, as with the car repairs, if one is unfortunate enough to go into hospital knowing that it is an insurance case and that there is going to be compensation one's bill is loaded accordingly by the public hospitals. That is a matter of public record. Finally, another major cost is the legal fees, with all the problems outlined by Senator Mooney earlier.

We, as a people, and the Government will have to challenge the insurance companies because the cost of insurance is prohibitive for many small industries, particularly those involved in heavy engineering. Public liability insurance and insurance for employees places a large financial burden on that type of industry.

The area of car insurance should also be examined. As Senator Gallagher rightly pointed out, we were all led to believe that once one was over 25, there would be a reduction in insurance but, from dealing with clients for whom I am trying to organise insurance, I know this is not the situation. There are many other difficulties when one tries to get insurance. One company will quote at a loaded rate while another company will not even consider offering insurance, It is a Catch-22 situation. I share fully the view expressed by Senator Enright earlier, and I think every Member who contributed to the debate has said very much the same thing, that where there are genuine injuries nobody is questioning the right of a person to be compensated for loss of earnings, pain and injury and perhaps permanent damage for the rest of their lives. However, I think, many insurance companies are opting out. Senator Dardis rightly pointed out the case where a detective was employed to check to see if a worker was injured and he was found to be playing football. There are many cases that are settled out of court for fairly sizeable sums. I was in that situation myself where my own insurance company settled a case, which I was stunned to discover they had settled. I was also stunned to find out they had paid £15,500 to somebody who had no injuries at all. I would have gone to any court in Ireland to defend the case and I told the insurance company that, but instead they had the nerve to pay out over £15,000 to a person who was not injured in any way, good, bad or indifferent. My insurance doubled as a result; in fact, I eventually ended up paying for it. When I questioned them they said it was the cheapest way out.

Voluntary bodies who are doing excellent work throughout rural communities are at a major disadvantage; if they want to run a fund-raising function or other activities they face enormous problems because of public liability. If I pay into a function and I am injured inside, having gone in of my own free will, I fail to understand how I could be in a position to sue that committee. A person can claim compensation just because they walk into somebody's property and slip, perhaps in some cases it is more by design than accident. The law is crazy and it should certainly be examined.

Senator Dardis mentioned trespass on land. If a member of a gun club or an angling club comes on to my land — I have lands adjacent to the Shannon — as long as they are a member of a club, there is no difficulty as they are covered by insurance, whether it is the gun club, the angling club or any other body but if they are trespassing I could be held liable. I think it is crazy that if somebody enters my land without my invitation and slips climbing over a wall, I could be found liable. It is another area which should be dealt with.

We pay lip service to the development of our tourist industry, but development, earning potential and so on, have been hindered by our liability laws. The Cathaoirleach and the Minister of State will be aware of the magnificent ancient site at Rathcroghan where development is held up at present. It dates back to the days of Queen Maeve, and there is nothing similar in the rest of Europe. However, it cannot be developed because farmers are afraid to allow people to travel from one mound to another. There is a series of mounds over a 20 mile radius. It is one of the most historic sites in the country and it cannot be developed because people are afraid to allow people on their land.

There are certain steps the Government can take in area of medical costs. I do not see why, if somebody is hurt in an accident, the insurance company should have to pay the hospital charges. Those people are paying PRSI and taxes to provide a medical service and I do not see why they cannot avail of it.

I believe there is another area where the insurance companies are not facing up to their responsibilities, and that is the settlement of claims. There is no question that they take the soft option and the client must pay. I do not see why my insurance company should be allowed to pay out money in my name without consulting me and that is happening daily. They go for the soft option because they reckon it is cheaper than having to fight the case in court.

I support the motion which I think is timely. I hope the Minister of State and the Government take steps to reduce the high costs of insurance for car owners, particularly young people trying to get insurance. As the Minister said, sometimes the cost of insurance is prohibitive; it exceeds the cost of the car. I have two teenagers named on my car insurance and it is a huge additional cost.

I welcome the motion.

Mr. D. Kiely

I welcome the Minister of State to the House. I am glad we are debating this motion. I have spoken here about this matter when the Minister of State was present.

Mrs. O'Rourke

It was a year ago.

Mr. D. Kiely

The Minister is aware of the problems with all types of insurance. There can be difficulties where a father has his family named on his car insurance policy. I know of one such case where the insurance policy cost £750. When the father died, one of his children was quoted £1,800 car insurance. I think that is crazy. Insurance costs have escalated and people have gone insurance mad.

For a long time I have been interested in shooting and fishing and I have had to enter people's lands. I want to thank them for allowing this. If something happens to me on somebody's land, I cannot see why the landowner should be liable. Something will have to be done about that.

As an experienced businessman, I know that most business people cannot afford public liability insurance for their premises. The quotations range between £25,000 and £40,000, which may be ten or 15 times more than the rates they are paying, and they complain about paying water charges. These people are now operating out of uninsured premises and are taking the chance that nothing will happen to people who frequent their premises. If somebody breaks a leg on their premises and sues them, they could lose their business because they could not afford the insurance premium.

For the last 25 or 30 years I have worked on, and chaired, many festivals. I was the founder of the Ballybunion Bachelor Festival and many other festivals in Kerry. Many important people came to them. I was the director of that festival for seven years and every year I made money to build swings, chutes, roundabouts and so on in a local park, which is now closed. I spent many years organising that for the families who came to Ballybunion.

Mr. Dardis

What the Senator lost on the swings he lost on the roundabouts.

Mr. D. Kiely

That is right. The park is closed because the local authority could not afford the insurance. This is where things have gone wrong and something must be done about it. If a person commits a crime in somebody's home or backyard, or falls through a window and gets hurt in an attempt to break into somebody's home, he can sue the home owner and their insurance company has to pay. That is wrong and something will have to be done about it.

I am quite critical of lawyers who look for any excuse to take a case. If a person has no money, these lawyers say they will fight the case on a no foal, no fee basis. Such people must be questioned. In my county legal people are taking on cases against the local authority. Last year Kerry County Council, paid in the region of £300,000 in cases where people tripped over their shoe laces or fell into potholes that were not there. The local authority is responsible for the first £5,000; this is wrong. In Kerry County Council we are fighting these people and winning. I know a case where a woman was injured outside a premises. She then went into the chip shop and alleged she had been injured inside the shop. The owners, who have worked hard to make a living, were then faced with a claim which the insurance company settled.

This kind of activity must be stopped. While I will support any person who suffers a genuine injury which impedes their life, I condemn those who allege injuries that are fraudulent, for example the individual who throws out a fishing line and then claims whiplash.

It is now impossible to organise rural events such as regattas and sports days. As a promoter of such events for 25 to 30 years, I can confirm that the fear of litigation is preventing the running of these events. For example, in a case in which I was involved in Listowel 15 years age, a youngster picked up a flare a week after the festival and burned his finger. The festival committee was sued.

A consequence of this situation is that festivals will take place elsewhere, for example in Munich, but not in this country as the local communities will be unable to organise them. This cannot be allowed to continue and I appeal to the Minister to give serious consideration to the situation.

Regarding the cost of motor insurance, young people are heavily penalised as a Senator pointed out earlier in the House. The threshold age for cheaper premiums is steadily increasing from 25 years to over 30 years. At the other end of the scale people over 65 years of age are penalised. It is getting to the stage where reasonable insurance will be available between the ages of 40 and 50 years only.

A scale of awards depending on the type and severity of injury should be established and steps taken to ensure that abuse of the system is not allowed to continue.

Mr. Norris

May I share my time with Senator O'Toole?

Acting Chairman (Mr. Fitzgerald)

Is that agreed? Agreed.

Mr. Norris

I welcome the fact that the motion before the House today is an agreed motion and that the amendment by the Government has been accepted by the proposers of the motion from the Opposition.

Insurance is an actuarial calculation of a financial risk. Insurance companies want to protect themselves and make a profit and this must be taken into account.

Problems arise in motor insurance, particularly with uninsured drivers. Uninsured driving is appallingly irresponsible and should be severely penalised as there is always the risk that a driver will cause serious and possibly fatal damage to others. Drivers who are not insured are abrogating their responsibility.

There is a problem with young drivers who are heavily penalised when they seek insurance. During the last year there was a large protest by motor cyclists, not all of them young, against the additional loadings placed on them. These problems should be examined in the context of actuarial risk to ascertain if companies are exploiting a perceived risk which may not reflect economic realities. If the risk exists in actuarial terms then it has to be accepted that insurance companies must survive and make profit.

Rates of insurance are abnormally high in this country. The Minister has confirmed that rates are over 2.2 times higher here than in the UK and Europe. Members have spoken about the difficulties this causes for organisers of local events and so on. However, if the loss statistics are correct what alternative is available to insurers? One option is to close amenities and regretfully, amenities such as swimming pools and community halls are closed to the public because of the enormous cost of insurance premiums.

Regarding the settlement of personal injuries, I slipped recently on exiting a shop on a wet day. The floor was tiled with a mat resting on top but the mat slipped from under me and I fell. Undoubtedly I could have sustained a claim in court. I did not consider this to be an honourable course of action as I was not seriously injured. However, I did advise the shop to rectify the situation as an older person could fall with more serious consequences.

If premises like the shop in the above example have insurance, and not all of them do, it usually means that premiums increase dramatically subsequent to a claim. Perhaps the Minister should consider this and undertake a study on the impact on premiums of making a claim. I believe it to be unfair that payments may be made for up to 30 years to an insurance company and that as soon as a claim is made——

Mr. O'Toole

In the last month I had to intervene in the running of the largest childrens' sports event in Europe, the Cork City Sports. These were on the point of being cancelled a week before commencement date due to insurance difficulties but fortunately with the help of the GAA the problem was resolved. However, I fully sympathise with the points made by Senators who have been involved in festivals and various sporting events throughout the country.

As the Minister is aware, between one third and one half of the total capitation grant to primary schools is expended on insurance for schools. This illustrates the way in which facilities to pupils are being eroded. Not a week goes by without my receiving some claim for negligence against a school, its board of management, teachers and so on.

It appears to be a national pastime to bring professional people to court. It is now time to convince people that accidents arise. Time and again parents are misled by unscrupulous professional people, a tiny minority of solicitors, who are prepared to take cases on the basis of no fault, no fee with the fee set at a percentage of the reward if successful.

This is a disgraceful activity. I have been in court when judges have said to solicitors that parents have the right, necessity and responsibility to take cases on behalf of children involved in an accident. However, they go on to say that solicitors should not waste the time of court on cases that are not viable.

Insurers, too, often settle claims on the basis that it is easier to settle than to go to court. I have pleaded with them on this issue and on two occasions the INTO offered to pay the total costs to be allowed to fight a case which the organisation believes would have given a headline for other similar cases. It is a problem time and again where the insurance assessors say a case can be settled for £10,000 although it would take £20,000 to win it in court, but it gives a headline to everybody else.

Dr. Henry

I thank the Minister of State for her response as well as all the Senators who participated in this debate. Listening to everyone I can see what passion this issue arouses and I am glad Senator Quinn and I moved the motion. The situation is obviously serious since it involves so many areas. Senator Quinn raised this matter with me first because of problems he saw with increased insurance costs for business. I raised the matter because of the increased claims I saw, the serious lack of care and the number of accidents that occur. Senators from both sides have approached the debate from different angles. The most important thing to stress is that no one is trying to deprive a genuine victim of his rights. A large award of over £2 million was granted in the courts recently to a young man who is now 24 years of age but was brain damaged as a child. No money will ever compensate that person's mother for the last 24 years or help her son. In really serious cases money does not compensate at all. It is quite plain that no one is trying do deprive a genuine victim of his rights.

There is a fair number of vexatious and fraudlent claims coming before the courts, and that is a problem. One does not have do very much research in this area because such cases appear regularly in the newspapers. I spoke earlier of the solicitor who was advised of a third bogus case he had brought before the court and he feared being reported to the Incorporated Law Society. The judge said that the man who brought the claim had been involved in bringing eight claims for accidents since 1987 and had settled for a total of £12,000. This person is either very unfortunate or not very careful. Several Senators suggested that as we are now in the computer age we would need to have a spy in the sky watching for people who were making multi-claims because it is these situations that cause many problems.

Various public bodies, like the corporations and CIE, reckon that between one-quarter and one-half of the claims against them are vexatious or fraudulent. It is not just the fact that these people do not get money eventually — they do because often these cases are settled just to get rid of the problem — but there are incredible legal costs and a great deal of time is spent on such cases. One man told me that instead of managing a corporation he felt he was spending 70 per cent of his time acting as a solicitor's clerk trying to deal with claims.

Cases which could be defended are often settled to avoid high legal costs, and our legal costs are very high. Very little effort is made by the legal profession to get people to settle. In England, getting medical cases involving personal injury settled out of court — and not on the steps of the court which, as one Senator pointed out, is another day's legal costs — is greatly helped by the fact that there is mutual disclosure of expert witnesses' reports. This means that instead of playing what is called here, blind man's bluff, you have to disclose your expert witnesses' reports to the other side. This means each side can, if the case is likely to be decided in their favour, decide whether to continue with the action or settle for whatever is being offered.

The situation regarding public liability is an appalling problem. An enormous number of events will not be held because of the cost of insurance. It is important to remember that insurance companies do not mind if you do not insure with them. It is not worth their while to take on this insurance because the claims against them are so high.

I am delighted the Minister of State said she was going to provide more money and scope for the National Safety Authority because the prevention of accidents is very important. Very little training, if any, is provided in this country although a large number of accidents occur within the first few weeks of a person being in the job. No consideration is given to teaching people about the dangers in certain jobs. I hope this provision is enforced soon and that we will see from company reports that the finance provided for training and safety measures was money well spent. We need safety representatives elected in factories and other workplaces.

A ministerial group is currently looking into the cost of motor insurance. Our roads are the cause of serious accidents. I am sorry we have sought derogation from vehicle testing for so long because there are too many cars on the roads that are not roadworthy. One often finds that when victims with serious injuries come into hospital they have been travelling in defective cars. People involved in accidents in well maintained cars are often not so badly injured. It is important that we look again at the possibility of introducing vehicle testing.

The Minister of State is right about impounding uninsured cars, banning uninsured drivers and making sure they do not continue to drive. I fine it extraordinary that a car owner is liable for injuries caused to people even if their car has been stolen. It seems incredible that if your car is stolen you can still be found liable for a traffic accident. Insurance companies should be questioned about that, because I cannot see the sense in it.

Many public bodies — such as CIE and Dublin Corporation — are not carrying public liability insurance. They are paying the claims against them, and that concerns all of us. In 1989 Dublin Corporation paid out £2 million in claims and in 1992 it paid out £6 million. I acknowledge that the corporation should not leave barrels on the road but the condition of the footpaths and roads in Dublin did not deteriorate between 1989 and 1992 to the extent that the cost of claims could increase so much. At present Dublin Corporation has on its books 2,000 outstanding claims totalling £27 million. What could we do with that £27 million if we had it? What could we do with the £14 million from the health service, if we had it? A most aggressive attitude has to be taken towards the prevention of accidents, reducing claims and their cost on this society.

Mrs. O'Rourke

I thank Senators for what was a most stimulating debate and a realisation by all of us that the time has come for action.

Amendment agreed to.

Motion, as amended, agreed to.

Acting Chairman

When is it proposed to sit again?.

Mr. Mullooly

It is proposed to sit tomorrow at 10.30 a.m.