I thank the Chairman for the opportunity to make this submission. We made a rather brief submission to the committee a number of months ago and I intend, with the permission of the Chairman, to talk the committee quickly through it. I wish also to take the opportunity to make a few observations on a suggestion by IBEC to the committee that this country's safety record is exemplary. We have some useful information which will enable the committee to evaluate that claim.
Earlier, I heard people identify where they had a particular interest. On the general question of insurance, we represent a vested interest group to the extent our 500,000 members are usually householders, motorists and consumers with a very definite interest in insurance costs. We do not have any particular knowledge or deep insight with regard to such costs to provide to the committee. I am sure that most of the people present know more about the matter than I do. On behalf of those we represent, I can tell the committee that insurance costs are too high. We do not know why insurance is as expensive as it is, but the cost is too high and increasing. We have a particular interest in regard to employer liability insurance and the question of compensation for workers where accidents occur and the focus of my remarks today will be on this area.
On the general question, the MIAB report seemed to suggest that one of the problems in regard to motor insurance was profiteering by the insurance companies. That certainly suggests to us that it is also a problem in the area of employer liability, which causes a number of problems for our members. Many good employers are telling us that they are having difficulty staying in business because of the increased premiums. Some of these are people who are committed to safe, efficient, well-run workplaces. Another difficulty is that, unlike in the UK, employer liability insurance is not compulsory here, so many of the smaller businesses, in particular, do not have insurance cover. When one of our members is injured he or she is faced with a dilemma; if he or she pursues compensation for the injury they could actually be putting themselves out of employment.
If I had appeared before the committee 18 months ago, I would have said, unequivocally, that the Irish trade union movement and Congress are very committed to the idea that employer liability insurance must be compulsory, but I cannot say that today. We know that if that happened many of our members would find themselves out of employment. We still think that should be an objective, however; that everybody at work should be covered by insurance, but we realise that cannot happen unless something is done about the cost of insurance.
Insurance companies are good at pointing to losses in their underwriting business. It was alluded to earlier, and it is certainly a perception on our side, that some years ago when the equity markets were buoyant and interest rates were high it seemed that insurance companies were not anxious to settle claims. They were happy to let claims drag on while interest accumulated on the money put aside for those claims. That was one of the reasons the adversarial court system came into disrepute as far as our members were concerned. This system has not delivered. It has been slow and inefficient. If it delivered to anybody, it was to the lawyers.
Most people accept that there is a compensation culture here. We are all familiar with the syndrome of a person pretending to be injured in a public place and making a fraudulent claim for insurance. There is no compensation culture, however, in the workplace. There is a huge difference between a member of the public or a fraudster faking an accident in a public place and then going after a stranger for compensation with the help of legal advisers, and workers who have a relationship with their employer. That is an important relationship and their career, pension prospects as well as job security are dependent on that. Workers are reluctant to jeopardise the relationship with the person who employs them by making a claim even when it is justified, let alone making a spurious claim.
I will say more about figures later. None of the figures we have here is particularly accurate. In so far as we can tell anything from the figures we have, it is clear that there are far more accidents at work and people injured than there are claims.
I have a similar point to make about exaggerated claims. Anybody who claims they were injured when that is not the case is a fraudster and a criminal and should be treated as such. A person who suffers a minor injury and exaggerates that into being something much more serious should be treated in the same way. When a decent, honest working person gets injured at work, sometimes through their employers' negligence, often the first thing they are told is that the accident never happened. The second thing they are told is that it was their own fault. If a claim is made, the lawyers for the negligent party negotiate in a hard-ball way to try to minimise the amount of compensation payable. This forces the injured party to also employ a lawyer. The lawyer has a vested interest in making as big a claim as possible because his or her fee will increase with a higher compensation award. The lawyer can probably justify this by saying: "look, there are negotiations going on, their side will offer a small amount and we will make a big claim and somewhere in between a fair settlement will arise." Some of the propaganda and the advertisements we have seen tended to equate that type of negotiation and maximisation of losses as being on a par with criminal fraud which I think lacks balance, to put it mildly.
To reiterate, employer liability insurance is compulsory in the UK and should be compulsory here but that cannot happen until the cost of insurance is tackled.
On the PIAB, one thing I wish to say is that not only do the trade unions support the PIAB; but it is our contention that we first suggested it. We suggested it because the adversarial legal system was simply helping the lawyers not injured workers. It was certainly not helping injured workers in terms of rehabilitation. All the research suggests that it is in the best interests of a person injured at work to get back to work as soon as possible. The longer an injured person stays out of work the less chance there is of he or she resuming work. The adversarial legal system does not aid that; it is not efficient and does not give good compensation to workers and, in fact, is only in the interests of the people who deliver the system. For that reason we are enthusiastic supporters of the PIAB but we will look at it very carefully, particularly in view of the sort of propaganda which I referred to earlier. If the PIAB is really about reducing compensation for genuinely injured workers then we will be re-evaluating our support for that concept.
I will move on to my second paper which is in response to the suggestion that was made by IBEC that Irish industries' safety record is exemplary. As I understand it, the main evidence it produced was based on Eurostat figures which showed our accident rates to be the lowest in Europe and occupational injury benefit figures which showed that there was a 40% decrease in payments in the past ten years. In regard to Eurostat, all experts in the area of health and safety know that European figures and cross-country comparisons are riddled with difficulties and that one should never draw clear conclusions from international comparisons. For instance, most European countries have sophisticated and rigorous systems for collecting accident data and, generally speaking, their data tends to be far more accurate than ours. All our systems of data collection are flawed and that is acknowledged as such by everybody, including those who collect the information. One needs to be careful using comparisons in this way. Comparisons across sectors are relevant. For instance, it is relevant to compare the construction industry here to that in the UK. General comparisons across all sectors, however, do not work. A country with a large logging industry, a heavy engineering industry and a coal mining industry, for instance, will have a much higher accident rate than Ireland, given that much of our enterprise and industry is of a low-risk nature.
It was suggested that the 40% decrease in occupational injury benefits is an indication of exemplary safety performance. Last year, there were 500 occupational injury benefit claims made by construction workers. The Health and Safety Authority requires employers to report serious accidents, and 1,200 of these were reported. We know that only four years ago one in six accidents was reported to the authority. In fairness, there has been a huge improvement on this figure. We believe and the labour force survey figures suggest that the number of reported accidents is a little under 50% of the total number and, therefore, it is reasonable to assume that the number of building workers injured last year is approximately 2,500. If 500 claims were registered how do we account for the other 2,000? Twenty-one of them are easy to account for because 21 people were killed in the construction industry last year - they did not make a claim because the dead do not make claims.
A self-employed plumber or carpenter, for example, who is injured at work will not make a claim for occupational injury benefits. There is another category in the construction industry about which I have had occasion to tell another Oireachtas committee - the bogus self-employed or the C45 people who are, to all intents and purposes, employees but who are treated by their employers as if they were self-employed. If somebody on a C45 or a bogus self-employed person is injured this will not be represented in the occupational injury benefit statistics.
However, the real key to understanding the issue is to examine disability benefit. Until ten years ago, interestingly, occupational injury benefit was worth approximately 40% more than disability benefit. Therefore, a person who was injured at work had a huge incentive to make sure that an occupational injury was recorded. This changed ten years ago with the equalisation of the two benefits. The following year, 6,000 people signed off in respect of their occupational injury benefits - I am not suggesting they availed of disability benefit. When one makes a claim for either benefit one fills in the same form. There is only one difference: if one is injured at work one must get one's employer to stamp the form. One must be seen to squeal on one's employer because an injury at work usually involves, according to the law, an employer failing in his duty of care. A person who wants to claim occupational injury benefit has to say to his employer that he or she has breached his duty of care to the claimant.
The average person claiming occupational injury benefit does so for 40 days. I do not know if anybody present has ever been so badly injured that he was unable to work for 40 days but if he has he will know it involves a serious injury. It is our contention that people who suffer from minor injuries, such as a cut finger or a sprained ankle, will claim disability benefit and not occupational injury benefit because it is easier to do so. If this is correct, it reinforces my point that the people concerned do not intend to gratuitously sue their employers. If they are prepared to accept sickness benefit rather than occupational injury benefit, they clearly will not claim.
We work very well with IBEC and the CIF on safety matters and we respect their efforts. We certainly have our difficulties with the latter organisation, but we work very hard with it on safety because we all accept that we are all trying to make workplaces safer. However, we do not share its complacency. It is coming here and clapping itself on the back for having the safest workplaces in Europe and that does not help protect workers or work, nor does it help this committee in getting to the bottom of the problems that exist.