Personal Injuries Assessment Board (Amendment) (No. 2) Bill 2018: Report and Final Stages

I move amendment No. 1:

In page 8, to delete lines 13 to 29.

As we discussed on Committee Stage just before Christmas, this Bill contains a number of welcome proposals, including provisions that will see an updated book of quantum published every three years, efforts to modernise the Personal Injuries Assessment Board's system by using more electronic means of communication and changes to ensure better co-operation with the PIAB. Unfortunately, the cost of insurance for private individuals and businesses across Ireland continues to be a serious problem about which this Government is not doing enough. The Alliance for Insurance Reform recently said that while insurers and lawyers squabble over the blame game and the Government drags its feet on vital reforms, Ireland's small businesses, charities and community groups pay the price with unnecessarily excessive insurance costs. This Bill will introduce some small changes but is nowhere near the scale of action needed to tackle the problem. I ask the Minister to outline the action she intends to take in this Dáil term to address the major problem of rising insurance costs for business.

While most provisions in the Bill are welcome, we have previously registered our concern with section 13 in particular. Therefore, I have tabled one amendment which seeks to remove section 13 in its entirety from the Bill. Section 13 aims to insert a new section into the 2003 Act which would force the PIAB to remit to the Minister for Business, Enterprise and Innovation any moneys in excess of those authorised to be retained by the Minister, with the consent of the Minister for Public Expenditure and Reform. The latest figures show that the reserves of the PIAB stood at €17,449,908 in 2017.

PIAB is an independent State body which assesses personal injury compensation claims. Since its establishment, PIAB has been a successfully self-financing organisation. In 2011, it repaid the Exchequer the €6.9 million it cost to establish the organisation. The successful self-financing structure should be maintained to ensure the body remains fully independent from Government, which is particularly important given the quasi-judicial function PIAB provides.

In addition to protecting the independence of PIAB, these reserves could be re-invested by PIAB to improve the operation of the body, for example, through investments aimed at reducing the length of time it takes to assess a claim, which currently stands at 7.3 months. The Minister should also examine other areas where the funds could be used positively to extend the functions of PIAB. For example, PIAB could be given the powers to deal with Garda compensation claims. Currently, every Garda compensation claim, regardless of the value, must be heard in the High Court, resulting in considerable legal costs for the taxpayer. That is only one example of how the money could be used by PIAB to achieve overall savings for the Exchequer. Has the Minister examined any new avenues for PIAB such as this?

The reserves built up by PIAB have been through its diligent and conscientious work. We should encourage State agencies and bodies to follow this example by delivering their services on budget, and if reserves are saved they should be re-invested in the agencies to increase capacity further and improve services for citizens. The powers set out in section 13 will set a bad example for other State agencies and bodies because if they run a tight ship and deliver a valuable service for the State on budget with a surplus, they can expect their reserves to be stripped and their financial efficiency swallowed up for other projects with zero financial control.

I have a specific question on financial control that I hope the Minister will clarify. Is PIAB's €17 million in reserves, or a portion of it, intended to be used by the Government to part-finance the €50 million that needs to be found in the other Departments because of the spiralling cost of the national children's hospital? I would be concerned if that was the case. The Minister emptying the reserves of PIAB will not benefit PIAB or people using its services and, therefore, we oppose this part of the Bill. On Committee Stage, Deputy Kelleher expressed his concerns about the section and I hope he and his party will support the amendment.

I thank the Minister for bringing forward the Bill, which will bring some positive changes, and I stress the need for far greater action on premiums being charged by insurance companies as they have a detrimental impact on many businesses across the State.

On the cost of insurance, the Government believes it is vitally important that consumers and businesses can obtain insurance cover at a reasonable and fair price. The average cost of motor insurance has fallen consistently since the middle of 2016, with the most recent CSO data for November 2018 indicating that private motor insurance premiums have decreased by almost 23% since peaking two years previously in July 2016, while private motor insurance premiums have decreased by 7.6% in the past 12 months. This follows the establishment of the cost of insurance working group, which published a report on the cost of motor insurance in January 2017 containing 33 recommendations and 71 associated actions. A key conclusion of the cost of insurance working group was that there was no single policy or legislative silver bullet to address immediately across the board the problem of rapidly rising insurance premiums. The measures contained in the Personal Injuries Assessment Board (Amendment) (No. 2) Bill, along with the implementation of the recommendations in the report of the cost of insurance working group and the reports of the Personal Injuries Commission will contribute to a better-functioning personal injuries claims environment and should help to deliver reduced premiums for consumers and businesses.

Section 13 implements a recommendation of the Comptroller and Auditor General, who provides independent assurance that public funds and resources are used in accordance with the law, managed to good effect and properly accounted for and that they contribute to improvement in public administration. As Minister for Business, Enterprise and Innovation, I cannot ignore a recommendation of the Comptroller and Auditor General, who is a constitutional officer of the State, nominated and appointed by Dáil Éireann. I am confident that the wording of section 13 provides that the Minister will have regard to the operational, capital and contingency costs of PIAB when determining the sum to be retained and will ensure that PIAB will have sufficient funds to carry out its statutory functions.

There are other checks and balances in the system to ensure that PIAB will have sufficient funding to carry out its statutory functions, such as the oversight role of the Oireachtas Joint Committee on Business, Enterprise and Innovation, when the Minister is presenting on the Department's Estimates during the year and through the role of the board of PIAB. Section 13 inserts a new section, 74A, in the 2003 Act. The Comptroller and Auditor General recommended that the Department and PIAB agree an appropriate level of revenue reserves to be retained by PIAB and the basis for holding such a reserve. The Comptroller and Auditor General also recommended the introduction of appropriate legislation to address excess funds held by PIAB. Legal advice obtained by the Department and independently by PIAB is to the effect that legislative change is required to enable the board to remit excess moneys to the Exchequer. The board is anxious that the legislative change is made in order that moneys can be remitted to the Exchequer as soon as possible.

Section 13 provides for a reserves policy for PIAB, and that PIAB shall remit to the Minister for the benefit of the Exchequer any moneys in excess of those authorised to be retained by the Minister with the consent of the Minister for Public Expenditure and Reform. The Bill specifically provides that the Minister shall have regard to the operational, capital and contingency costs of PIAB when determining the sum to be retained. I assure the Deputy that PIAB will have sufficient funds to carry out its statutory functions. The amount to be retained will be agreed with PIAB, having regard to its operational, capital and contingency costs. We are all aware that PIAB fulfils an important role as it facilitates the objective assessment of damages at a much lower delivery cost and in a far shorter timeframe than through litigation. It is in all our interest, therefore, that it is properly resourced.

PIAB is self-funding by fees generated from claimants and respondents and it has sanction for a full complement of 80 staff. Its board, which is directly responsible for leading and directing PIAB's activities, approves the budget for PIAB each year. Detailed annual budgets are prepared and agreed internally by the executive management team of PIAB prior to being brought to the board for review, consideration and approval. The board has a duty to supervise the discharge of the delegative functions and in this regard it will ensure there is sufficient funding to do so. The PIAB financial accounts are audited by the Comptroller and Auditor General each year. When PIAB was established, it faced a number of legal cases challenging certain aspects of the legislation and the way in which PIAB operated. It was considered prudent that PIAB retain reserves to meet these challenges as the cost would be significant. The test cases and the numerous link cases were subsequently dismissed.

In 2011, PIAB refunded its establishment cost of €6.9 million to the Exchequer. Each year, PIAB decides on its budget, which has been in the region of €10 million to €11 million over the past number of years. As mentioned earlier, PIAB is self-funding. Its income budget is derived with the assistance of a forecast model which uses statistical regression analysis to project volumes. PIAB will continue to decide its budget.

The effect of the section is that the Minister for Business, Enterprise and Innovation, with the consent of the Minister for Public Expenditure and Reform, will agree with PIAB the appropriate level of reserves that PIAB can retain, taking into account its operational, capital and contingency costs. When a reserves policy is in place, it is intended that PIAB will retain in its bank account an agreed amount of reserves over and above the budget it needs for its operational day-to-day activities. PIAB is independent in the exercise of its statutory functions, and the Minister is not permitted in his or her executive function to interfere in any way with the day-to-day operations and functions of PIAB. Section 74 of the Personal Injuries Assessment Board Act 2003 provides a role for the Minister in the provision of funds to PIAB.

For the reasons I have outlined, namely, that section 13 implements a recommendation of the Comptroller and Auditor General, who is a constitutional officer of the State, I ask the Deputy to withdraw his opposition to the section.

We will not withdraw the amendment and will be pressing it.

In her response the Minister spoke about car insurance a lot but she did not speak about small businesses, the cost of doing business and the costs of premiums. All Members have met with business groups and community groups that are struggling. We need to address the issue of the costs of insurance for these groups also. I agree with the Minister that the Personal Injuries Assessment Board will have enough money to perform its statutory function - and nobody disagrees with that - but the current wait to assess a claim is at 7.3 months. If the PIAB has additional funding we believe it should be able to ring-fence that fund to deliver the best service it can possibly give.

Businesses are not seeing a reduction in their premiums. This is what they are telling us. We meet them all the time, and I am sure the Minister has met them also. These are the reasons we believe the PIAB should hold this money. It should be ring-fenced for the PIAB and it should decide if it can deliver a better service. We want to make sure the PIAB retains the money because we believe it will have an impact on insurance premiums. A better service could be delivered and legal costs reduced to insurance companies if that money is used by the PIAB in the way we want it to work. This is why we are going to press this amendment.

Would other Members like to come in? I invite Deputy Kelleher.

I expressed some reservations about this issue on Committee Stage on foot of Deputy Quinlivan's amendment. Having studied it and analysed it, and having read the recommendations in the context of the Comptroller and Auditor General's recommendation, I believe that we do not have to have a huge reserve for the PIAB to operate. Any excess moneys should be returned to the Exchequer. That is a reasonable point as long as the guarantees are given by the Minister to the House in terms of the operational and capital costs and the contingency reserve that would be required for the PIAB to function normally in its day-to-day business and in its further strategic planning.

There is no doubt that we do not need undue delays or for us to read in a PIAB annual report that waiting times for assessments have been further lengthened because not enough money has been allocated. We need assurances - and the commitment should be given - that this amendment is unnecessary, bearing in mind that it was put down for the reasons we all have, namely, to ensure that the PIAB is a functioning entity that can carry out its duties in a timely manner and with a strategic plan in front of it.

The PIAB has been around for some time and the broader issue is the continually escalating award system in place for personal injury claims. It appears to be the case that one award sets a precedent and then it seems to continually creep up in personal injuries' assessments. Ireland is completely out of kilter with European norms and completely out of kilter with the UK in personal injuries' assessments and the awards made for similar injuries. I do not believe that the Irish neck is any stronger or weaker than the British or European neck but we have this continual increase in personal injury awards, which is causing alarm among businesses and among individuals who take out motor insurance. Those people are law abiding in that they have an obligation to have liability cover but if they have a claim it seems to be for inordinate amounts.

I have said previously that fraud is not a victimless crime. In the insurance context, insurance scams are not a victimless crime. They impact on businesses and on the ability of a business to employ people and to function. To put it mildly, we have been lethargic in our approach to addressing this issue. While I believe this amendment is unnecessary for making sure that the PIAB has enough resources available to it, the broader issue is the support from Government through policy and resources to ensure we do not have abuses carried out continually in the insurance business by fraudsters and chancers.

When one speaks with those who are insuring businesses and insuring motorists there is no doubt that fraud is no longer anecdotal; now there is empirical evidence that there is wholesale abuse and fraud in the system. It is resulting in increased costs to motor insurance cover and business public liability cover. For all of those reasons the PIAB is one particular area that we must address to ensure it can make timely assessments and awards. The PIAB can take out the costs that would be incurred if cases were taken through the courts where they are more robustly defended and have extra costs incurred. The broader issue of fraud and claims made off it must be addressed.

Two recommendations were made previously. One recommendation was that a Garda insurance fraud unit be established. I am still of the view that this should be done, and that the Minister is wringing her hands of this particular proposal. The insurance companies could make a contribution to the Exchequer, or directly to the Garda fund. I am not quite sure how it could be done but equally I believe that something must be done to investigate continual fraud by individuals who see it as just another money-making racket.

If a person walked into a shop, jumped over the counter and robbed a few euro from the till there would be a Garda investigation and probably a criminal sanction. However, a person can walk into the same shop, fall in the toilet area and make a fraudulent claim but nothing happens with regard to a sanction. The person goes to the court and if he or she is awarded compensation it is better again for the fraudster. If the person is not awarded compensation the case is just struck out and that is the end of it. There are no prosecutions for perjury or for fraudulent claims presented to the courts by chancers and criminals. I put it to the Minister that she and her Government have been very slow in accepting and recognising this fact, which is no longer based on anecdotal evidence and is supported by the empirical statistics to which the Minister and all of us have access. It is now time for us to send a very clear message to law-abiding people that the State, through the Garda Síochána, the courts and the prosecution services, will stand by people who are doing their duty in taking out motor, civil and public liability insurance. That is an obligation the Minister should take seriously and the Government should support her in that endeavour.

I will not support the amendment tabled by Deputy Quinlivan because a recommendation has already been made by the Comptroller and Auditor General as the constitutional officer. The issue of the broader supports required by insurance companies and the courts must be supported by the Minister and her Government.

I wish to raise a few issues on this amendment, which I support. While the role of the Comptroller and Auditor General needs to be respected with regard to its audit function, as parliamentarians we need to look at how we establish bodies, how we resource those bodies and how we try to enhance the provisions, services and functions those bodies can provide. Therefore, while there are very clear distinctions between the roles of the Comptroller and Auditor General and others, I believe this is a worthwhile amendment that deserves the support of the House.

There has been much debate over the rising cost of insurance and claims. The previous speaker spoke about fraudulent claims, an issue which has got much prominence. There is no doubt that fraudulent claims are a reality. Deputy Kelleher described people who are involved in fraudulent claims as chancers and criminals.

I know it was not the intention, but those who are involved in fraudulent claims should not be described as chancers in terms of people chancing their arm. The effect of such claims is to take from others through increased premiums.

I have two other points to make. It would be wrong to give the impression that fraudulent claims are rampant and everyone is making them because that is not the case. I made the point about motor insurance that people did not look badly on somebody increasing the cost of a claim if a car had to be fixed. It was not seen as something that was to be frowned upon. Far more awareness is being brought to the issue and in that regard it is important to signal the work of journalists such as Charlie Weston in terms of shining a light on some of the claims and how the courts are now dealing with them.

Another point is that many people simply do not claim. Far more people who have legitimate claims for insurance do not claim because they are afraid it will increase their motor insurance premiums in the future. In the event of their car being hit, they are afraid they will lose their no-claims bonus and they consider it better to pay the €1,000 themselves because they know the insurance company has them by the short and curlies. That is the reality. They are at the complete mercy of this cartel that is operating, one that has been raided by the European authorities. Nobody in government is standing up to it.

I experienced this personally when we, unfortunately, had an oil spill in my home. The first thing the insurance company said to me when I was making a claim was that we would lose the no-claims premium. It tried to dissuade me from making a claim and having it properly assessed. It is a racket. An oil spill in a garden cost €27,000 to rectify. We had to hand everything over to the insurance industry and use its specialist assessor and all of the rest. I built the house for only four times that amount. That said, my point is that the industry tries to maintain that everybody is trying to scam but far more people are afraid to claim because they are afraid that their home or car insurance will go through the roof. The reason is that the scales have been tipped in the wrong direction.

Those who are involved in dodgy claims should be called out. As I have said before, the Minister should have a word with her colleague, Deputy Farrell. What he did in the courts was despicable. He has spoken in this House about the high cost of insurance and the compensation culture, yet he was caught red handed. I criticised the then Minister of State, Deputy Eoghan Murphy, when he brought the measure forward as part of his recommendations. Likewise, I criticised the Minister of State, Deputy D'Arcy, when he did the same. Finally, the measure has been put to bed as a terrible idea. I refer to the notion that the private sector, private business interests in this State, would fund a section of An Garda Síochána. Who in his or her right mind would ever think that was an appropriate idea, in particular when one considers that the private interest in question was the sector that was subject to a dawn raid by European authorities for operating cartel-like activities in the State? That idea was under active consideration for two years during which we lost time and opportunity. It needs to be made very clear to An Garda Síochána that the Government and this House will provide it with the resources to set up a fraud insurance squad that is publicly funded to pursue those who make fraudulent claims. No matter who a person is, whether a Deputy or a scammer, should feel confident that he or she could go into court with a dodgy claim that is pushing up premiums for other individuals in the knowledge that if he or she gets caught, he or she will walk out of the Four Courts, the High Court or the Circuit Court and say nothing lost, nothing gained. Those who do this need to face the rigours of the law and to achieve that we need to resource the Garda in the required manner. The debate about who should fund the insurance fraud squad should never have taken place. What we need is an insurance fraud squad to be set up now.

My final point is one I raised with the Taoiseach this morning. A year and a half ago I raised a Topical Issue matter on insurance costs for businesses. Deputy Quinlivan has spoken about the Minister's failure to address the increase in insurance premiums for businesses. On that day 18 months ago, I focused in particular on the agriculture sector and marts, of which there are 80 in the State. Marts are crucial to the operation of agriculture. They are the lifeblood of rural communities and the farming sector. It was very clear at the time that they were under serious pressure as a result of increasing insurance costs. The Minister stood where the Minister, Deputy Humphreys, is sitting and he said he had spoken to Insurance Ireland which told him there had been no increase in insurance premiums in marts across the State. He went to the wolf and asked the wolf how it was looking after the chickens and the wolf told him it was looking after them well. However, that is not the reality because just last week a mart that was operating in the State for 51 years and providing a service in County Laois closed down because its premiums had increased for four consecutive years. That mart is not on its own. We need to take action and I have called for action. The Minister, Deputy Humphreys, should deal with the issue from a business point of view, along with her colleagues in the Departments of Agriculture, Food and the Marine and Finance.

I will finish on this point. The Minister must meet with the mart operators because unless we deal with this issue and rein in FBD, which has a cartel in operation because it is the only company providing insurance in the sector, more marts will close down.

I thank the Deputies for their interest and work on the Bill. I am satisfied the Personal Injuries Assessment Board will be sufficiently funded to carry out its duties. I addressed that issue in more detail earlier.

In terms of the length of time it takes for assessments, the Act provides that assessments are made in nine months. PIAB assesses cases on average in 7.3 months. Time is needed to obtain medical assessments and prognoses of claimants. As I said, I am satisfied that PIAB will have sufficient funding to carry out its duties. It is doing a very good job.

There have been calls for PIAB to recalibrate the book of quantum and revise the value of damages for the various injury types contained in the book. That is not possible as there is no legal basis or mechanism for PIAB to do that. Ultimately, levels of damage are set by the court and that influences the level of compensation paid throughout the system. Precedents set by the courts are followed by PIAB and the insurance sector.

The investigation of fraudulent or exaggerated claims is a matter for the insurance companies involved and An Garda Síochána. Insurance companies are now challenging more cases in the courts. Aside from the consideration of the feasibility of a fraud investigation unit, there has been significant progress in enhancing the level of engagement and collaboration generally between An Garda Síochána and the insurance industry. Part of that arose from the fraud round table which was hosted by the Department of Finance and involved wide stakeholder consultation. A key output from the process was the agreement of the document, Guidelines for the Reporting of Suspected Fraudulent Insurance Claims by Insurance Entities to An Garda Síochána, which was published on 1 October.

As Minister for Business, Enterprise and Innovation, I am very aware of the serious impact on consumers and businesses of high insurance costs. Many have suggested that the cost of personal injury claims is a contributory factor to the high cost of insurance premiums. This Bill, the recommendations from the cost of insurance working group and the recommendations from the Personal Injuries Commission are important measures in the Government's response to facilitate cost savings in the claims environment.

I look forward to introducing the Bill in the Seanad and to enactment as soon as possible after that.

The Minister referred to court cases in which people blatantly tell lies and there is evidence that what they are saying is not true. I am not talking about 50:50 decisions but about clear situations. The Minister should legislate so such cases are automatically referred to the Garda or, if it is the insurance company that would have the duty to do this, once the case finishes the company should have a duty to refer it to the Garda.

Deputy Pearse Doherty made an important point in regard to claims. People are worried that if they make a claim, their no-claims bonus will be affected, in particular that their insurance premium will increase by a considerable percentage when they go to renew it.

As we said, businesses are struggling. I appreciate the Minister's comments about PIAB and the good work it does, and I endorse those comments. However, my concern is there is no guarantee it will have the resources it needs. Obviously, it will be able to meet its statutory functions but we believe it needs to deliver a better service. The reason we put down this amendment is that we believe PIAB needs to be better funded than it is currently. It has proven itself to be an efficient organisation and it should benefit from the fact it runs efficiently, has made savings and has attempted to reduce some of the costs associated with cases, in particular by speeding them up. We need to deliver a better service and reduce the length of time people are waiting. In particular, we need to ring-fence the money. The Minister talked about taking the money out but it then goes into the black hole of the tax pot and we do not know where it ends up. Perhaps it could be given to the Garda for its insurance fraud squad because to have that funded by business is not acceptable to anyone and is a non-runner.

That is why we are going to press this amendment. I am disappointed Fianna Fáil has decided not to support that but that is its decision, although I accept it agrees there is an issue.

I note the insurance companies are challenging more of these claims. Will the Minister put on record her position on whether she still believes a dedicated insurance fraud squad should be established within the Garda Síochána?

That would be a matter for the Garda Commissioner.

Amendment put:
The Dáil divided: Tá, 21; Níl, 71; Staon, 0.

  • Brady, John.
  • Broughan, Thomas P.
  • Buckley, Pat.
  • Burton, Joan.
  • Connolly, Catherine.
  • Crowe, Seán.
  • Doherty, Pearse.
  • Funchion, Kathleen.
  • Kenny, Martin.
  • Mitchell, Denise.
  • Murphy, Catherine.
  • O'Brien, Jonathan.
  • O'Reilly, Louise.
  • O'Sullivan, Maureen.
  • Ó Broin, Eoin.
  • Ó Caoláin, Caoimhghín.
  • Ó Laoghaire, Donnchadh.
  • Ó Snodaigh, Aengus.
  • Quinlivan, Maurice.
  • Shortall, Róisín.
  • Stanley, Brian.

Níl

  • Aylward, Bobby.
  • Bailey, Maria.
  • Brassil, John.
  • Breathnach, Declan.
  • Breen, Pat.
  • Brophy, Colm.
  • Browne, James.
  • Bruton, Richard.
  • Burke, Peter.
  • Byrne, Catherine.
  • Byrne, Thomas.
  • Cahill, Jackie.
  • Calleary, Dara.
  • Canney, Seán.
  • Cannon, Ciarán.
  • Carey, Joe.
  • Chambers, Jack.
  • Chambers, Lisa.
  • Collins, Niall.
  • Corcoran Kennedy, Marcella.
  • Coveney, Simon.
  • Creed, Michael.
  • Daly, Jim.
  • Deasy, John.
  • Deering, Pat.
  • Doherty, Regina.
  • Donohoe, Paschal.
  • Doyle, Andrew.
  • Durkan, Bernard J.
  • English, Damien.
  • Farrell, Alan.
  • Fitzgerald, Frances.
  • Flanagan, Charles.
  • Griffin, Brendan.
  • Halligan, John.
  • Harty, Michael.
  • Healy-Rae, Danny.
  • Healy-Rae, Michael.
  • Heydon, Martin.
  • Humphreys, Heather.
  • Kehoe, Paul.
  • Kelleher, Billy.
  • Kyne, Seán.
  • Madigan, Josepha.
  • McEntee, Helen.
  • McGrath, Mattie.
  • McGrath, Michael.
  • McHugh, Joe.
  • McLoughlin, Tony.
  • Mitchell O'Connor, Mary.
  • Moran, Kevin Boxer.
  • Moynihan, Michael.
  • Murphy O'Mahony, Margaret.
  • Murphy, Eoghan.
  • Murphy, Eugene.
  • Naughton, Hildegarde.
  • Neville, Tom.
  • Noonan, Michael.
  • O'Connell, Kate.
  • O'Donovan, Patrick.
  • O'Dowd, Fergus.
  • O'Keeffe, Kevin.
  • O'Rourke, Frank.
  • Phelan, John Paul.
  • Ring, Michael.
  • Rock, Noel.
  • Ross, Shane.
  • Smyth, Niamh.
  • Stanton, David.
  • Varadkar, Leo.
  • Zappone, Katherine.

Staon

Tellers: Tá, Deputies Maurice Quinlivan and Aengus Ó Snodaigh; Níl, Deputies Seán Kyne and Tony McLoughlin.
Amendment declared lost.
Bill received for final consideration and passed.