That Seanad Éireann exhorts the Government to take effective steps to counter the compensation culture which is seriously damaging employment, economic activity and the capacity of Local Authorities and Voluntary Bodies to discharge their duties and, in particular, to bring forward effective proposals:
(1) to discourage fraudulent claims;
(2) to provide for more realistic duties of care for landowners, employers and owners of premises in respect of liability to the public and employees;
(3) to safeguard defendants from nuisance and trivial claims; and
(4) to provide a framework for the calculation of damages.
Ireland has received many plaudits in recent times for its rapid economic growth and the decade of cohesive social partnership which has helped to achieve that growth. As we move relentlessly towards an income per capita that surpasses many of our fellow member states in the European Union, and the problems that will bring, there is every reason for us to be proud of our performance as a small open economy on the periphery of Europe. There is one record, however, which I, and no doubt all Senators, would prefer was not ours, that civil actions for injury account for the largest number of claims and the highest settlement figures in Europe. We are in a league of our own when it comes to claims. The so-called compensation culture is alive and well. It is bleeding local authorities, businesses, voluntary organisations and taxpayers dry.
Invariably, the first item on the agenda of annual general meetings and estimate meetings of local authorities is the question of public liability insurance costs. The normal cut and thrust of public administration and community activity is infected with the malaise which shows no sign of abating. Only last week we were treated to the latest manifestation of this culture — a man, who admittedly suffered horrific injuries in a car crash, received an out of court settlement of £100,000 having sued two publicans in County Cork for contributing to his accident. Such a settlement could spawn hundreds of others. Who knows what encouragement it may give to others of a compensatory state of mind in due course?
The blame game has become endemic in our society. In some quarters, taking responsibility for one's own actions is fast becoming a thing of the past. Ireland may have the second lowest number of work place accidents in Europe, but employers here face the highest rate of insurance claims, totalling £400 million a year. In the United Kingdom, 44 per cent more accidents are recorded in the workplace, but figures show that Irish workers are twice as likely to claim compensation as their UK counterparts. The average claim in Ireland is almost two and a half times higher than in the United Kingdom. Average claim costs per employee here are £116, while the UK figure is £32. A sample survey of insurance costs carried out by IBEC showed that costs for small Irish enterprises were three times higher than in the United Kingdom, twice as high as those in Denmark and seven times as high as the Netherlands. I concur with IBEC's view that a large proportion of the claims are exaggerated, opportunistic and spurious.
As we all know, the problem is rife within the local authorities on which we serve. The claims department of Dublin Corporation anticipates that it will have paid out £20 million in costs in the three year period up to the end of this year. While personal injury claims account for only 30 per cent of the number of claims made, the costs awarded generally amount to 60 or 70 per cent of what is paid out every year. This means that the cost of personal injury claims to Dublin Corporation over the last three years will be in the region of £15 million by the end of 1998.
It is worth noting that last year Dublin Corporation on occasion received no more than a week or ten days notice of court hearings, leaving little time for adequate and proper preparation. Ironically, this difficulty arose due to the appointment of extra judges, legislation passed by the Oireachtas in respect of that — which is to be welcomed — and a greater number of court sittings to deal with cases. This helped to clear a backlog of claims, but it did not bring any better news to Dublin Corporation concerning compensation costs.
In mentioning these statistics, I am not suggesting that all the claims were fraudulent. I have no doubt many of them were genuine. However, let us take the recent evidence presented by Irish Public Bodies Mutual Insurance Limited, the company which handles public liability insurance on behalf of councils and health boards. It is that company's belief that one in five claims have a fraudulent element. At any one time the company could be dealing with as many as 10,000 such actions. The most disturbing news is that, far from levelling off, the claims are increasing by 5 per cent per annum.
Let us also remind ourselves of some of the cases that have had a successful outcome for litigants and ask ourselves about their merit. In Sligo, a drunken cyclist who rode into a pothole as he tried to balance fish and chips on the handle bars of his bike won his claim against Sligo Corporation and was awarded approximately £5,000. In another case in the north-west, a man who, while drunk, went through the warning tapes surrounding road works and was injured, received approximately £12,000. In Donegal, a person has lodged a claim against the county council, most of which relates to emotional distress caused by the council trimming back a hedge. The recent controversy surrounding Army deafness cases has led to a surge of similar claims for industrial deafness. It seems a vast reservoir of original thinking is going into the search for new compensation possibilities. Plaintiffs are not acting in isolation.
Many lawyers are happy to steer them in the right direction, to outline to them the full vista of financial opportunity which a day in court can present. Medical practitioners are also playing their role, clearly co-conspirators in some cases. I note the observations of the former Attorney General, Mr. Harry Whelehan, earlier this year, that bogus plaintiffs are getting what he described as a "lift off" for bogus claims from medical practitioners. GPs were referring patients to specialists to get them out of their hair, and indeed these referrals may arise from the fear on the general practitioner's part that if they do not do so they may be sued themselves. Mr. Whelehan concluded that if there was wholesale abuse of personal injury claims, it was on the back of "bad practice by doctors operating in a semi-political sly way rather than squaring up to the client".
I welcome the initiative taken by the Government in banning solicitors from advertising for personal injury claims. That legislation is at present going through the House. The outlawing of advertising by solicitors in inappropriate locations such as doctors' surgeries is wholly welcome. The time has come to stop the rot once and for all. As Members of the Oireachtas we must seek to create new conditions in which the culture of compensation can no longer flourish. We can talk all day about the immorality of the situation and the lack of integrity and honesty which is so prevalent in this rush to claim that we have a duty to act decisively to ensure that it is brought to an end.
That is why my party, the Progressive Democrats Party, believes there is much merit in the establishment of a personal injury compensation board to cater for all claims of this nature. There are models in other countries which can be looked at. It would be quicker, more efficient and, most important, would represent better value to the taxpayer. Let us not forget that it is the taxpayer who ultimately pays the price for the compensation culture. Traditionally taxes have been collected to fund general services for the benefit of all. Increasingly in recent times they have become insurance premia to meet the multimillion pound flood of compensation claims. In the context of recent revelations about alleged corporate tax evasion, it is time to put the ordinary taxpayer first and put a stop to the gallop of those who are unscrupulously ripping off this State. With rights come attendant responsibilities, yet increasingly responsibilities are taking second place to people claiming and exercising their rights to an unwarranted degree.
There have been improvements in legislation. One example is landowners' liability. There is now a distinction between invitees and trespassers and the duty of care which is attendant upon landowners. There are rights and responsibilities and people must take personal responsibility for their actions.
In the case of Army deafness, new claims are arriving at a rate of 50 per week. There are now 13,600 claims outstanding. Of those, 1,900 have been settled with a bill of £54 million, £42 million of which went to the claimants while £12 million went in legal fees. One wonders about a system in which such a high proportion of the costs go to the legal profession. People who have legitimate claims are entitled to have them vindicated and dealt with but it can hardly be the case that all of the 13,600 claims which arise in the case of Army deafness are genuine claims which should be settled.