Wednesday, 9 October 2019

Questions (6)

Robert Troy


6. Deputy Robert Troy asked the Minister for Business, Enterprise and Innovation the timeline for implementation of each of the 14 recommendations made by the Personal Injuries Commission, PIC, with regard to personal injury awards. [41110/19]

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Oral answers (8 contributions) (Question to Business)

The cost of insurance is crippling small businesses. It is causing some of them to close down. The response from the Government to date has been lethargic, to say the least. I ask the Minister of State, Deputy Breen, to outline to the House the level of priority that is being given to the implementation of the PIC's 14 recommendations by the Government as a whole and, in particular, by him in light of his responsibilities. We must ensure we tackle these runaway costs in a way that results in reduced premiums and sustains the viability of businesses into the future.

The Minister, Deputy Humphreys, and I are conscious of the serious impact of high insurance costs on businesses. It is important that consumers and businesses can obtain insurance cover at a reasonable and fair price. Apart from motor insurance, which falls under the remit of the Minister for Transport, Tourism and Sport, policy responsibility for insurance is a matter for the Minister for Finance. We have no direct policy responsibility for insurance. Officials from the Department of Business, Enterprise and Innovation and other Departments and agencies, including the Personal Injuries Assessment Board, which falls under our remit, are members of the cost of insurance working group, which is chaired by the Minister of State with responsibility for financial services, Deputy D'Arcy.

The work of the group is complemented by the work of the PIC. We were pleased to submit the commission's second and final report to the Government on 18 September 2018. The publication of this report concluded the commission's challenging work programme since its establishment in January 2017 on foot of a recommendation in the working group's report on motor insurance. The first report of the commission, which was published in December 2017, made four recommendations, two of which are ongoing and one of which is partially complete. The final recommendation, which relates to the Book of Quantum, has been superseded by the commission's recommendation that the Minister for Justice and Equality should ask the judicial council, when it has been established, to compile judicial guidelines for appropriate general damages for various types of personal injury.

The second and final report made a further ten recommendations. While they are not timebound, we expect they will be implemented by the relevant bodies as soon as possible. Following the publication of this report, we wrote to relevant Government colleagues and organisations to look for co-operation in advancing the implementation of the recommendations that are relevant to them. Progress on the implementation of the recommendations is reported on through the cost of insurance working group progress reports, the most recent of which was published in July 2019. Four of the commission's recommendations relate directly to recommendations in the reports. Of the remaining six, one is complete and two relate to the development of judicial guidelines. These recommendations, along with the remaining three recommendations, are under consideration by the relevant organisations.

The passage of the Judicial Council Bill through the Houses of the Oireachtas in July 2019 provides for the establishment of the personal injuries guidelines committee, whose function will be to develop the relevant personal injury guidelines for appropriate general damages for various types of personal injury. We believe that the cumulative effects of the implementation of the recommendations from the two reports of the personal injuries commission, along with the reports of the cost of insurance working group, should bring greater consistency and predictability-----

Additional information not given on the floor of the House

-----to awards, faster resolution of claims and ultimately, a reduction in insurance premiums. This will benefit consumers, businesses and society as a whole.

We all know that the cost of personal injury awards is totally out of sync in Ireland. A recent report showed that the average award for minor tissue whiplash injury is €17,338 in Ireland, whereas they are €3,798 in the UK. In Australia, one is unlikely to qualify for compensation. In Sweden, less severe whiplash and injuries do not receive compensation.

This week I was contacted by someone in the hospitality sector. The person's insurance has increased from €41,000 to €105,000. He is genuinely considering closing the doors, with the loss of 31 jobs. A report which is actionable and has no timeline for when those actions are to be taken is, quite simply, pathetic. The Government as a whole has responsibility to tackle this industry.

I have a number of questions. When will the judicial council be established by the Government? Who will compile the guidelines for general damages relating to personal injuries? Why did it take the Government until August this year to request that the Competition and Consumer Protection Commission, CCPC, undertake a study on how the public liability insurance market operates? When will the findings of that study be published?

I agree with Deputy Troy about the cost of insurance for businesses and drivers. The Minister, Deputy Humphreys, and I heard all of the stories from businesses around the country during our travels. It is a major issue.

Deputy Troy asked about the Judicial Council. The Act is now law and we expect the council to be established by the end of 2019. As the Deputy knows, the Bill was passed in July and will establish the Personal Injuries Commission. While the Government cannot interfere with its deliberations, I hope the Judiciary will understand the importance of the issue and prioritise it.

It is important that we bring down the cost of insurance and that there is greater consistency and predictability of awards. A faster resolution of claims and, ultimately, a reduction in insurance premiums are key for us as we drive forward. That is why this will benefit consumers and society as a whole. The work must carry on and the judicial council will be an important template for the reduction in insurance costs.

Hearing stories and taking action are two different things. The Minister of State used words like "hope", "envisage" and "anticipate", but he has provided no clear timelines for when real and meaningful change will take place that will result in a reduction in the cost of premiums and in the number of businesses closing down. The Government has yet to establish a national claims information database, tackle insurance fraud - there are no significant penalties for fraudsters - establish the judicial council to compile guidelines for general damages, establish a publicly funded anti-fraud unit in An Garda Síochána, set up a business insurance premium index to track prices over time or take any action on stabilising personal injuries claims. I accept that not all of these matters are the responsibility of the Minister of State; in fact, they are the responsibility of other Departments. However, we need a whole-of-government response to this issue, which is killing businesses. I again ask why it took the Department until August of this year to request that the CCPC undertake a study? When will it be published? For God's sake, please work to tighter timeframes.

The study will be published as soon as possible. The CCPC has received extra resources.

On the other issues the Deputy mentioned, we have published guidelines for the reporting of allegations of fraud, including insurance crimes, for An Garda Síochána. A new insurance fraud category in the Garda PULSE system has been live since November 2018. The Garda National Economic Crime Bureau and Insurance Ireland's anti-fraud forum meet on a regular basis to discuss and act upon current and ongoing issues. The Central Bank Act 2018 commenced on 28 January 2019. The availability of information collected under the legislation allows policymakers to have a better understanding of the factors which influence the cost of insurance. A lot is happening. There is a whole-of-government approach.

The recommendation is that if people shop around, they will find cheaper insurance is available. I am constantly speaking to people. There are significant discrepancies in the cost of insurance. It is an issue on which we are working in order to ensure that we bring down the cost of premiums.

Last Saturday I received a telephone call from a business person who employs 106 people in the hospitality sector, comprising a supermarket and small play area for children, in a rural town in Ireland. Last year his insurance cost €19,000, with an excess of €500 for any claim. This year it is €49,000 and the excess has increased to €20,000 for a claim. People are at their wits' end. If this continues, businesses such as this will close. We have been talking about this for the past three and half years. The time has come for the Government or someone else to step in and reduce the cost of premiums.

We have heard today of a claim taken by the parents of a young child who fell in a crèche and was awarded €32,000. The crèche concerned will be lucky to survive. The Minister of State mentioned getting quotes from other companies. If one is dealing with a broker, when it requests a quote for a company nobody else can touch it until the broker gets back to the business concerned.

The study is being investigated by the CCPC. We are working extremely hard on a whole-of-government approach to ensure that the cost of insurance is reduced to affordable levels for companies. We are all aware of the stories the Deputy has told - I have heard them on a regular basis. It is very difficult for companies to survive, but we are working to address the issue. When the new Personal Injuries Commission comes into place it will make a big difference. We have advertised for people to be part of it and it will happen before the end of the year.