Dáil Éireann díospóireacht -
Wednesday, 17 Dec 2003

Vol. 577 No. 4

Personal Injuries Assessment Board Bill 2003 [ Seanad ] : Report and Final Stages.

Mr. Morgan

I move amendment No. 1:

In page 7, between lines 30 and 31, to insert the following:

"(2) Upon the enactment of this Bill the Minister shall have the power to make an order obliging an insurance company to reduce premiums in line with savings achieved as a result of the establishment of the Personal Injuries Assessment Board.".

Perhaps I can get agreement from the Tánaiste on the amendment. Will she agree that the Bill is essentially and principally about reducing the cost of insurance premiums? During the Seanad debate she said that the objective of the Bill was to tackle the delivery cost by way of speedier compensation for genuine claimants while reducing the cost of insurance for consumers and businesses alike. While I agree with this, unless the Bill does exactly that, it will be useless and all the drafting, amending and debating will count for nothing. The crisis will continue for business people, employers, motorists, especially young motorists, and people in the voluntary sector.

This amendment strengthens the Bill. It gives it considerable backbone and ensures that it does exactly what it says. In other words, it will reduce the cost of insurance premiums. It will also give statutory control over the cost of insurance, which is long overdue. We all agree on the excessive cost of insurance, which is obvious from the debate on all sides of the House. If the Tánaiste is serious about the issue, which I believe she is, I have no doubt she will accept the amendment.

The amendment is mild-mannered, so to speak, because it does not say the Tánaiste must make an order to oblige insurance companies but that she may make an order, or she certainly has the power to make an order, obliging insurance companies to reduce premiums. It also states that insurance companies should reduce premiums in line with savings achieved as a result of the establishment of the Personal Injuries Assessment Board. As it is a reasonable amendment, it should be acceptable to the Tánaiste.

Insurance companies have shown no inclination to date to reduce insurance costs despite calls not just from leaders of industry and unions but also from the Tánaiste and a host of other political and business representatives. In the face of a lack of co-operation from the insurance industry, this strengthening of the Bill is necessary. It is essential to control the price of insurance. I would be concerned that, without the amendment, the situation will continue exactly as it is at present and there will be no improvement for the people to whom we referred during our contributions. Will the Tánaiste to accept the amendment?

Mr. Broughan

I commend the Tánaiste on being close to the finishing post in establishing the PIAB. It is fair to say that the issue has been on the table for the past six and a half years during which time our constituents have been crying out for action in terms of motor and small business insurance in particular. I had experience of this as a community director. I welcome the fact that we have at last reached this stage, even though we should have been at this stage four or five years ago.

I commend Deputy Morgan and support the thrust of his amendment. According to reports today, the Blue Book on the insurance industry which shows the profits of insurance companies from premiums over the period 2001 to 2002 has been published and it seems there has been a significant upturn in profitability. The kind of lament we have been hearing through the years at Question Time when we discussed this matter does not seem to apply any more. The public will hope to see improvements arising from this. The market is changing.

I am deputising for our spokesperson, Deputy Howlin, whose mother, sadly, died earlier this week. I was not present during other debates on the Bill but the Minister's colleague mentioned on Second Stage the new court rules and other improvements that would be coming into effect and combine with the operation of the PIAB. I congratulate the Minister on the appointment of the interim board and her attempts to drive the process, although I wish the issue of motor insurance would come onto the agenda more quickly.

Deputy Morgan is right to suggest that the Department should have some direct ability to stop the gouging of citizens through insurance. What is wrong with the market? Under my own portfolio, there is talk of market failure in the area of broadband but there seems to have been incredible market failure in the area of insurance, which is damaging us. We need to do something about this. While the new board will be a help, perhaps there should be a benchmark under which the Minister could say she wanted to see savings translated into lower premiums for small business people and in motor and house insurance. During her period of office matters have become intolerable and the problem has contributed significantly to Ireland's loss of competitiveness. We must try to change this. I support the amendment.

Mr. McHugh

I do not know whether it is possible to enshrine compellability as Deputy Morgan requests but if it is possible, I fully support it. The point of the Bill was to reduce insurance costs. There is no point in this new board being in place if the insurance companies will still hoodwink us into believing there is no basis for reducing costs. It gives me no pleasure to say this but we cannot trust them. I say this taking into consideration all the evidence heard by the committee inquiring into the high cost of insurance and the information contained in the MIAB report, in which it is pointed out that the insurance companies were one of the only interested parties which refused to co-operate with the investigation. We cannot allow ourselves to go further with this unless we have some mechanism to compel the insurance industry to pass on whatever savings are achieved by this new board.

Tánaiste and Minister for Enterprise, Trade and Employment (Ms Harney)

I am not in a position to accept this amendment for a number of reasons. I am not a believer in price controls. Competition in the market drives down prices for all consumers, drives up quality and leads to more innovation and better value for money. Even if I were so disposed, however, I am prohibited by an EU directive, Council Directive 92/49/EEC, from controlling prices in the insurance market. What the Government can do, and is doing in this case, is to seek to bring about change that will affect the operation of the insurance market.

I share the views expressed by Deputies here and elsewhere that we do not have a properly functioning insurance market. However, there are some hopeful signs. Prices are on the way down – we can see from the recent CSO publication on inflation that the reduction in insurance costs played a significant role in the overall reduction in inflation in the economy over the past month. I hope this will continue. There is much anecdotal evidence to suggest that consumers are beginning at last to see a reduction in prices.

The publication last week by the IFSRA of the outcome of its survey shows that despite large variations in the prices being quoted, competition is in operation. It is to be hoped that following the enactment of this Bill and the realisation of the proposals of the Minister for Justice, Equality and Law Reform, Ireland will be more attractive to operators, especially niche players. I am not certain we will attract any major new insurer into the market because it is after all a small market of only 4 million people but I am optimistic. A number of niche players are seriously considering providing a service in this market and I hope to meet some of them next month, both in Dublin and overseas. That is the greatest guarantee we can give that prices will come down. Increased competition will drive down the price of insurance, as it has done in many other markets, with the radical reform measures being put in place.

I must take this opportunity to express my sympathy to Deputy Howlin and his family on the sudden and sad death of his mother earlier this week. The Deputy has taken a great interest in this area for many years and I know he would have wished to be here. I extend my sympathy to him on my own behalf and that of the Government.

Mr. Morgan

I share in the expression of sympathy for Deputy Howlin on the death of his mother.

I would be delighted if the Tánaiste's comments about the insurance market were true but doubt that is the case. No longer than a few hours ago in the House we heard the leader of the Labour Party advise the Taoiseach that there was an over-supply of step-down beds, or nursing home places, in this city, yet there has been no reduction in the cost of such services to the public or the health boards. To depend entirely on the market as a price control mechanism is not the best course of action.

I carried out some research to find out whether any EU directives or regulations would prohibit the provisions of the amendment. Clearly, however, it was not as exhaustive as the Department's research. I notice there is no bar on putting in place a price ceiling on alcohol and several other commodities and goods. Therefore, I am surprised to hear there is a directive prohibiting this in the case of insurance. We should campaign on this issue in Europe in order that we may better deal with the cost of insurance. I would still like to see a measure giving the Minister more control over prices rather than just calling on the insurance companies to reduce them. So far we have clearly seen that they have no inclination to reduce their prices and I do not think the Bill will change this.

If the estimate of 40% for legal costs in litigation is delivered upon, who is to say the insurance companies will pass this back to the motorist, the business person or those in the voluntary sector? Who is to say all those sectors will not continue to be ripped off? There is no guarantee whatsoever. I am disappointed to hear the Minister has found a directive such as this. Is the directive definitive in terms of what she cannot do? I thought I detected an element of doubt in her voice when she mentioned it. Could she make matters a little clearer?

Ms Harney

The directive is only a further reason not to provide for price controls. I would not do it anyway.

Mr. Hogan

The Tánaiste is never wrong.

Ms Harney

I should not be provocative in the run-up to Christmas. The directive referred to is Council Directive 92/49/EEC of 18 June 1992. Article 29 prohibits price control in the insurance market.

Mr. Broughan

Has any other country got a PIAB?

Ms Harney

The insurance market in many European countries is often paid for from the social welfare system. It is a different system from that which operates here. There are other models in the world where a PIAB type forum exists for settling claims. For over 20 years we have discussed an alternative to the courts-based system. When I first came to Leinster House I recall discussions taking place with the former Minister, Mr. Desmond O'Malley, about the possibility of reform in this area. One of the suggestions was to end jury trials and to end the need for two senior counsel in personal injury cases. When that happened the one senior counsel doubled his or her fee. Since the junior counsel receives two thirds of a senior counsel's fees, the fees increased. None of that has made much of a difference. This proposal which has come about after much consultation and discussion will play a significant role in helping to drive down the cost of insurance because it will drive down the delivery cost of compensation substantially. When fully functioning, it is estimated the PIAB will cost approximately €7 million to €10 million per year. Effectively, €8 million will be paid by the insurance industry. That is substantially less than the €340 million paid last year in legal and other costs in personal injury cases. Clearly, that will have an impact on the cases taken together with the measures being introduced by the Minister for Justice, Equality and Law Reform in the area of fraud, exaggerated claims and so on. Hopefully, all of that will help open up the market to new operators, particularly to niche players in the motor, public and employee liability, and property sectors.

I am not in a position to accept Deputy Morgan's amendment because of an EU prohibition on my doing so but also I do not believe it is the right way to proceed. We do not have price control on alcohol. In advance of the 1997 election, an attempt was made to control the price of alcohol. These things do not work. If we lift the control order, invariably after a couple of months the price shoots up. The market has to be able to regulate the price. We have a below cost selling ban, through the groceries order, but that is the only order of that type that exists in Ireland on price control.

Mr. Eamon Ryan

The Minister mentioned the case of below cost selling. Deputy Morgan is seeking above cost selling ban.

Mr. Morgan

I am disappointed the Tánaiste is not in a position to accept the amendment and would not be inclined to do so. My understanding is that the regulation controlling the cost of the ceiling price on alcohol is still available, it is just the political instincts of those in power choose not to use it. This Bill will prove useless to all the categories outlined, unless it delivers on lower premiums. I am concerned that as the Bill stands it may not do this.

Amendment put and declared lost.

An Leas-Cheann Comhairle

Amendments Nos. 2 and 4 are related and may be discussed together.

Ms Harney

I move amendment No. 2:

In page 9, to delete lines 28 and 29.

This is a technical amendment. Its purpose is to delete the definition of "prescribed". This is because there is no reference in subsequent sections to things being prescribed. The board can make rules about procedures under section 11 but there is no prescribing of documents for this or any other provision of the Bill. The amendment is tabled on the advice on the Attorney General for technical reasons.

Amendment agreed to.

An Leas-Cheann Comhairle

Amendments Nos. 3, 5 and 6 are related and may be discussed together.

Mr. Hogan

I move amendment No. 3:

In page 10, between lines 14 and 15, to insert the following:

"(6) For the purposes of this Act, a claimant and a respondent may nominate a third party to act on his or her behalf in relation to any matter that comes before the Board under the provisions of this Act.".

On Committee Stage I made the case that there is a great expectation that the claimant will be in a position to fill in the necessary form without being able to rely on the third party intervention of a legal adviser, a brother or sister, or any category of person in respect of helping him or her in making the claim. If it is a paper-based exercise that has to be gone through, fundamental decisions will have to be made arising from the completion of that form which may have a subsequent impact on the level of award the claimant may receive. Parking liability at this stage will ensure it is even more important that people complete the application properly without unwittingly making any particular mistake. If an incapacitated, illiterate or blind person needs direct third party intervention from family members or professionals, the purpose of this amendment is to ensure that is the case and, also when the claimant subsequently goes to court, if that is the outcome of the assessment and liability becomes an issue, that he or she will not have disadvantaged himself or herself arising from the initial application to the PIAB.

Mr. Broughan

The general content of amendment No. 6 adheres closely to the presentation by my Fine Gael colleague. There is a fundamental problem here. Clearly, the Tánaiste's colleague, the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Fahey, indicated it was important to remove the legal profession from the process so that there would not be a legal aspect to the plaintiff, assessment, respondent and decision procedure. There are fundamental basic rights involved. I have sought to address them in my amendment No. 6 which proposes that the board should communicate through a solicitor if the plaintiff has asked such a person to act for him or her in dealings with the board. Deputy Hogan's point is accurate. Given that sometimes we have to give information on medical card forms, housing applications, passport applications and so on we may well be asked in our representational capacity to fill out those forms.

I am informed that the Irish Human Rights Commission is concerned at the Bill's attempt to remove the right to personal representation. We had this discussion many years ago in regard to trade union representation. I believe workers are entitled in all circumstances to professional personal representation, if not collective representation. It is interesting to note that people were thinking about this when the former Deputy, Mr. Desmond O'Malley, was Minister for Industry and Commerce. We wanted to get out of the need for barristers in straightforward cases but it appears there is a fundamental right, if a person so wishes to have a solicitor to act for him or her. That is related to the fact that later in the Bill, the Labour Party and Fine Gael tried to provide that representatives of the legal profession would be on the board because there are aspects which may need a legal interpretation. If someone was to want personal professional representation, it would seem preferable that such would be the case. We saw the complexity of some of the issues which arose in the settlement of cases of institutional abuse. The cases before this board will be simpler but in most cases people feel that having professional representation would help at that stage.

As public representatives, we make representations for people who, some might say, could perfectly well do so themselves, but we often represent people who lack the necessary skills to make the best case for themselves. We act as their advocates although we might not have professional expertise in the areas concerned.

The right to legal representation is a fundamental aspect of this legislation. The Tánaiste is determined to ensure that this facility is not made available. I cannot see how it would damage the general thrust of the procedure at the heart of the Bill if someone wanted to have a professional legal representative to help them initiate a claim.

Mr. McHugh

This matter was discussed in great detail on Committee Stage but we must come back to it at every opportunity and try to get the Tánaiste to see sense.

I have no hidden agenda. I will say what I think and will not be hoodwinked by any organisation or interest group. My interest is in the protection of the claimant. I cannot see how the claimant's interest will be protected if we follow the route the Tánaiste has set out. It is a basic human right to deal with one's own business or to nominate a third party to deal with it on one's behalf. No arm of the State should refuse to deal with an individual or his or her representative.

Earlier in her political life when the Tánaiste was a mere Deputy and dealt with representations, I am sure people consulted her on almost every issue. I am sure she can remember how busy she was at that time. We Deputies are busy, not because we deal with legislation but because we deal with members of the public and try to represent them in situations where they cannot represent themselves. Many lack the necessary knowledge or confidence to deal with boards and bodies. If we do not bear this in mind, it will come back to haunt us. I do not wish to be accused of not highlighting this aspect at this time.

The Tánaiste's proposal is intended to save money. A claimant, even one who is expert in everything, should not have to go to the expense of putting a claim together without being compensated for that. The Bill makes no provision for compensation for a claimant's effort in putting a claim together. That is not fair. The claimant must deal with a situation which is not of his or her own making and should, therefore, be compensated. If one follows that line there is no logic in pursuing the argument that legal professionals would create extra expense. The expenses of the claimant should be met in any event.

During the debate on Committee Stage the Tánaiste said she could not understand the reason people travel such long distances to see solicitors about almost everything.

Ms Harney

I can understand it. It is a matter of loyalty.

Mr. McHugh

The Tánaiste does not understand the trust people place in their solicitors and the security that gives them. This may explain the reason she cannot understand the importance of these amendments.

When a case has been assessed by the assessment board, where does the Tánaiste think a claimant will go to have it checked out, if not to his or her solicitor? Can the Tánaiste not accept this fact of life and incorporate it into the legislation, with protections against runaway claims for legal fees?

Ms Harney

These amendments go to the heart of what we are talking about. There is no point in Opposition Deputies talking up the need to reform insurance and to establish an effective personal injuries board and then seek, through various amendments, to fillet its effectiveness before it is established. If we do as the Deputies opposite suggest and provide for legal representation, as night follows day the kind of legal bills we have seen in recent years will be repeated. There is nothing stopping anyone from engaging a lawyer or anyone else, but they will not be paid for this. This assessment board will not deal with lawyers or others. It will deal directly with the claimant. It will be a claimant friendly body.

Other boards, for example the Employment Appeals Tribunal, hold actual hearings and people are often represented by lawyers, although that was not the case in the early days. However, even there we do not provide for legal fees. We will not provide for legal representation in the way suggested. If we do, there will be no point in establishing this body. The Bill provides for assistance to be given to vulnerable citizens and minors, for example. It is right that we should do that. If a claimant wishes, a copy of the correspondence will be forwarded to a solicitor at the same time as it is sent to the claimant. However, the whole purpose of the Bill is to establish an organisation on a statutory basis which will help to settle claims in a cost-effective and efficient manner.

I repeat what I have said many times during the debate on this Bill. It takes six times longer in Ireland for a genuine claimant to get what they are entitled to than it does in Northern Ireland or Great Britain, and barristers are involved in 70% of personal injuries cases in Ireland as opposed to 4% in the United Kingdom. One of the reasons insurance costs are so high in Ireland is that we are all paying for that system through high premiums. This is neither sustainable nor necessary and it will not be provided for. No matter how often people try to argue this point with me – many of my close friends have tried to do so – I cannot concede it. I feel strongly on this matter and so does the Government. To do this would fillet the legislation before it is enacted and make the PIAB completely ineffective. It would not be cost effective and would do nothing to reduce the huge cost of delivering a claimant's entitlement quickly.

If someone has an accident at work, his or her first call will not be to the PIAB but to his or her employer. The first claim will be to the employer or to the employer's insurance company. It is only if the matter is not resolved at that level that it will go forward to the PIAB. Many cases are settled at that level every day of the week and we hear no more about them because they do not need to go down the legal route. People here have a great deal of experience of this. At the outset when I was appointing the interim board, I considered having representatives of the legal profession. If one is representing a body, one must wear one's representational hat but there are people there with legal expertise. One of the appointees to the interim board is a barrister who is also a medical doctor, Denis Cusack, and the other is a solicitor from the Revenue Commissioners, Francis Cooke. Therefore, there are at least two people with legal expertise who are not and should not be there in a representational capacity. This places a great onus on people who might seek to represent the Law Society or the Bar Council, or one person who might represent both, and would not lead to the proper and effective functioning of the PIAB.

I have also considered a suggestion from Deputy Conor Lenihan that an Oireachtas Member be appointed in a representative role. Senator O'Toole is there as a representative of the Irish Congress of Trade Unions. We should not politicise this board and to put somebody in, from whatever side of the House, would politicise it. I decided against this, although I would be better disposed to putting a public representative on it than anyone wearing a particular professional hat.

Mr. Hogan

After seven years in office in the Tánaiste's position, one's judgment would be somewhat clouded on various practical matters. If the Tánaiste thinks the insurance representatives will not represent their sectoral interests, she is more naive than I thought. She will have to put representatives on the board when it extends to road traffic accidents and public liability cases. Whatever expertise is required must be present on the board.

Ms Harney

It must not.

Mr. Hogan

That is what the Tánaiste said in the past. She has obviously changed her mind.

Ms Harney

It is not what I said. There is one representative of the IIF.

Mr. Hogan

She said the insurance companies had to be represented to ensure they would help to reduce premiums by keeping the PIAB members and others on the straight and narrow.

Ms Harney

I never said that.

Mr. Hogan

Insurance companies are represented on the board and have a vested interest.

Ms Harney

If the Deputy is talking about the chairperson, she comes from CIE.

Mr. Hogan

She is a claims manager and has a vested interest.

Ms Harney

She is from an insurance company. She has a vested interest in the public, the same interest as the Deputy and I.

Mr. Hogan

We are talking about the public interest here, not vested interests. The Tánaiste has already nominated people to the board who have vested interests.

Ms Harney

There is one person from the IIF.

Mr. Hogan

Can I make my point?

Ms Harney

I was trying to be helpful. It is Christmas and I want to help.

Mr. Hogan

I am trying to remove the Tánaiste's cloud of naiveté at Christmas time in order to be charitable. If she thinks that insurance companies will be in some way charitable to her or the board by not being representational on the PIAB, she is grossly mistaken. The purpose of this amendment was to treat people fairly, to ensure that the occasional applicant seeking assistance for the purpose of making a proper application on a very serious matter, namely quantum and costs for an accident, would get help to do so. That is fair play, and I do not need a lecture from the Tánaiste about reintroducing the legal profession into the process. She has already done that herself.

Ms Harney

I did not.

Mr. Hogan

She introduced an amendment to section 12 which will allow the claimant to go to the High Court to get an order to preserve the site of an accident.

Ms Harney

In very exceptional circumstances.

Mr. Hogan

We are making law here. There is no such thing as exceptional if it is allowed to happen at all.

Ms Harney

We are not making new law as the Deputy well knows.

An Leas-Cheann Comhairle

We cannot repeat the Committee Stage debate now.

Mr. Hogan

I am trying to expose the Tánaiste's hypocrisy or lack of definition on this issue. On the one hand, she is trying to keep lawyers out of the system, with which we all agree as that was the original objective but on the other hand, she has succeeded in bringing legal representation back into the equation in another section of the Bill. She is against legal representation in this section of the Bill in order to give fairness to the citizen and we want to ensure that people are treated fairly, cheaply and efficiently. There is a very important issue whereby people who have an accident through no fault of their own get help to make a proper application when liability is parked. This is a crucial point because people are going into a system where liability is not an issue at this stage.

It is even more important that the citizen or the claimant would be able to put his or her case well in the paper-based approach through the PIAB. Insurance companies represented on the board which will decide that liability is an issue for them and that they are going to fight it all the way will be armed with all the necessary engineering, medical and legal expertise and the claimant will be obliged at his or her own cost to fight the Big Brother insurance company. The insurance company will be able to pass on its costs in the form of higher premiums or discharge its obligation corporately rather than individually.

The Tánaiste mentioned on Committee Stage that there would be a helpline for the PIAB. We did not hear the detail of what help would be required from the board. It is very important that this is beefed up considerably to ensure that the citizen is not unfairly treated in this application. The right of representation as mentioned by Deputy Broughan in reference to Article 6 of the European Convention on Human Rights could come back to haunt the Tánaiste in the context of this section, if someone takes a test case. We are highlighting these issues to tease them out and ensure that we get the balance right. I accept that the Tánaiste has a view; I have a different one but I share her view on ensuring that we have a cost-effective, efficient system in which litigation is as cheap and efficient as possible but is nevertheless fair to everybody. I will not press the amendment because we have made our point very carefully but the Tánaiste has set herself on a particular course and has unfortunately contradicted herself in another section on Committee Stage.

Mr. Broughan

May I respond on amendment No. 6?

An Leas-Cheann Comhairle

I took it that Deputy Hogan was replying to the debate. All the amendments were discussed together.

Mr. Broughan

Amendment No. 6 was in my name.

An Leas-Cheann Comhairle

Yes, but the Deputy should have offered before.

Mr. Broughan

I am offering.

An Leas-Cheann Comhairle

Although it is not strictly correct, I will allow the Deputy to make a brief comment.

Mr. Broughan

I can understand the Tánaiste is afraid she will open a Pandora's box that would devastate the Bill and bring us back to square one but in our amendment we were focusing on the narrow remit whereby somebody seeking professional representation in his or her dealings would be accorded responses from the board. That does not seem to be available. The broad point still holds that liability comes in and a claimant may be strung along for quite a while and would finally have to go for professional help if the case went to the courts when he or she took on the full might of the insurance company. The point is well made and I can understand to some extent where the Tánaiste stands, given the lengthy debates we have had on this, the report of the Motor Insurance Advisory Board and so on over the years. She wants to cut the knot of the very expensive litigation which accounts for approximately 40% of awards, but at the basic level this is a fundamental right. Deputy Hogan is correct in saying that it could come back to haunt us.

Amendment, by leave, withdrawn.

Ms Harney

I move amendment No. 4:

In page 10, to delete lines 15 to 17 and substitute the following:

"5.–(1) The Minister may make regulations in respect of anything referred to in this Act as being the subject of regulations or for the purpose of enabling this Act to have full effect.".

Amendment agreed to.

Amendment No. 5 not moved.

Mr. Broughan

I move amendment No. 6:

In page 11, line 7, after "proceedings" to insert "save that where the claimant nominates a solicitor, the Board shall communicate with the claimant through the solicitor so nominated".

Amendment put and declared lost.

An Leas-Cheann Comhairle

Amendment No. 20, 22 and 26 are related to amendment No. 7 and they may be discussed together.

Mr. Hogan

I move amendment No. 7:

In page 11, line 29, after "claim" to insert "after liability is admitted by the respondent in open correspondence".

The amendment is concerned with whether liability should be an issue in the context of the Personal Injuries Assessment Board. In the interest of the citizen and the claimant, liability should be decided when it becomes an issue before the board. It would be a cause of difficulty if the issue was to be parked at the time of an applications for assessment because if a case subsequently goes to court and the question of liability becomes a major issue, it puts the claimant at a major disadvantage later, given that he or she does not know where he or she stands in regard to liability, especially as a long period of time might have elapsed while a case was under consideration by the board. Liability should be admitted by a respondent in open correspondence at the earliest possible stage after it reaches the Personal Injuries Assessment Board stage.

The Tánaiste introduced an amendment to section 12 on Committee Stage, which allows the claimant to seek an order for inspection and preservation of the site of an accident. This would allow her to accept this amendment. If she does so it will effectively bring the issue of liability into play at an earlier stage. The Tánaiste expressed reservations about doing this on Committee Stage, but she might have reflected further on the matter in the meantime.

If liability could be resolved at the earliest possible stage, it would give more certainty in respect of the outcome of cases and achieve earlier settlements. It would result in a cheaper, more efficient and speedier resolution of cases rather than having to go to court. Insurance companies have considerable resources at their disposal, which a claimant would not have, except by way of incurring large expense. In fairness to a claimant and to achieving a speedy resolution of a case at the earliest possible stage, liability should not be parked at the stage of the Personal Injuries Assessment Board application.

Mr. McHugh

We discussed this issue on Committee Stage. Having reflected on it in the meantime, I still believe the issue of liability in this context is a mess. The way in which it will be dealt with is unfair to the claimant. It is very unfair for a claimant to be under the false impression that his or her application will be assessed by the PIAB and a conclusion reached only to find that the respondent can withdraw admittance of liability. This issue can give rise to two scenarios. One is where a respondent is liable, takes a chance and then weighs up the odds in respect of the outcome, and if it is not to his or her satisfaction, everything is thrown into an ensuing court case. An interpretation of such a scenario is that the facility to park the liability issue means a respondent can be treated in a softly, softly manner at the expense of the claimant. In a sense, the respondent is being facilitated to abuse the mechanisms of the State.

The other scenario is that a respondent is not liable but he or she will take a chance because it might be worth it, given that an award decided by the PIAB might be less costly than it would be to pursue the claim in court. Many bodies have put forward the case that this is one of the reasons for the high cost of insurance. It is only one of the reasons that claims are not being fought and pursued by insurance companies in instances where they fully believe that the claim is false.

What is the Tánaiste doing to address this practice? It is being pointed out to her that in this legislation she is facilitating fraudulent and false claims. She referred on Committee Stage to the fact that insurance companies might find it cheaper to go this route, but that is wrong. We should be going the route of rooting out everything that is wrong. If something is fraudulent, it should be pursued until it is proved to be wrong. That would eliminate fraudulent claims, as would awareness among members of the public that this is what is happening. If a claim is false, it should not be allowed to proceed. Legislation should not give protection to a false claim. That is what is happening here.

Mr. Broughan

A related amendment No. 20 in my name states: "In page 12, line 12, after "states" to insert "in open correspondence to the claimant that the respondent accepts liability for the claim and states". Amendment No. 21, also in my name, is also closely related.

I agree with my colleagues that the Bill, as currently framed, could result in a grave injustice to a claimant. An investigation on the liability issue could end up being expensive and it would certainly need to be done rapidly. A claimant should be required only to show his or her hand in this regard if a respondent is admitting liability, but there is no mechanism to recover the cost involved if a claimant proceeds, investigates liability and subsequently accepts an assessment. There is a fundamental problem in the way the procedure in this regard would operate under the board. The degree of freedom given to a respondent would seem to allow a situation to develop where a serious injustice could happen. The claimant should know very early in the process if liability is being accepted as this will achieve the purpose for which the board is being established, which is to bring claims to a conclusion. What is proposed is of fundamental importance and I urge the Tánaiste to reconsider her position.

Ms Harney

I will not repeat all I said on this matter on Committee Stage. If liability has to be admitted before one can go through the PIAB process, that process would not work because nobody would use it. If somebody is seriously suggesting that an insurance company would use the PIAB process, incur the costs associated with it and then decide that it has no faith in it and that it wanted to open up the liability issue, I do not accept that. I do not believe anybody who would pay for the PIAB process would agree to an assessment being done by the PIAB and then subsequently decide to make liability an issue in the context of court proceedings.

As for fraudulent claims, I have gone on record on many occasions urging insurance companies to take a more medium-term view of these matters rather than the short-term view they often take. They regularly took the view that in some cases it is quicker and less expensive to settle, rather than go down the costly route of court proceedings. Indeed many of them did not get encouraging results from the courts process. That has changed in recent times. We have had some excellent decisions from the Judiciary in recent weeks on fraudulent claims.

When the Minister for Justice, Equality and Law Reform, Deputy McDowell, succeeds in having his legislation on fraudulent and exaggerated claims passed, there will be a significant change among insurers. We will pursue at every level those who make fraudulent and exaggerated claims. The new legislation will ensure that claims fall, except in exceptional circumstances, where someone either exaggerates a claim or makes a fraudulent claim. That legislation will go a long way towards rooting out the high level of insurance fraud which we all believe exists in Ireland. The good news is that the number of claims is down substantially in recent times and will continue to decrease.

If liability were to be admitted at the outset, this legislation would not get off the ground. The most appropriate thing to do is to park the liability issue. The PIAB will not deal with any legal issues, nor should it do so. It is not equipped to do so. It is there simply to decide on the entitlement of someone who has suffered an injury as a result of an accident. The PIAB exists to do nothing more or less than that. It is not there to deal with liability or other legal issues that rightly belong in the realm of the courts.

Amendment put and declared lost.

Mr. Broughan

I move amendment No. 8:

In page 12, line 1, after "correspondence" to insert "(other than without prejudice correspondence)".

This is a brief technical amendment to make the legislation clearer. It relates to page 12, line 1, and the copies of correspondence between the claimant and those claimed against in the application for assessment. I wish to insert the words "(other than without prejudice correspondence)". The PIAB must be given a right of access to any correspondence, but presumably this can mean only open correspondence. The Labour Party believes this amendment would make the Bill a little clearer.

Ms Harney

I said on Committee Stage that I would have this matter examined, and I discussed it with the Attorney General. On his advice I will not accept the amendment because there is no need to do so. Nothing in the PIAB process can prejudice subsequent litigation. There is no doubt about that. The documents the PIAB will require will fall under its own rules and procedures and will include medical evidence, any correspondence between the respondent and the claimant, earnings details from the Revenue Commissioners and so on. That is the sort of documentation of which we are speaking. Unfortunately, on the advice of the Attorney General, I cannot accept the amendment.

Mr. Broughan

The Labour Party still has some reservations about this matter.

Amendment, by leave, withdrawn.

Mr. Broughan

I move amendment No. 9:

In page 12, line 6, after "injuries" to insert "and whom the claimant proposes to call as a witness in the event of bringing proceedings in respect of the claim".

This amendment follows from the fact that the PIAB can operate only if it is to examine a claim on the same basis as a court would. A court does not require disclosure of medical reports from doctors whom the plaintiff does not intend to call. For purposes of clarification, it would seem better to add this brief amendment to this part of the Bill.

Ms Harney

I could make comments very similar to those I made about the last amendment tabled. Under the current regime in this area, it is now very rare to call doctors as witnesses. Much of the work that used to be done in this way is now done by means of an exchange of reports, which are usually agreed. The proposed amendment is in any event inappropriate as the PIAB is not restricting parties' decisions in any subsequent litigation.

Amendment, by leave, withdrawn.

Mr. Hogan

I move amendment No. 10:

In page 12, between lines 25 and 26, to insert the following:

"(6) As soon as practicable after an application is made by a claimant under subsection (1) the Board shall advise the claimant in writing that—

(a) (i) the respondent's consent to an assessment being made under section 14(1)(a),

or

(ii) the subsequent making of an assessment by the Board, does not constitute

or have the effect of constituting an admission of liability by the respondent,

(b) it would be desirable for the claimant to seek legal advice in relation to the matters giving rise to the relevant claim at the earliest possible opportunity.

(7) Subsection (6)shall not be read as requiring the Board to be satisfied that the claimant has taken legal advice before proceeding to make an assessment where the circumstances addressed in section 14(1) apply.”.

This amendment is designed to make more exact the obligations of the PIAB to a claimant, ensuring that in advance of the application being made to the PIAB, the board would set out clearly to the claimant what is actually involved in the process, and what the claimant is becoming involved in by making an application. If the Tánaiste does not wish to accept that a third party intervention is required in order to assist someone making an application for assessment, then the obligation should be on the PIAB to ensure the claimant is fully aware of the process in which he or she will become engaged.

This is a reasonable amendment. It would give clarity to the responsibilities of the PIAB to the claimant. It would not affect liability, any reference to which the Tánaiste objects to in amendments. Liability would remain parked. The amendment would mean that the claimant could get some advice before making an assessment claim. It would allow the claimant full knowledge of what was involved and what type of assistance would be required by the claimant if an application was made. It would give clarity to that position and put a certain onus back on the PIAB to ensure that that was the case.

Ms Harney

Unfortunately, I am not in a position to accept this amendment, one reason being that by means of paragraph 6(b), it invites claimants to seek legal advice. Deputies have been circulated with a draft copy of the layperson's guide which the PIAB has produced in consultation with other parties. It makes quite clear that to which a claimant is entitled. Furthermore, the helpline referred to by Deputy Hogan in an earlier amendment, or at any rate in his response, will provide the advice called for in the amendment. There will be a duty of care on the PIAB towards vulnerable claimants, minors and others. Those provisions, along with the helpline, the assistance to be provided and the training the PIAB staff will get in dealing with citizens generally and vulnerable claimants in particular, will be more than adequate.

It is not necessary to write an amendment of this kind into the Bill. That it would encourage claimants to seek legal advice on matters giving rise to the relevant claim at the earliest possible opportunity is another reason I am not inclined to accept the amendment.

Mr. Hogan

The Tánaiste refers to vulnerable categories whom she wants to ensure are in no way disadvantaged when assessments are made. She referred to the helpline as one of the ways in which they might be assisted. I cannot see a vulnerable person using a PIAB helpline in any way. That is the reality we deal with. There are categories in our society who are vulnerable under the widest possible definition of vulnerability and who unfortunately will not do anything without getting someone else to act on their behalf. That is the reason in an earlier amendment I tried to address the issue without wanting to get into the expensive machinery of professional groups being involved at an early stage but in order to give the claimant in the vulnerable category access to justice and access to the assessment board in a well-informed and appropriate manner. Once an application is made, the PIAB should write a letter to lay out the criteria to the claimant rather than having the claimant, particularly a vulnerable person, relying on finding out as he or she goes along.

Ms Harney

Claimants will receive the guide.

Mr. Hogan

This is particularly relevant in view of the fact that liability is parked but 15 or 21 months later, the claimant may be faced with a challenge on liability. I do not wish to see this situation arise.

I acknowledge the Tánaiste's reference to legal advice. She has a strong hostility to anybody getting legal advice or the Personal Injuries Assessment Board—

Ms Harney

I have a hostility towards paying for it.

Mr. Hogan

I am aware of that. I can foresee a situation arising very quickly where the insurance companies will save money because they will not have to pay out for legal advice to the claimant but the claimant will pick up the tab in any case. In addition to their insurance policy, in the event of a claim, they will need to pay for all the medical, engineering or legal professional advice. The person with the largest cheque book will get the best representation. If that is what the Tánaiste wants, that is what she is getting.

Ms Harney

They will not be represented.

Acting Chairman (Mr. Sherlock)

Is Deputy Hogan pressing the amendment?

Mr. Hogan

I will withdraw the amendment because I know I am fighting a rearguard action against an obstinate lady.

Ms Harney

There has not been a single division.

Amendment, by leave, withdrawn.

Acting Chairman

Amendments Nos. 11 to 16, inclusive, are related and may be discussed together by agreement. Is that agreed? Agreed.

Ms Harney

I move amendment No. 11:

In page 12, line 34, after "invoke" to insert ", subject to and in accordance with this section,".

We had a long discussion on this matter on Committee Stage. I have since had a long discussion with the Attorney General. I am pleased to introduce further amendments lest there be any doubt about what we are doing.

Mr. Hogan

This from a lady who did not want to amend the Bill at all.

Ms Harney

No, I want the Bill to be right.

Mr. Hogan

Senator O'Toole and the Tánaiste.

Ms Harney

I accept the Senator gave us a lot of assistance.

Mr. Hogan

There were also 82 amendments to the companies Bill.

Ms Harney

Mine is a very open-minded Ministry. We like to get it as correct as possible. Given that the Deputy has been a long time waiting to get this job, I would like to take some of his amendments on board if it makes him feel good.

Mr. Hogan

The Tánaiste stated recently that she wanted to get out of the job.

Ms Harney

I want to move on to another one when I have completed my task here.

Mr. Broughan

What Department would be the Tánaiste's preference?

Ms Harney

I do not intend to reveal that this evening. I might frighten too many people.

This amendment is a further amendment to a Government amendment on Committee Stage and is one of a series of amendments which I am proposing. The earlier amendment was debated and it was the subject of some confusion. The prime purpose of the earlier amendment was to clarify that although a claimant had to go to the PIAB before bringing proceedings, these proceedings did not encompass the type of orders referred to in the amendment. The purpose of this amendment is to deal with the technical drafting issue as advised by the Office of the Attorney General.

Amendment put and declared carried.

Ms Harney

I move amendment No. 12:

In page 12, line 37, after "jurisdiction" to insert ", subject to and in accordance with this section,".

Amendment agreed to.

Ms Harney

I move amendment No. 13:

In page 12, line 40, after "is" to insert "provided for by rules of court or".

Amendment agreed to.

Ms Harney

I move amendment No. 14:

In page 12, to delete lines 43 to 45 and substitute the following:

"for the purpose of defeating the rights of another arising out of the relevant claim or the dissipation of assets for that purpose and an order requiring evidence to be preserved.".

Mr. Hogan

Will the Minister explain the reason for this amendment?

Ms Harney

It is to provide further clarity.

Mr. Hogan

Is it correcting a mistake made?

Ms Harney

It is to ensure exact clarity is provided.

Mr. Hogan

Clarification from the Minister means correcting a mistake.

Ms Harney

No. This is legal clarification restating the current law.

Mr. McHugh

This is an amendment dealing with preservation of the scene.

Ms Harney

The preservation of evidence will be dealt with in the next amendment.

Mr. McHugh

I am sure the Minister realises it is totally useless. Nobody will know about the amendment tabled on Committee Stage by the Minister. Who will be aware of what the legislation contains if people do not have the benefit of a solicitor to advise them? This is being done for the optics.

Ms Harney

This will only be used in very exceptional circumstances and I am quite certain that in the circumstances, a lawyer will be involved.

Mr. McHugh

It will never be used.

Amendment agreed to.

Ms Harney

I move amendment No. 15:

In page 12, between lines 45 and 46, to insert the following:

"(4) In relation to the invocation of the foregoing jurisdiction of the court the following provisions have effect—

(a) the application for the order concerned shall be made by motion on notice or, as appropriate, ex parte motion,

(b) without prejudice to the principles or rules that govern generally the exercise of that jurisdiction, the court shall not exercise that jurisdiction to make any order (not being an order relating to the transfer or dissipation of assets) unless it is satisfied that–

(i) the making of the application therefore is bona fide and for the sole purpose of ensuring the fair and just disposition of any proceedings that could be brought in the event of the issue of an authorisation referred to in subsection (1), and

(ii) the making of the order is required so as to enable the fair and just disposition of those proceedings, and the court shall ensure that the manner in which any such application is dealt with does not prejudice any procedures which are being or may be followed under this Act in relation to the relevant claim,

(c) on the hearing of any such application the court shall have power to grant the relief sought or, subject to this section, make any other interlocutory order that is appropriate to the application or may adjourn, from time to time, the hearing of the application or dismiss the application and, in any of the foregoing cases, may make such order as to costs as it considers appropriate,

(d) the person making any such application shall be subject to the same duties as he or she would be subject to if the application were to be made in the course of proceedings brought in respect of the relevant claim and may (in addition to any undertaking he or she may be regarded as having given by operation of law) be required to give such undertakings as the court may specify in the circumstances,

(e) in the event of proceedings being brought in respect of the relevant claim pursuant to an authorisation referred to in subsection (1), any order made in exercise of the foregoing jurisdiction shall be deemed to be an order made in the course of those proceedings and the court may, accordingly, continue to exercise jurisdiction in respect of the order, and

(f) in the event of no proceedings being brought in respect of the relevant claim, the court may make such order as to the discharge of the order referred to in paragraph (e), to any other matters in consequence of the order so referred to and to the costs of the matter as is necessary or appropriate in the circumstances.”.

Mr. Hogan

Will the Tánaiste explain the reason six or seven more paragraphs are being inserted into the legislation?

Ms Harney

Has the Deputy read the detail of what we are doing in this case?

Mr. Hogan

I have read this.

Ms Harney

It makes matters much clearer.

Mr. Hogan

I suggest the Tánaiste explain it to the House.

Acting Chairman

Is the Deputy putting a question?

Mr. Hogan

No, I want an explanation from the Tánaiste.

Ms Harney

The debate on Committee Stage was on the issue of why this was being done at all. To prevent any misunderstanding, we wish to ensure that nothing in the PIAB legislation will take away from the rights citizens already possess under the rules of the superior courts. It is being restated here and clarified that it can only be used in very exceptional circumstances. I understand that is the case at present. This only arises where people may be of the view that evidence might be destroyed and not preserved. I have discussed this matter at length with the Attorney General and others and am satisfied it does not do all the things Deputy Hogan and others predicted it might do.

Mr. Hogan

I thank the Tánaiste for explaining what she is doing. She is effectively reintroducing the legal profession into the process at an earlier stage than would normally have been the case where liability was an issue rather than being parked. She has introduced a new amendment on Committee Stage and further clarified it here on Report Stage. The claimant can now go to court to have the scene of the accident preserved. She indicates that this will be an exceptional situation. I can assure the Tánaiste it is evidence of gross political naiveté if she believes her amendment introduced on Committee Stage and reinforced on Report Stage will not be fully exploited by people if they have the sufficient resources.

Amendment agreed to.

Acting Chairman

As it is now 7 p.m., I am required to put the following question in accordance with an order of the Dáil of this day: "That the amendments set down by the Tánaiste and Minister for Enterprise, Trade and Employment and not disposed of, including those in respect of which recommittal would in the normal course be required, are hereby made to the Bill, that Fourth Stage is hereby completed and that the Bill is hereby passed."

Question put and agreed to.

Ms Harney

I thank the Opposition spokespersons, including Deputies Hogan and Howlin, who have taken great interest in this legislation. I thank them, in particular, for facilitating the speedy passage of the Bill through the House. Notwithstanding some of the debate, I realise that Deputies went out of their way to facilitate my request to have the legislation dealt with as quickly as possible. I appreciate this.