The need to tackle insurance fraud and its costly impact on enterprise and business, in both employer liability and public liability terms, goes to the core of the Government’s on-going drive to reduce the burden on our economy of insurance costs. As the Deputy will be aware, the focal point of this reform is the Cost of Insurance Working Group which was established by the Government in July 2016 and is chaired by Minister of State, Michael D'Arcy TD. The objective of the Working Group has been to identify and examine the drivers of the cost of insurance, and recommend short, medium and longer term measures to address the issue of increasing insurance costs. It brings together all relevant Offices and Departments, has conducted extensive consultations with stakeholders and set-up a dedicated Fraud Roundtable to give more detailed consideration to that particular issue.
The Working 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. In its conclusions, the Working Group was of the view that appropriate use of the legislative provisions contained in the Civil Liability and Courts Act 2004 could be facilitated by encouraging industry to more actively pursue complaints with An Garda Síochána where they believe fraud to have featured in claims. The Group also believed that more could be done to establish stronger working links between the relevant stakeholders to allow for the fraudulent claims to be investigated, and where appropriate, prosecuted. I can confirm that my own Department has taken follow-up action in respect of 17 of the recommendations arising from the Working Group's reports, a number of which also involve An Garda Síochána and the Courts Service in their on-going delivery. As a result of this work, a range of direct measures are being taken by the Government to address insurance fraud in a more effective way, including under the anti-fraud provisions of the 2014 Act.
New Guidelines for the Reporting of Allegations of Fraudulent Insurance Claims to An Garda Síochána, were published on 1 October 2018 to make it clear what insurance companies should do in response to suspected fraud in a personal injuries claim. A new insurance claim fraud category on the Garda PULSE system went live on 2 November 2018, which enables the production of better statistics. The Garda National Economic Crime Bureau and Insurance Ireland’s Anti-Fraud Forum now meet on a regular basis to discuss and act upon the issues concerned. The Insurance Fraud Database Working Group, which is chaired by my Department, is continuing its work with Insurance Ireland and the Garda authorities to establish an integrated insurance fraud database, which can identify patterns of such fraud.
In relation to insurance fraud investigation, while the Garda Commissioner has indicated his preference that, in principle, An Garda Síochána should not be funded by any source other than the Exchequer, he is of the view that a divisional focus is preferable, insofar as the investigation of insurance fraud is concerned, as opposed to the establishment of a centralised investigation unit. This approach is aligned with the general divisional-focused Garda model going forward. These are matters on which my Department is in on-going engagement with An Garda Síochána and on which any relevant proposals will be given appropriate consideration by the Cost of Insurance Working Group.
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.
The Law Reform Commission is conducting 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 now forms part of the Commission’s Fifth Programme of Law Reform approved by the Government on 20 March 2019. In its Final Report of July 2018, the Personal Injuries Commission, chaired by the former President of the High Court, Mr. Nicholas Kearns, noted this development deeming the Commission the appropriate body best equipped and resourced to do this.
The Central Bank (National Claims Information Database) Act 2018 was commenced by Minister Paschal Donohoe on 28 January 2019. This legislation will provide a better understanding of those factors that influence the cost of insurance. The new Personal Injuries Assessment (Amendment) Act 2019 was commenced by Minister Heather Humphreys on 3rd April 2019 thereby reinforcing the role of the Personal Injuries Assessment Board.
In conjunction with my own Department, an amendment has been made to section 8 of the Civil Liability and Courts Act 2004 to ensure defendants are notified of a claim having been lodged against their policy. This is now to be done within one month instead of the two-month period which previously applied by way of alignment with data protection legislation for the retention by businesses and employers of relevant CCTV footage. The court will draw inferences from a failure by a plaintiff to notify and can reflect this in the non-payment or reduction of an offending plaintiff’s costs. Similarly, an amendment has been made to section 14 of the Civil Liability and Courts Act 2004 which deals with the matter of a verifying affidavit in a personal injuries action. The amendment provides that where there is a failure to lodge an affidavit by the set deadline, the court shall draw inferences and can reflect this in the non-payment or reduction of an offending plaintiff’s costs.
It is increasingly evident, including as a result of the actions of the Cost of Insurance Working Group that I have outlined, that insurers are now making greater efforts under existing law to crack down on suspected fraudulent claims. There has also been a number of recent high-profile court judgements under which the legal consequences and sanctions arising from insurance fraud have been left in no doubt. We now have a series of mutually reinforcing measures in play that are intended, in their collective implementation, to give greater effect to the law and to the regulation of this area. We have to achieve this in a way that can better serve bona fide insurance consumers and legitimate claimants while deterring and penalising fraudsters. I would also continue to strongly encourage the insurance sector in taking a more determined approach to providing cover at affordable cost for those areas of enterprise, leisure and community activity that are experiencing difficulties in this regard at the present time.