I welcome the Minister of State, Deputy Troy, who is my friend and a former colleague for many years in the parliamentary delegation to the Council of Europe, where he was highly respected. He made a big impact at the Council of Europe, as Senator Mullen will testify. We are not surprised by subsequent events.
Personal Injuries Assessment Board (Amendment) Bill 2022: Second Stage
I move: "That the Bill be now read a Second Time."
Cuirim fáilte roimh an Aire Stáit. I very much enjoyed the time he and I spent together on the parliamentary delegation to the Council of Europe. I understand he is not opposing this Bill. I commend him on his own proposal to introduce legislation on the Personal Injuries Assessment Board, PIAB. If the Government is minded in these more inclusive days to accord me the necessary Government time to get this small but significant Bill through the Seanad, I will have no objection to any amendment to change its Title to the Personal Injuries Resolution Board (Amendment) Bill. I wish my goodwill in respect of that idea to be noted at the outset.
To paraphrase a great writer, in the world of 2022, when misinformation seems to be rife, telling the truth can be almost a revolutionary act. It should not be so, however. Truthfulness and truth — be it legal, scientific, historical or moral — should be at the core of our laws and politics and how we organise ourselves as a society. Unfortunately, there are many aspects of our law where we do not insist on the truth, for whatever reason. One example of this forms the backdrop to my Bill.
At present, the Personal Injuries Assessment Board Act 2003, as amended, does not contain any requirement that information given to the PIAB in the course of an application for, or the assessment of, a claim for an award for personal injuries should be truthful. No penalties exist for giving false or misleading information to PIAB.
As we know, PIAB was established almost two decades ago to ease pressure on the courts by allowing personal injuries claims to be dealt with and settled without recourse to litigation, thereby avoiding unnecessary legal costs and delays. A claimant can apply to PIAB for an assessment of his or her claim for damages. The respondent, which is usually, but not always, an insurance company, can consent to that assessment. PIAB then decides whether to make an award, and the parties can choose whether to accept it. Once it is accepted, it becomes legally enforceable.
If at any stage both parties do not consent to the assessment process or agree to the suggested award, PIAB grants authorisation for the claimant to issue court proceedings in the normal way. PIAB has certainly diverted tens of thousands of personal injuries claims from the courts in its time, but it is by no means a perfect system. The number of applications received by PIAB that are not resolved deserves some scrutiny.
On average, PIAB receives 31,000 applications each year. That number was down to about 26,000 in 2020. Many thousands of cases do not result in an award. Does that mean some of the applications are unmeritorious or possibly false? It almost certainly does but the problem is that we simply do not know the numbers because, at present, it is not an offence to give false information to PIAB. As a result, PIAB is not required to report to the Minister on any such cases of false information that it may encounter. However, we would be naive to think every single application was based on the truth and the whole truth. This is particularly the case given that there is no legal sanction of any kind in the 2003 Act for submitting false or misleading information to PIAB. Claimants can take a punt on submitting a false claim, and unscrupulous respondents can take a punt on submitting false information to repel a genuine claim, without any risk of sanction. It is like getting to put a chip on the roulette wheel without even having to buy it.
Is there a lacuna in the law? There most certainly is. When this issue was first brought to my attention last year, I must confess I was sceptical, believing there must surely be some kind of penalty for those who tell lies to PIAB. There is not. Ultimately, it is not against the law to tell lies, but we have many examples of where untruths are prohibited by law. The laws against perjury have existed in common law since time immemorial and have recently been codified in statute law. Other examples, more relevant to the non-judicial set-up that PIAB involves, are applications for social welfare payments under the Social Welfare Acts and statements made in returns and applications to the Revenue Commissioners under the Finance Acts, in respect of which applicants are clearly and repeatedly told they may be prosecuted if their applications are not truthful in all material respects. Applicants for the fair deal scheme under the Nursing Homes Support Scheme Act 2009 also face prosecution for any material untruths in their applications. If the use of false information in each of these circumstances attracts a serious criminal sanction, why should providing false information to PIAB not be treated in the same way?
In addition to enacting the Personal Injuries Assessment Board Act 2003, the Oireachtas enacted the Civil Liability and Courts Act 2004, which applies serious penalties for making false claims for personal injuries before the courts. When one thinks about it, one finds it remarkable that these cases do happen. In 2017, Zurich and the Motor Insurers' Bureau of Ireland, MIBI, exposed an organised fraud by a group that took out insurance policies just prior to staging accidents. The point, though, is that if false statements in the course of personal injuries litigation in the courts attract such serious penalties — they attract up to ten years in prison and a fine of up to €100,000 — surely the use of false information in a claim to PIAB, or in defence of a genuine claim, should attract at least some kind of penalty? It does not, however.
If, as we see in cases that arise and are reported every so often, people are willing to make false statements in court, putting themselves at risk of perjury charges, can we seriously believe no false information is being given to PIAB if it can be given without sanction?
The text of my Bill is quite straightforward. It is short and almost self-explanatory. Under the 2003 Act, there are three main circumstances in which a person might find himself or herself submitting information to PIAB: making an application; providing further information or documentation in response to PIAB; and submitting information as a third party, such as an expert, to enable PIAB to assess a claim. As the legislation stands, there is no penalty for submitting false information. My Bill amends each of the relevant sections to include an additional subsection whereby a claimant or any other person who "knowingly gives the Board information which is false or misleading in a material particular is guilty of an offence."
Taking from the existing provisions in the Act regarding such events as it provides for, mainly acts of PIAB personnel that might be criminal, we are talking about the imposition on summary conviction of a fine not exceeding €3,000, or imprisonment for a term not exceeding six months, or both. These penalties will apply to each of the three new offences created by my Bill.
It is important to note that the amendments in the Bill would prohibit a person from "knowingly" giving the board information that is false or misleading. The other enactments I have referred to, including the fair deal legislation, make it an offence for an applicant to "knowingly or recklessly" submit false information. Therefore, what am I doing in my Bill? Without getting too far into the reeds of the matter, I believe colleagues will be aware that there is an important distinction in criminal law between an act that is committed "knowingly" and one that is committed "recklessly". An act committed "knowingly" means just that — an act committed deliberately, with full knowledge and foresight. An act committed "recklessly" has a different legal meaning. In layman's terms, it can include actions that are just rash or careless.
Therefore, a test of recklessness creates a lower threshold to be met in order to get a conviction.
What this Bill aims to prevent is the deliberate use of false information, not information which might be submitted carelessly, rashly, naively or incorrectly. PIAB is intended to be a process which is engaged with by ordinary people without legal representation, even if in the great majority of cases solicitors are involved. Given the involvement of people who are sometimes not legally represented, I believe it would be wrong to include the lower threshold of recklessness because it might result in people being unfairly caught out for careless or inadvertent errors in their claims. To be caught by my legislation, one has to knowingly submit false information. What is needed is for people who deliberately submit false information to be held to account, and that is the reason the Bill has been drafted in this way.
It may well be the case that providing false information to PIAB could in certain circumstances, at least in theory, contravene section 6 of the Criminal Justice (Theft and Fraud Offences) Act 2001, which makes it an offence to "dishonestly, with the intention of making a gain for himself or herself or another, or of causing loss to another, by any deception induces another to do or refrain from doing an act...". If one intends to make a gain and one induces a person to do something or not do something by any deception, that is fraud. However, if this provision was in fact an effective tool against false information being submitted to PIAB, we would surely be aware of cases where prosecutions were brought. My office has not been able to find a single such case, and practitioners in this area to whom I have spoken are also not aware of any such cases.
Second, the provision I have just referred to would be of no use in the situation where knowingly false information is given but does not lead to a payment following a PIAB assessment. Third, false information by the respondents in PIAB claims may well not come under that section, since it might be a stretch to say that they are seeking to make a gain or cause a loss by submitting false information to defend a claim. They are just trying to prevent a loss to themselves in that situation. In other words, the legislation would not catch them for fraud. There may be situations where false statements are made at PIAB stage in an attempt to get a win there but later, when the case proceeds to court, the party mends its hand and does not repeat the false information there because of the perjury and other sanctions. In that situation, a person could get away scot-free as well.
Clearly, there is a lacuna in several situations and, quite possibly, even in situations where one might think the fraud legislation would apply, it is not workable. The 2001 Act, or the fraud legislation as I call it, therefore is a non-runner for dealing with a range of possible scenarios involving fraud, attempted or accomplished. The amendments proposed in my Bill bring about a clear and straightforward means of dealing with this problem, in that they prohibit knowingly false statements to PIAB under any of the scenarios I have outlined. The ultimate outcome of PIAB assessment, and therefore the issue of whether a gain or loss is caused by an award being made, becomes irrelevant.
I raised this in a Commencement matter in June 2021. The Minister of State at the Department of Justice, Deputy James Browne, told me there was no lacuna. He said that if we were to introduce what I was proposing, it would effectively turn PIAB into a quasi-judicial body. With the greatest of respect to him, expecting people to tell the truth in their dealings with PIAB does not turn PIAB into a quasi-judicial body, no more than expecting people to tell the truth in their dealings with the Department of Social Protection or the HSE would turn any of those bodies into quasi-judicial bodies. After all, neither PIAB nor any of those other bodies can impose sanctions on anyone for telling falsehoods. That responsibility rests with the Garda Síochána to investigate and ultimately the courts to decide.
There is a lacuna and this Bill proposes to close it. I do not pretend that PIAB is a perfect system. I know the Minister of State, Deputy Troy, is making an announcement today that he is getting permission from the Cabinet to develop and bring forward legislation, as I understand it, to give PIAB a role in mediation and in other matters that would strengthen and enhance its remit. That is very welcome. I believe he is also proposing that PIAB would have a role in co-operating with the Garda where information about fraud is made available to it. That is also welcome. What my Bill achieves, and what is not mentioned as I understand it from what I have read about his press release, is that it clearly creates an offence of knowingly providing false information. The fact that it does not exist at present is anomalous, having regard to the other examples I have given where it is an offence to supply false information knowingly, for example, in the social welfare context or to the Revenue Commissioners or in the nursing homes support scheme.
There are also questions about whether PIAB is aligned too much with respondents and the insurance industry. One will get a different account on that depending on who one talks to. PIAB's remit should surely be to assist genuine claimants to receive compensation they are entitled to outside of the court system. It is certainly not to assist insurers to resist claims. Any reduction in insurance premiums is welcome, and we should work hard for that, but that should only come through the elimination of fraud and the reduction of legal costs. Those are the issues we must examine closely. PIAB is not a quasi-judicial body; it assesses awards with the consent of both parties. It has no role in adjudicating on personal injuries claims. There have been calls for it to be given that power, but I am quite sceptical about that. Those calls sometimes come from business representative groups and we should scrutinise very carefully whose interests such a move would serve. We must keep the interests of ordinary people and genuine claimants at the forefront of this.
As I said earlier, truth has become something of a devalued currency in recent years. In spite of that, the vast majority of Irish people are honest. They would never dream of lying in any kind of application to a statutory body or in any other circumstance. When we can, we should always try to take people at their word. However, even that must have its limits, and that is why we have law. Applying to a statutory body seeking damages out of the pockets of fellow citizens, or seeking to avoid paying damages which are justly owed, simply has to be one of those situations. As they say in Russia, “Doveryay, no proveryay" - "Trust, but verify". Members might recall Ronald Reagan reminding Mikhail Gorbachev of that. In other words, we should take people at their word to the extent that we can, but we should have no fear about asking them to stand over their word, and no citizen should have any fear or complaint about being asked to do so. Telling the full truth to a body such as PIAB, on the basis of the facts as one has them, should never be portrayed or seen as, or felt to be, an intolerable burden.
I acknowledge that there are other lacunae in our law. It was also pointed out to me recently that the Judicial Council Act 2020 contains a similar lacuna to the one I am seeking to close today. With regard to the process for complaints against members of the Judiciary, there appears to be no penalty for including false information in such a complaint. I wonder why that is the case. Surely we should insist on truthfulness there too, especially when a person’s good name and professional reputation are at stake. I would have thought it would apply a fortiori that we should do so. I should also add, on a completely unrelated matter, that as the law stands only one third of all voters are asked to prove their identity with a photographic identity document at polling stations on election day. In this day and age, when photographic ID is required for the most mundane of reasons, especially in the last couple of years, is that acceptable? However, those are matters for another day and for other Bills.
The Oireachtas should have no reluctance about requiring people to tell the truth in their dealings with statutory bodies, and about having a system of enforcement in place that supports that fundamental concept. That applies all the more to any case where inaction could result in citizens having money taken out of their pockets through wrongful awards – with the resulting hikes in insurance premiums for all of us – or citizens having genuine awards denied them through deception and false statements being made.
For all those reasons, I ask the Minister of State to consider either incorporating this Bill in his legislation or, even better, joining me in asking the Government for the small amount of Government time it will take to get this small but significant and necessary Bill through the Seanad. I fear that the Minister of State's legislation might take some time given its greater scope and complexity. I commend this Bill to the House.
I thank Senator Mullen for his work on the Bill. The Government is not opposing it. I share the Senator's determination to get reform in this area and I have raised it with the Minister of State, Deputy Troy, and other colleagues on a number of occasions. I am aware that Senator Mullen has also met the Minister of State, Deputy Troy, to discuss the issue, and that the Minister of State has advised him that the Government is open to reform along the lines of this Bill.
The Minister of State has been developing legislative proposals to enhance and reform PIAB. The general scheme should be published in the coming days. The Minister of State's objective is to increase the number of personal injury claims settled through PIAB and to avoid the expense and time associated with litigation.
As Members of this House, we are all aware from speaking to owners and operators of hotels, restaurants and pubs, particularly businesses in west Galway, of the challenges that lie within these types of claims. The vast majority of people across the country have no connection with this. As Senator Mullen and all other Members will be aware, the Minister of State has noted that insurance fraud is a criminal matter and that allegations should be referred to An Garda Síochána. That is already provided for in the legislation. Creating a new offence in the PIAB Act may potentially be unnecessary. Further examination of the matter is required. If there is merit in introducing these provisions, the Minister of State, Deputy Troy, will revert with proposals to the Government.
Overall, we need to reform insurance broadly, and the programme for Government has committed to doing so. It is essential that work is carried out in that regard. Again, from my experience, I can speak to the hugely damaging impact insurance claims can have on businesses. As all Members of the House will be aware, payouts in Ireland for a long time were some of the highest in the world, likewise our premiums. This is having an extremely damaging impact on businesses and motorists. In recent months we have seen car insurance premiums in particular come down. We all welcome that, and that is the way we need to continue. We need to increase the availability and affordability of insurance for businesses, consumers and community and voluntary groups across the country. Reform of the Personal Injuries Assessment Board is an essential part of that reform agenda.
The action plan for insurance reform sets out 66 actions to be delivered across the Government. It is one of the most important programmes this Government will undertake. Progress has been made in delivering the action plan but there is still much work to do, and it is important the Government seeks to move forward with urgency. My understanding is that the Tánaiste will convene a meeting of the sub-group on insurance reform very shortly to consider progress made to date and that the sub-group will continue to meet in the coming months to ensure that momentum on reform is maintained. The action plan contains a number of actions relating to fraud. The Garda insurance fraud co-ordination office was opened in July 2021. I think we all welcome that. The establishment of that office will improve co-operation and co-ordination with the insurance industry and bring consistency to the handling and investigation of insurance fraud. Referrals should facilitate the referral of more cases to the DPP for prosecution.
The Department of Justice has examined deterrents to insurance fraud, including penalties for insurance fraud, in consultation with the relevant agencies. An important milestone was achieved in 2021 with the enactment and commencement of the Criminal Justice (Perjury and Related Offences) Act 2021, increasing the range of options for investigation, prosecution and penalties on conviction that can be considered for those making fraudulent or misleading claims. As I pointed out earlier, and as Senator Mullen has pointed out, this is a minute percentage of our population. The commencement of the personal injuries guidelines is a significant reform and is making a huge impact. Under the guidelines, award levels have decreased across nearly all ranges, with the reduction ranging from 31% to 70%, depending on the severity of the injury. PIAB data have shown a significant downward shift in award values, which will reduce the cost of claims. Data from the Central Bank show that the average cost of motor insurance policies has decreased by 20%. The Government will publish a 12-month report on the action plan later this month.
Once more, my view is that the Government has taken some positive steps which have made an impact but that more can be and needs to be done before this matter can be considered fully addressed. I hope and expect that action similar to what Senator Mullen proposes in this Bill will be implemented in the short term, following the previously mentioned examination of this matter.
I welcome the Minister of State to the Chamber and thank him for the work he has done in his Department over almost the past two years. The Fine Gael Party will not oppose this legislation. I commend Senator Mullen on the work he has done on this Bill. It seems strange that these provisions are not already in place. It seems to make perfect sense that if information is to be given it must be factual and that there is something in place to deter the very small number of people who would give misleading information. The Bill, as Senator Mullen said, concerns people who knowingly give misleading information, and that is the key point. People might argue how one can distinguish between people who knowingly do so, people who recklessly do so and people who mistakenly do so, but that is there to be adjudicated and decided on afterwards. What is important is that there needs to be a deterrent in place for people who may do this. This is essentially about protecting people who make legitimate claims or cases. This impacts absolutely everyone. There is not a household in this country that does not understand the rise in insurance costs, and there is not a business in this country that does not understand the challenges of rising insurance costs. This Bill might not play a major part but will play some part in this. This area of law needs to be tackled and changed.
I welcome the fact that Senator Mullen said he is open to working with both sides of the House on this to make sure an agreement can be found on this to bring the Bill through. Insurance in general has been a real challenge over recent years. We all remember about two years ago, I think, when a large number of outdoor sporting facilities had to close down because they could not get insurance. Anyone who works in bars and restaurants will say there is, I think, only one insurance company to which they can go to get insurance. A great many people have small bars and pubs in rural Ireland, including in places in Tipperary, where I live, and choose not to have insurance on those premises. One prays to God that nothing happens in those pubs because, if it does, they will not reopen if the matter goes to court and they do not have insurance. Essentially, however, they cannot afford it. A great many pub owners are in that situation. We need to bring in measures to rectify these things. As a Government, we need to bring in measures to make sure that the simple thing of being able to get affordable insurance for businesses is possible.
I spoke recently to someone who runs a childcare facility. There are massive demands on childcare from a range of areas, including rates and other costs, and insurance plays a huge part in that. The demand from people who need childcare has not increased dramatically, but childcare providers are in a very difficult situation in that they cannot increase the price paid by individuals because there is a cap on that price. That is right because individuals find it very expensive to pay for childcare in the first place. As for the new measures that will be brought forward for September, they do not even know what they are at the moment. There are huge costs to this, the industry is in serious trouble and people are leaving the industry on the back of it.
This discussion is welcome, however, and I am interested to hear other Members' comments. We should be able to find common ground on simple things such as this. They have an impact. As I said at the start of my contribution, I was surprised to find that these provisions are not already in place.
In fairness to the Government, this is one of 66 actions that it will bring forward over its lifetime and, in fairness to the Minister of State, he has taken serious action on this already. That has to be acknowledged. I hope we can tackle the issue of insurance and the associated challenges as a whole and that we can find common ground on this, which is really a simple Bill to bring forward, and come to some sort of an agreement-----
I am just a humble small-time plumber.
I am even more humble than Senator Mullen but, in all seriousness, it would be very hard to disagree with this. If we can come together, we can certainly find a solution.
It is good to see the Minister of State. Sinn Féin welcomes this evening's Bill. It seeks to criminalise the giving of false information to the Personal Injuries Assessment Board under section 11, which relates to the making of assessments, and section 23, which gives the board the power to require additional information from third parties, of the Personal Injuries Assessment Board Act 2003, the establishing Act for the body.
Sinn Féin supports strengthening the role of PIAB as it allows for cheaper and quicker settlement of claims than resorting to the courts. This should allow savings to be passed on to the consumer as high insurance premiums are one of the major contributory factors in the cost-of-living crisis that workers and their families are currently experiencing. However, what we have seen from the industry thus far is that savings are not passed on to the consumer but retained as increased profits. In 2021, the Central Bank published a 2019 report on private motor insurance which clearly showed that the insurance industry had decided to pocket the vast amount of savings it had made during the Covid-19 pandemic. Despite traffic falling by 37% in 2020, the number of claims falling by 26% and the cost of claims per policy falling by 20%, premiums only fell by 7%. Meanwhile, the industry made profits of €163 million, a margin of 12%. There is the evidence and the facts with regard to the insurance industry continuing to rake in profits at the expense of their customers through what is, in effect, a monopoly of a small few companies.
Insurance fraud is a serious role that plays a role in increasing premiums but we cannot trust the industry to do the right thing and demonising ordinary workers making claims, the policy of the industry for many decades, will not help. The Sinn Féin spokesperson on finance, Deputy Doherty, introduced legislation in April 2021 that would require insurers to show if savings are being passed on to consumers in the form of lower premiums and, if so, how much. The Bill was blocked by the Government, which has refused to stand up to the industry. The 2019 report also made clear the need for the role of PIAB to be strengthened.
In summary, we support the aims of this Bill as it seeks to reduce insurance costs but there are areas where it could be improved and we will work to submit amendments on Committee Stage.
I too welcome the Minister of State to the House this evening and thank Senator Mullen for bringing this important Bill, which we support, before us tonight. As colleagues have said throughout their contributions tonight, it is very hard to believe that the Personal Injuries Assessment Board Act, as amended, does not provide for any penalties for giving false or misleading information to the board in the course of an application for an assessment of a claim for personal injuries but we are told that is currently the case. That is what Senator Mullen addressed in his contribution and what he is trying to address through his Bill. As has been said, the Bill proposes to amend three sections of the Personal Injuries Assessment Board Act 2003 to provide for penalties for those who provide information that is false or misleading.
There have been a number of contributions on the reports on the insurance industry in Ireland published by the insurance companies in recent years that have suggested that the cost of fraud to the Irish insurance industry could be as high as €200 million. Insurance companies have stated in the past that they suspect 20% of cases may involve exaggerated or fraudulent claims. However, it is a little harder to get information on the exact number and the number of reported cases under investigation is much lower. Previous debates in the Oireachtas have concentrated on discussions around these numbers and the number of ongoing investigations. It is interesting that a recent survey I came across that had been carried out on behalf of one of the insurance companies in Ireland found that 86% of survey respondents believed that people who commit insurance fraud are motivated to do so because they believe they can get away with it. The survey, conducted by KPMG, found that 70% of people in Ireland believe that it is unethical to overstate an insurance claim. What the other 23% might think should worry everyone. It is very important to state that it has been announced that the Government has established an insurance fraud co-ordination office under the control of the Garda National Economic Crime Bureau. As others have said, that is welcome. With regard to the reports I have mentioned tonight, we also need to address what is happening and, more importantly, discourage any dishonesty.
We must fight insurance fraud in order to protect genuine policyholders and other groups, many of which are community groups that continue to struggle to raise money for their ever-increasing insurance bills, as has been mentioned. As I have said in the House before, I deal with many community groups that are seeing their insurance bills rise and rise again. I hope the Bill the Minister of State and his Government are proposing will address this once and for all because, at the end of the day, those community groups are doing a lot of good work in all of our communities but are put to the pin of their collar in trying to come up with money to cover those ever-increasing insurance bills, which are not justified. A community organisation I am involved with has seen an increase of €500 in its insurance bill over the last five years, which is simply not sustainable for a small community group representing 400 households. As I said before, it is the genuine persons and businesses that have been mentioned and these community groups that ultimately end up footing the bill for these fraudsters.
We simply cannot continue to suffer premium hikes and, in certain cases, the wasting of Garda resources and strain on our health services as accidents are staged and false claims made and facilitated. The effects of insurance fraud are far-reaching and have the potential to damage many individuals and areas of our State. We need to challenge it. I thank Senator Mullen for bringing forward his Bill. I look forward to discussing it further as it passes through the House.
I second the Bill. The Minister of State is very welcome to the House. I am glad to be here to support the Bill this evening. A lot of work has gone into it. I commend my Independent colleague, Senator Mullen, on bringing it forward. We are always in need of keen-eyed legislators who can spot areas where the law is falling down and there is work to be done. That is what we are here to do, to make the law as good as we can and improve it as much as we can.
Fraud is a constant problem in this country, as it is in many countries. Unscrupulous individuals seek to exploit the mechanisms existing to reimburse those who have suffered genuine wrongs. It is disappointing to think that the operation of the Personal Injuries Assessment Board has been obstructed for almost 20 years by an unknown number of claims that incorporate falsified information. This Bill will bring about a long overdue rectification. I hope the Government will see the logic of the Bill and pass it quickly through both Houses.
I thank Senator Mullen for bringing forward this legislation and I welcome the opportunity to be in the Seanad to discuss the Bill and hear the contributions of the various Senators. As previous speakers said, it is timely and important legislation, and I very much share Senator Mullen's ambition for positive change in this area.
Senators will be aware that I have today published the general scheme of a Bill to enhance and reform the Personal Injuries Assessment Board. The general scheme relates to commitments in the programme of Government and the action plan for insurance reform and reflects my ambition to increase the numbers availing of the PIAB model and to reduce the need for costly litigation.
Many speakers have pointed to the importance of businesses, consumers and community and voluntary groups being able to get insurance at a reasonable price. I wholeheartedly agree with them. For too long, the cost and availability of insurance has had a negative impact on our economy and society, particularly for SMEs in rural Ireland. While I would wish for it to be simple and quick to fix, that is just not the case. It requires action, and sustained action at that.
The Government's action plan for insurance reform does this. With 66 actions to be delivered across Government, it is one of the most important programmes this Government will undertake.
We have made progress in delivering principal actions, including an office to promote competition in the insurance market, chaired by my colleague, the Minister of State, Deputy Sean Fleming. The scope of the national claims information database has been widened to cover employer and public liability. Actions to mitigate fraud have been delivered, which I will touch on later. Most important, the personal injury guidelines have been commenced. I also wish to acknowledge the perjury legislation initiated in this House under the last shadowed by former Senator, Pádraig Ó Céidigh, and we acknowledge his contribution. That legislation has now been enacted.
The Government has been clear that the reason we are undertaking reform and changes is to ensure that insurance would become more available and affordable for motorists, homeowners and businesses. As these reforms have been realised, we expect the insurance industry to do what it is supposed to do, and said it would do, which is to reduce premiums for motor and home insurance and employer and public liability.
Reform of the Personal Injuries Assessment Board is another important instrument for change in the personal injury sphere. Since its establishment, the PIAB model has delivered major benefits by providing a low cost, quick and fair option for injury compensation. The Central Bank's reporting under the national claims information database, NCID, and, most recently, the bank's third private motor insurance report published in November 2021 shows the benefits of using PIAB. It shows the compensation awarded to claimants is broadly comparable regardless of whether the case was finalised through PIAB litigation.
However, legal costs associated with settling these claims through litigation was, on average, €16,064 compared to the legal costs under PIAB of only €841. The time taken to resolve the claim with the litigation model is, on average, 4.2 years, with claims settled through the PIAB taking, on average, 2.3 years. The NCID report makes it clear that in overall terms the board offers the most cost-effective settlement channel in terms of injury claimant settlements, but also shows that only 15% of motor claims in 2019 to 2020 and 12% of employer and public liability claim in 2019 were settled through the board.
As Senators have noted, we know the number of cases being finalised through PIAB has fallen. It has informed me that public health restrictions have led to a significant reduction in the number of road collisions during 2020 and 2021. These trends are similar for accidents in public places and places of work, with many public places closed or limited in number and many employees working from home. This has resulted in a significant decline in personal injury claims to PIAB. Claim application volumes in 2020 were 60% lower than in 2019 of 31,000. Applications in 2021 are estimated to have been reduced by approximately 20%, compared to 2020 volumes, and are down to 21,000 claims.
While it is not fair to measure the success or failure of PIAB based on the number of claims it receives, it is an important indicator of the personal injury landscape. It gives us an insight into what can impact on the number of accidents occurring resulting in claims. This includes not only the effects of Covid I have mentioned, but also increasing awareness regarding accident prevention and risk assessment. The impact of the guidelines, together with reform of PIAB, should lead to greater use of the service provided by the board and lower claim costs, and should facilitate a reduction in insurance premiums. This should contribute to reductions in insurance premiums for businesses, consumers and community and voluntary groups.
Given our shared ambition to improve availability and reduce the cost of insurance, I want to take this opportunity to inform the Seanad of work in this regard, specifically to enhance and reform PIAB. Since taking office, I have worked to develop proposals to ensure that more personal injury cases are resolved by PIAB within a faster timeframe and with lower costs compared to litigation. I have engaged with businesses, community group and representative bodies, such as the alliance for insurance reform. The resounding message from all has been for the urgent need for change in the personal injuries sphere.
Last year, I launched a public consultation on measures to enhance the role of PIAB. I am pleased to say there was an excellent response to the consultation, with more than 240 responses received. These submissions reflected the consensus that the time is right to strengthen and enhance PIAB. At the same time, I was struck by the positive feedback received which indicated that the service provided by PIAB is valuable and makes a real difference. This is reflected in the Central Bank's report which showed that legal costs are 50 times greater when claims are settled by a litigation rather than through PIAB and take almost twice as long to settle. It is clear to me that PIAB has a valuable role to play and the general scheme I published today is the start of a process of legislative reform to enhance and strengthen the agency.
The general scheme proposes to amend the Personal Injuries Assessment Board Act 2003 and the Personal Injuries Assessment Board (Amendment) Act 2019 to increase the number of personal injury claims settled through PIAB and avoid the expense and time associated with litigation. It provides that PIAB will offer mediation as a means of resolving a claim. It will retain claims of a wholly psychological nature. PIAB will have additional time to assess claims where an injury is yet to settle, rather than released into litigation. PIAB will deepen its analysis and public information roles. It will seek approval of identity on application and disclose information to An Garda Síochána in order to reduce fraud. A court's discretion regarding costs in litigation will be tightened.
I welcome the cross-party support today mentioned by various Senators and their commitment to support and enhance PIAB. I do not have a monopoly on good ideas. As with pre-legislative scrutiny, and as we go through the process of the Bill, I will gladly consider amendments and suggestions emanating from the committee.
Given the provision to extend the remit of the board and give it new statutory functions to resolve personal injury claims, I also propose to change the name of PIAB to the personal injuries resolution board. A key reason for this is my proposal to introduce mediation into PIAB. This is a new function. The advantage of mediation is that parties can avoid potentially prolonged and costly litigation and may arrive at a mutually satisfactory outcome for the party in a much shorter space of time. Mediation offered by PIAB will follow the recognised principles of mediation, including being a fully voluntary process, ensuring confidentiality and impartiality and providing the opportunity for the parties to determine the issues that require resolution.
Where parties do not consent to mediation, the existing process in respect of an assessment of claim remains. An advantage of mediation is the ability for parties to get speedy access to a process that may produce a satisfactory outcome for the parties within a short space of time. Mediation will not affect the timeline for assessment of a claim. The board will remain obliged, under section 49 of the principal Act, to assess claims within nine months of the confirmation of the respondents' consent to the assessment process, notwithstanding some exceptional circumstances provided for in the litigation.
Mediation is already successfully used by body such as the Residential Tenancies Board, the Workplace Relations Commission and the Financial Services and Pensions Ombudsman as a means of facilitating the resolution of issues between parties. My proposals are modelled on existing legislation in respect of these bodies.
With the introduction of the personal injury guidelines, a claim that has been assessed by the board but then proceeds to litigation will be considered by the courts using the same criteria and award levels used by the board. The obligation on the part of the trial judge to have regard to the guidelines is mandatory. Under the general scheme proposed, I intend to strengthen and clarify existing provisions regarding the costs in a court setting.
The discretion available to the court will be tightened regarding the award of costs against the claimant who has rejected a PIAB assessment and where the respondent accepts it.
Instead the default will be for the courts to award costs against the claimant unless this would give rise to an injustice. This should encourage a certain class of personal injury claims to be settled without the need for far more costly litigation.
While developing the legislation to reform and enhance PIAB has taken a bit longer than I would have liked, I believe it is important that when we legislate to reform PIAB, we will have gone as far as we can in terms of strengthening the agency to ensure more cases are settled through it without recourse to expensive litigation. On foot of stakeholder engagement, I considered at some length and in detail the potential to reform PIAB as a quasi-judicial body. The potential to legislate so that a claimant or respondent could only appeal a decision of the board on a point of law was fully explored. However, informed by the advice of the Attorney General, I have not been able to take this approach forward. This is because such an approach would not be compatible with the Constitution as it would impinge on the constitutional right of access to justice delivered by the court as well as the primacy of the courts regarding the administration of justice, particularly with regard to a body of common law. The general scheme is the starting point for reform and I will continue to explore all avenues and suggestions to enhance the agency.
Turning to the specific provisions of the Bill referred to by Senator Mullen, the Bill provides for penalties for giving false or misleading information to PIAB during an application for or the assessment of a claim for an award for personal injury. As Senators will know, certain classes of personal injury claims where liability is uncontested can be settled on a consent basis without the need for litigation. By proceeding with the PIAB process, the respondent - generally an insurer - will have considered the claimant's case and satisfied itself of the bona fides or otherwise of it. Where liability is an issue or the circumstances of a claim are disputed, the respondent will refuse an assessment by PIAB so that it can investigate the matter. In those circumstances, PIAB will release the case and provide authorisation to a claimant to proceed to litigation if he or she so wishes. The PIAB Act does not provide for any penalty or sanction regarding the provision of misleading or false information to it. This is because PIAB does not investigate the circumstances of claims or address the issue of liability. However, where there are suspected fraudulent claims, there is an onus on the respondent to report such suspected fraudulent claims to An Garda Síochána to enable the successful prosecution of fraud offences. Where PIAB is made aware of suspected fraudulent activity, it reports the matter to An Garda Síochána. The determination of whether fraud has taken place is by nature a matter of judgment for which a court is the appropriate body and which can consider the relevant matters presented to it by all parties.
As the Senator is aware, there is already a significant body of legislation dealing with fraudulent personal injury claims both where an alleged fraud has taken place regarding information supplied and proceedings before the court and suspected fraud outside the litigation system. This legislation includes the Criminal Justice Act 2011, the Criminal Justice (Theft and Fraud Offences) Act 2001 and the Civil Liability and Courts Act 2004. The Department of Justice has examined deterrence to insurance fraud, including penalties for insurance fraud, in consultation with relevant agencies. An important milestone was achieved in 2021 with the enactment and commencement of the Criminal Justice (Perjury and Related Offences) Act 2021 increasing the range of options for investigation, prosecution and penalties on conviction that can be considered regarding those making false or misleading claims.
The Government fully appreciates the intentions of the Senator's Bill. Fraudulent claims should be dismissed by courts and, where appropriate, fraudsters should be prosecuted. I believe there may be merit in introducing a further offence concerning the provision of false information to PIAB along the lines of the Bill. If there is a gap in the PIAB legislation, I will move to fix it. I will, however, need to consider how the proposed provisions might interact with the provisions of existing legislation. This will need to be examined to determine if the effect of the proposed provisions of the Bill provide additional benefits or merely duplicate existing provisions under which PIAB can refer suspected cases of fraud for investigation by An Garda Síochána. Consideration will need to be given to how fraud would be detected, investigated and the legislation enforced. When I have examined the matter and if there is merit in introducing these provisions, I will revert with proposals to Government.
To conclude, I thank Senators for their valuable contribution tonight. I believe greater utilisation of the PIAB process alongside consistent implementation of the personal injuries guidelines will increase the number of personal injury claims settled through PIAB and ensure that insurance products are available and affordable for all businesses and consumers. I am determined that legislation to strengthen and reform is progressed as soon as possible and I look forward to constructive engagement on this. The proposals to enhance the agency represent a new direction to address issues in the claims environment. As I said previously, Government does not have a monopoly on good ideas and we are willing to work with Members of both Houses to progress reform. I acknowledge Senator Mullen's positive and constructive engagement with me to date and I want to ensure that this positivity and constructive debate and engagement continue as I progress to enhance and reform PIAB.
I thank the Minister of State for his very comprehensive reply to my Bill and my proposal on this matter along with all my Seanad colleagues for their contributions. The Minister of State deserves great credit for the work he has been doing to date. I certainly look forward to his wider set of PIAB-related proposals in the legislation he promised to bring forward this evening. I also welcome his statement that there may be merit in introducing a further offence concerning the provision of false information to PIAB along the lines of that in the Bill. He can certainly rely on it. There is merit in this proposal and this legislation is about no mere duplication of existing provisions. The Minister of State will have the opportunity to look at what I have put before the House this evening in proposing this legislation. We have examined this in great detail. There are several circumstances where the existing legislation would not be adequate to deal with the various kinds of mischief on offer.
This particularly applies to a situation where a false statement might be made to PIAB but where no award is made. There is no legislation dealing with the fraud involved there. It might also apply to a situation where the matter goes on to court in the absence of an agreement as to PIAB's assessment or indeed the eventual award it proposes to make and where the false claim set out at the PIAB stage is dropped from the subsequent court proceedings. I put it to the Minister of State and his officials that there are gaps here that the law cannot reach. The Minister of State cited the fact that the reason the PIAB Acts do not provide for any penalty or sanction is because PIAB does not investigate the circumstances of claims or address the issue of liability but those are two different issues. There are lots of bodies that are not responsible for investigating issues of liability. Nonetheless it is an offence to give them false information. It might come to PIAB's notice that false information has been placed before it and as the Minister noted, it brings that to the attention of An Garda Síochána but the question is whether the law to prosecute it on that basis exists. In certain cases, it does not, particularly where no award has been made but possibly where an award has been made in the context of court proceedings subsequently.
Many of the examples given by the Minister of State relate to offences that are undoubtedly there regarding what happens in the context of court proceedings. The work of former Senator Pádraig Ó Céidigh and others has been very valuable there. However, there is a gap regarding what may falsely be put before PIAB and there are circumstances where there is no law that can reach that. It is not necessarily only PIAB that might come to the knowledge of that fraudulent intent. It might be due to circumstances that somehow come to light.
For example, imagine collusion between two parties where, in an employer's liability case, somebody makes a claim and is colluded with by an employee on the other side so that false information is put before PIAB. If, for whatever reason, that ends up before a court, then a fraudulent presentation has been made to PIAB. It might not come to PIAB's notice at that point, but it might come to light in some other way at another stage. That is what the criminal law is for. The mere existence of a criminal provision does not mean that it will always be possible to get the information needed to investigate and prosecute it. The hope is that it acts as a deterrent in the first place and that when information comes to light, it might sustain a prosecution such that a prosecution can happen. My legislation creates a deterrent in circumstances where there is no current deterrent. It also offers the hope that where information comes to light that would satisfy the needs of a prosecution with regard to false provision of information, a prosecution might then be possible.
I wish the Minister of State well with his Bill. He may well decide, having examined this more closely with his officials, to incorporate my proposals into his Bill. From what I have heard so far, they are not currently envisaged. However, the chances are that I might get to the floor sooner rather than later in an attempt to bring this further. I ask the Minister of State and his officials to look at this in the near term. I ask the Government to consider giving me time to progress this small but significant and necessary Bill through the House, once the Minister of State has satisfied himself that there is no duplication and that there are no unforeseen consequences. From what I have heard today, there is nothing in the legislation proposed by the Minister of State that would in any way be contradicted by what is contained in my Bill. On that basis, I thank the Minister of State for his positive response and I look forward to it becoming even more positive as he gets a chance to examine this legislation further as it hopefully continues to Committee Stage.
Question put and agreed to.
When is it proposed to take Committee Stage?
Next Tuesday.
Is that agreed? Agreed.
Committee Stage ordered for Tuesday, 15 February 2022.
When is it proposed to sit again?
Tomorrow at 10.30 a.m.
Cuireadh an Seanad ar athló ar 6.53 p.m. go dtí 10.30 a.m., Dé Déardaoin, an 10 Feabhra 2022.
The Seanad adjourned at 6.53 p.m. until 10.30 a.m. on Thursday, 10 February 2022.