As I said before the suspension of the debate, I was anxious for the Tánaiste to make sense of the fact that reductions in premia arising from fewer cases being taken, fewer fraudulent cases and more moderate awards do not seem to be translating into lower premia for employers' liability cover in the business community.
This is particularly the case when the excesses which apply in regard to liability insurance are far higher than in motor cases and there is such a significant level of self-insurance by companies. I would be horrified to think there might be manipulation of business insurance losses to keep maximum pressure on politicians, given the impact of high insurance costs on employment.
A major problem with insurance in Ireland is the lack of competition in the marketplace. That we have so few general insurance firms providing competition for consumers is the fundamental problem. I am concerned that the existing players in the marketplace might well be contented by the continued absence of competition. It suits them well. Attempts to make the marketplace more attractive are unlikely to be met with universal approval from them. It is for this reason that they must be compelled to make the new reforms work. In the absence of such compulsion the insurance industry must give firm guarantees of reductions, rather than equivocal and mealy-mouthed statements suggesting that they might not be able to pass on any savings made.
On the issue of competition, I was recently alarmed to hear that the general liability business of Eagle Star might be transferred to one of the existing players in the marketplace. I have also been alarmed by attempts by some of the insurers to cynically use the penalty points system as a means of refusing to provide cover. The Tánaiste and the Competition Authority must vigorously pursue any companies which try to restrict competition. It is regrettable that the authority has been so slow and tardy in the completion of its study of competition in the insurance sector. With its considerable powers to search and seize documents and request information, it could have played a meaningful role in getting to the bottom of the insurance crisis. However, it now looks like its report will be available long after the problem has been fixed, if the insurance reforms are implemented and the Tánaiste's objectives are fulfilled. Delay seems to be a persistent problem with the authority, one which the Tánaiste will need to address at some stage.
I broadly welcome the Bill's provisions. However, I note the debate in the Seanad, particularly the concerns raised by Senators from all sides of the House about aspects of the provisions. It seems the Tánaiste has made up her mind in regard to this legislation and is not willing to accept amendments that have not received the imprimatur of the interim PIAB. It is the Houses of the Oireachtas, not the interim board of the PIAB, that make the law in this State. I hope that in the debate in this House the Tánaiste's mind will be more open to genuine concerns and comments made by Members from all sides.
In the debate in the Seanad two key points emerged which received all-party support, including from Fianna Fáil. The first concerns the issue of representation. The Tánaiste seems unable or unwilling to allow people to be represented by solicitors in their dealings with the PIAB. She argues that legal representation is not necessary in dealings before the PIAB because there are no legal issues being considered. She also told the Seanad which the Minister of State has repeated today that, if a person chose to instruct a solicitor to act as his or her agent in dealings with the PIAB, the board would ignore this instruction and continue to deal directly with the claimant.
The Tánaiste needs to be careful. If she allows the impression to be created and sustained that the PIAB is unfair and lacks balance in dealing with claimants, the PIAB will not work. Insurance companies, in their dealings with the PIAB, will have the full resources of actuarial, legal, medical and engineering advisers available to them when assessing which cases it will deal with under the PIAB. Claimants will have no such support. If a person decides to instruct a solicitor to represent him or her in his or her dealings with the PIAB at his or her own expense, it seems churlish, petty and suspicious for the PIAB to ignore that instruction.
Not everyone is as skilled, equipped or talented in dealing with official bodies as the Minister of State. If people require representation in their dealings with the PIAB, it should be facilitated. It is also ridiculous for the Tánaiste to suggest that the PIAB will not be dealing with the legal issues and that solicitors will have no role to play for claimants in dealing directly with the PIAB. I can think of a number of legal issues with which the PIAB will be dealing, including establishing the identity of the respondent, determining the level of contributory negligence involved, assessing whether a claimant is vulnerable and making an assessment of a person's legal entitlement to redress and compensation, presumably in accordance with the legal principles handed down by the courts.
The PIAB will also have to act within the law in the manner in which it respects the rights of individuals. If claimants wish to be represented in their dealings with the PIAB and pay the cost of representation themselves, without adding any burden of costs, the PIAB should recognise this fact. I gather this is a point that has found favour with a number of the Tánaiste's colleagues, including the Minister for Defence, Deputy Michael Smith, and some Fianna Fáil colleagues in their discussions at constituency level. It may be somewhat different from what happens in Dublin. It has also received cross-party support in the Seanad. I want the Tánaiste and the Minister of State, Deputy Fahey, who represents the Fianna Fáil parliamentary party well at times, to take these views on board.
The second major issue which concerns me about the PIAB is the issue of liability. The PIAB has been sold to the public and politicians on the basis that it will deal with cases where liability is not an issue. The debate In the Seanad confirms that this is a complete hoax. Under the Bill, as presented, an insurer can compel a claimant to go to the PIAB. The claimant can wait for up to 15 months for the PIAB to reach an assessment of the case. If, at the end of that process, the insurer does not like the assessment reached, the claimant can be forced to start again with a full set of proceedings in the courts. In those subsequent proceedings the insurer will be perfectly entitled to deny liability and fully fight the case.
In the light of this, the Tánaiste should stop trying to fool people that the PIAB will deal with cases where liability is not an issue. It will only deal with cases where liability is not an issue for as long as the insurer determines it is not an issue. However, if the insurer does not like the result produced by the PIAB, the claimant faces a full legal case in the courts on the issue of liability and the extent of any damages claimed and will have to do so on the basis that there will have been no order for protection of the site involved, no order covering the material damage associated with the claimant in respect of the machinery or site involved until such time as the case can be dealt with in the courts. The claimant will be at a disadvantage if any effort is made in the meantime, during the 15 month period, to ensure the site is tampered with or machinery where, for example, an accident occurred is interfered with.
I am not alone in my concerns in this regard. I note that speakers from all parties in the Seanad had similar concerns. In particular, I noted the comment by Senator Maurice Hayes, former Ombudsman in Northern Ireland and Chairman of the National Forum on Europe, who stated:
I worry about the possibility that an insurance company might string the matter along, allow the complainant to produce whatever he or she needs to produce and then say "hard luck, we must start again in the courts". This is something which must be avoided either by way of rule of the organisation or rule of procedures, if not by statute.
As I understand the Tánaiste's position on the Bill, she has no intention of avoiding this situation but again places her belief in the promise of good behaviour from the insurance sector. She also argued in the Seanad that it was ludicrous to suggest insurers would ignore an assessment made by the PIAB in an individual case and then take the case to the courts, given that they would be paying for the PIAB. I am afraid this contention does not stand up.
I have no doubt lawyers carry a fair share of the blame for the manner in which the courts system operated, one aspect of the problem of high insurance costs. However, insurers carry an equal element of culpability. The Tánaiste talks regularly of claimants in Ireland having to wait six times longer than in the United Kingdom to receive compensation. While this is no doubt attributable to opportunistic lawyers, greedy plaintiffs and inefficient court procedures, insurers must also bear some share of the responsibility. I am personally aware of many cases where insurers entered a full defence in a case where liability should not have been at issue. Furthermore, many cases are settled at the door of the court which insurers could have settled at an earlier stage of the proceedings. However, there was no incentive for them to do so, given that they have the ultimate discretion of raising premiums to pay for their inefficiencies. The latter is contributing to the lack of competitiveness and higher than usual premiums being charged to customers.
The manner in which many insurers dealt with the court process, refusing to settle at an early stage and stringing claimants along until they reach the doors of the court, does not inspire confidence in terms of changing their approach in dealing with claims before the PIAB. The simple, sad fact the Tánaiste has yet to learn is that insurers will not willingly pass on reductions in premiums unless there is some element of compulsion involved. For this reason, they should not be allowed to contest liability in subsequent court proceedings if they reject an assessment issued by the PIAB. It would perpetuate an extreme injustice on claimants if insurance companies were able to convey the impression, through involvement with the PIAB, that liability was not at issue in a case and then had the freedom to reject an assessment reached by the PIAB and, 15 months later, contest liability. That is a real cause for concern and is a case of having one's cake and eating it.
Unless the Tánaiste addresses this matter in the Bill, she will create major difficulties for the assessment board, businesses and consumers. Insurers will operate the system to suit themselves, not the public. The Tánaiste needs to stop looking at insurers through the rose-tinted glasses provided by the insurance sector and claims managers. I hope she will take account of the points we are making. She needs to face reality in terms of the way she deals with this issue and start to exert pressure to insurers. She must realise that the success of the PIAB will not be down to claimants but more likely will depend on the response of the insurance industry to the initiative. The record to date does not fill me with confidence. The ultimate success or otherwise of the Personal Injuries Assessment Board will depend on whether customers receive lower insurance premiums.
In 1986 there was a great deal of discussion about the abolition of juries from court cases involving compensation claims. The insurance companies promoted such an abolition to the Oireachtas by claiming that they could reduce premia substantially if legislation were enacted. The former Minister, Deputy Howlin, will be aware that the abolition of juries from such cases and the increase in the number of senior and junior barristers who became involved in cases led to the cost of litigation doubling rather than, as originally intended, being reduced by half. That is the background to issues relating to the compensation of people in the event of their making claims. The abolition of juries led to higher rather than lower insurance premia.
The Personal Injuries Assessment Board will be successful if it merely assesses claims and does not become either another layer of bureaucracy or another form of court. It should primarily be established for the purpose of dealing with liability claims initially. I do not believe that we should rush into assessing road traffic accidents or personal injury through any form other than employers' liability until we see that the new system is working well.
Section 56 deals with the composition of the board. The members of the board are already adequately versed in dealing with employers' liability claims. However, when the board proceeds to deal with claims involving personal injury or road traffic accidents, will it be necessary to change the members in order that it will have the relevant expertise available to it to deal with such claims? I would like this issue to be explored further.
As already stated, I am concerned about section 16 and the fundamental issue in law with which it deals. Article 6 of the European Convention on Human Rights explicitly lays down the right of people to seek redress through the courts in a particular jurisdiction.
Section 7 penalises claimants for taking advice by not giving them time to draw up documents or allowing them to obtain whatever advice, whether it be legal, medical or engineering, they may need. They are obliged to serve documents, not just an application form, to the assessment board, but they will have to support it by resorting to the expertise of members of the various professions. They are obliged to pay for such expertise themselves. Insurance companies will pay for whatever expert advice they need but they can pass on that cost in the form of higher insurance premiums to their customers. Respondents and claimants will not have access to the same level of advice. Section 7 should not be a penalty to claimants. Has the Tánaiste obtained legal advice, particularly in respect of constitutional issues, regarding the position vis-à-vis the European Court of Human Rights?
Section 11 deals with the making of applications. As public representatives, we do not want to end up, as we do regularly in other instances, giving people advice in respect of assessment application forms. I hope the helpline will be of assistance to people but I suspect that claimants will seek professional advice rather than relying on that offered by those manning the helpline.
With regard to sections 20 to 22, there is no guarantee that the Personal Injuries Assessment Board will remove cases from the court system. The book of quantum will be made up of settlements apart from court awards. Many settlements are made on the steps of courthouses and, subsequently, the claims are struck off the High Court list. As a result, no one knows the result of such claims. For one reason or another, people like claims to be settled because they do not want to take the stand in courts. We cannot obtain the full details of such settlements and this will affect the accuracy of the book of quantum.
We are being asked to pass this legislation without knowing the rules and regulations attaching to the workings of the Personal Injuries Assessment Board. Section 46 refers to the introduction of rules. The Tánaiste should outline, on Committee Stage, exactly what those rules will be before we approve the system.
Section 50 deals with the time limits attaching to the deliberations of the Personal Injuries Assessment Board in respect of claims. In my view, those limits are somewhat generous and should be reduced rather than extended.
The Personal Injuries Assessment Board represents a major reform in the manner in which compensation claims will be paid. It is a new structure and has the objective of reducing the cost of litigation for respondents and insurance companies. The ultimate objective is a reduction in the cost of insurance premia. We will not be able to adjudicate on the success or otherwise of this scheme until employers' liability is dealt with effectively by the Personal Injuries Assessment Board. Only then will the board be able to extend its influence into other areas. We will ultimately be judged on whether the board has a major impact on reducing the costs of litigation which, in turn, would help reduce the cost of insurance premia to ordinary individuals and the business community.
As stated earlier, I support the Bill in principle. I look forward to Committee Stage on which we will be able to tease out the various sections and be provided with additional information. I hope the Tánaiste will be in a position to ensure that ordinary claimants do not lose out and insurance companies benefit. Balance is required for everybody involved in the process, not least those who will submit claims to the board.