I thank the committee for the opportunity to present today on this very important issue. I introduce my colleagues, Mr. Stephen Watkins and Mr. Maurice Priestley, who also work at the Personal Injuries Assessment Board, PIAB.
The PIAB is an independent, self-funded, State organisation which was established to provide a low-cost, speedy delivery model for the settlement of motor, employer and public liability claims. We assess personal injury claims. We have assessed more 100,000 to date and we have awarded in excess of €2 billion in compensation to people who have been unfortunate enough to be involved in accidents. We remove cases from unnecessary litigation, and up to 70% of cases no longer have the need to go to court if they use our process. We offer a low-cost alternative to litigation, and our processing costs were at their lowest levels last year, at 6.5% of the award. We make compensation payments to injured parties in line with the book of quantum, subject to prevailing rates, and our average award levels have remained consistent over the past five to six years. We publish statistics regularly on the number of applications we receive, the average award, the time to settle and the settlement costs. Through our process we also preserve the right of access to the courts if that is required and people's constitutional rights are not impinged upon.
I want to bring the committee briefly through our process and to give a high level overview of it. If somebody is involved in a car accident he or she will try initially to settle the claim directly with the insurer. If that cannot happen, a claim is then submitted to the Injuries Board which will ask the insurer if it consents to the board assessing the claim. If consent is granted, we proceed to assess the claim. If consent is denied, the case can proceed to court. At that point, but only at that point, we will issue a writ.
The case is then assessed. We must assess such cases within a nine-month timeline. We have an average assessment time of seven months currently. Once the assessment is finished, taking in independent medicals, etc., a notice of award is sent to both claimant and the insurer. The insurer and claimant must then decide whether they want to accept the award. If both parties accept it, a notice of award is sent to the insurer and it must be paid within 28 days to the claimant. If either party rejects the award, then and only then may a writ be issued for the claimant to proceed to court.
I have spoken in the past few minutes about our set-up and process. It is very obvious that there is a significant problem with insurance premiums in the country, particularly as they have risen by over 70% in three years. This has had a very significant impact on the public and, potentially, our overall national competitiveness. It is a very complex issue, with many reasons being cited - to this committee and in the media - for the increases. Those reasons include underpricing and under-reserving, increased claims, investment returns, increased fraud, levies, the failure of Setanta, changes to the legal environment and Solvency II. What is not clear is the contributory factor of each of these items to the overall issue. Specific information breaking down the size of those issues would lead to better targeting and resolution of the problem.
It is not entirely clear how claims are contributing to the issue, and that is specifically of interest to us. Our figures in recent years do not support the level of increase in claims and we cannot see how it would justify the increases we have seen. It is also very important to consider what has changed with respect to the level of claims and awards. One can look at the average level of award at €22,000 and see what has changed in recent years, driving into that increase in premiums.
I have a brief description of the different settlement channels that outlines the data available and different facets of those channels. Claims may be settled directly between parties - the insurer and the claimant. Claims may be settled through the Personal Injuries Assessment Board, PIAB, channel or through the courts. The biggest issue, as many people have said before us, is the lack of data or the ability to target where the issues are. If the issue is not with claims, is it in direct settlements? Is it in the direct settlements process before or after getting to PIAB? Does it relate to litigation costs or the average settlement amounts? Some data is available through the courts at an aggregate level and some extra information in terms of a breakdown between personal injury and, for example, medical negligence would be very useful. We could look at the average awards in courts to see if there is movement in the figures.
What is the Injuries Board doing about this? There has been much discussion about the book of quantum. That has been finalised and will be issued in the coming weeks, in line with the new court term. If adopted by all parties settling claims, it will bring increased consistency to awards and allow the insurers to reserve more accurately. It is not a silver bullet for current issues with the insurance premiums but if it is used consistently, it will certainly help the issue. The book will reflect closed claims by the courts, the Injuries Board and claims data from the insurers and State claims agencies for the years 2013 and 2014. This extensive exercise was undertaken by independent consultants and involved the analysis of over 50,000 claims. There are also other changes to the book, with more gradation of awards and more injuries covered where data was not available for the initial book of quantum. There will also be a better explanation of individual injuries.
As with many other bodies and individuals, we are seeking more transparency in claims settlements and the movements in these settlements over the past couple of years. This may be a difficult exercise but there are four basic pieces of information that could be published. These are the number of injury claims, the average settlement amount, average fees being paid and the length of time taken to settle those claims.
We are working closely with the Department of Finance working group to find ideas for reducing the cost of motor insurance. There are some specific ideas that could be looked at in the context of this group's work. Others have mentioned the idea of creating a national claims register to increase transparency, which would be a significant addition in identifying current and future issues with claims. There would be some other benefits to the introduction of such a database, such as easier and more regular updates to the book of quantum because of the immediate availability of information. It would also allow analysis of injuries and accidents in the State to consider root causes and try to bring this back to what is causing the claims in the first place in terms of road and other accidents.
We would also like to see a review of the personal injuries environment in Ireland, perhaps through the establishment of a commission to consider the various options discussed by this committee and others. We would like to see a mechanism by which we could increase the level of acceptance of awards through a number of measures, either through fast-tracking cases into the courts or other mechanisms that could be considered.
