The issue of the introduction of legislation for the purpose of capping the damages which a court may award in respect of personal injuries is among those being considered by the Cost of Insurance Working Group (CIWG) established by the Minister for Finance in July 2016 and chaired by Minister of State, Michael D'Arcy TD. The objective of the Working Group is to identify and examine the drivers of the cost of insurance, and recommend short, medium and longer term measures to address the issue.
The Group published its Report on the Cost of Motor Insurance in January 2017 and its Report on the Cost of Employer and Public Liability Insurance in January 2018. As the Deputy will also be aware, this is an area also for consideration under the Civil Liability (Capping of General Damages) Bill 2019 that was introduced by Senator Anthony Lawlor as a Private Member’s Bill in the Seanad on 6th March 2019 where it has since completed Second Stage.
In response to recommendation 5 of the January 2018 Report of the CIWG, the Law Reform Commission is now carrying out a detailed analysis of the possibility of developing constitutionally sound legislation to delimit or cap the amounts of damages which a court may award in respect of some or all categories of personal injuries. This forms part of the Commission’s Fifth Programme of Law Reform approved by the Government on 20 March 2019. It is my understanding that the Law Reform Commission has given this project its immediate attention with the aim of publishing an issues paper in the coming months.
As emerged in the course of the Working Group's deliberations, this is an area of the law replete with complex constitutional and legal issues. The Working Group also recognised that a fundamental consideration in any analysis of this issue is whether a legislative cap on damages, or a similar measure, is necessary for the common good. At the same time, these aspects have to be balanced by the rights of genuine plaintiffs to an appropriate level of compensation. In short, the Working Group recognised that the State must be cognisant of the constitutional rights of all parties and must balance those rights to ensure any encroachment on them is justified, proportionate and in the common good.
The Personal Injuries Commission, which was established in January 2017, has also presented two reports over an 18-month work programme with a particular focus on soft-tissue, or whiplash, injuries. The Commission concluded that these types of injury account for a large proportion of claims by volume in Ireland. In its second report, the Commission presented the results of a benchmarking exercise which reveals that the level of general damages for soft tissue, or whiplash, injuries in this jurisdiction runs at a multiple of 4.4 times that of England and Wales. The Commission Chairperson, Mr. Justice Nicholas Kearns, stated that this information is such as to confirm publically expressed concerns about such levels of award and the effect they may be having on motorists and businesses who require insurance cover. The Commission Chairperson also referred to the detailed analysis which the Law Reform Commission has been asked to undertake in relation to possible legislation in this area and expressed the view that the Commission is best positioned and best resourced to advise further in this regard.
The possible introduction of legislation to cap insurance awards has, therefore, been taken in hand by the Government as part of its deliberations and programme of action under both the CIWG and the Personal Injuries Commission. This will now be supported by the necessary inputs and expertise of the Law Reform Commission. Together, these measures will inform any further steps which may be taken, including in terms of what possible legislative or other measures may be considered appropriate and with due regard to the relevant legal and constitutional aspects to which I have referred.
Finally, as part of its findings, the Personal Injuries Commission recommended that the future Judicial Council be assigned the function, under its statute, of compiling guidelines for appropriate general damages for various types of personal injury, and that pending introduction of such legislation, the judiciary participate with representatives of the Personal Injuries Assessment Board and my Department in the formulation of guidelines as to quantum in the case of claims for damages for soft tissue/whiplash injuries. These are matters on which I am in on-going discussion with the Chief Justice and the Attorney General while I will also be bringing forward appropriate amendments to the Judicial Council Bill, which has just completed Committee Stage in the Seanad.