Malicious Injuries (Amendment) Bill, 1986: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

In 1984 the Government, following a detailed examination of the future prospects for expenditure and taxation, took a number of decisions, involving reductions in Government expenditure, designed to reduce the current deficit and borrowing as a share of GNP, while stabilising and preparing the way for reductions in the level of taxation. The purpose of this Bill is to give effect to one of those decisions. The Bill replaces the existing Malicious Injuries Scheme with a new scheme under which compensation for malicious damage will be available in a limited number of circumstances only.

The cost of malicious damage claims has been escalating over the last seven or eight years. For instance in 1979, the cost, including that portion of claims borne by local authorities, was £3.5 million. The cost of claims relating to 1985 was just under £20 million. This increase in expenditure under a scheme which is, in fact, open-ended caused the Government to look at it to see if the continuation of the scheme under its existing terms was justifiable.

I do not wish to enter into a debate on the historical background to the Malicious Injuries Scheme or argue whether, as some have argued, it was an instrument of oppression imposed by a colonial power. However, it must be said that the people who benefit from the scheme are property owners while the cost of the scheme is levied on the general taxpaying public regardless of whether they benefit from it. In most cases the risks involved are insurable. A property owner will normally have his property insured, including insurance against malicious damage, and will pay the appropriate premium to his insurer. Where his property is damaged maliciously he will claim against his insurer. Where his property is damaged maliciously he will claim against his insurer who will pay out on a valid claim. The insurer, however, can by subrogation recover his money under the Malicious Injuries Scheme. While insurance companies will, of course, argue that the level of their premiums reflects this fact, the position is that the cost and risk to insurance companies of malicious damage at present is minimal. The cost to the taxpayer, however, is significant, as the figures I have already mentioned indicate.

Why should the general taxpayer bear the cost of compensation for malicious damage to property when he is not required to do so for example, in the case of theft? Why, if someone can afford to own a very expensive motor car, should the ordinary taxpayer be asked to compensate him when a vandal happens to scratch the paintwork? There is no justification for the present position.

There have been claims that this Bill will result in a dramatic and widespread increase in insurance premiums. The purpose of the Bill is to transfer the cost of insurance against malicious injury from the taxpayer to the owners of the property in question and to insurance companies. Obviously owners of certain properties, particularly in urban areas, will be affected to some degree. However, the cost of insurance for the average citizen is unlikely to be noticeably affected whether it be in respect of house or motor insurance. I would point out that to my knowledge, the only public statement made on this matter by the insurance industry is that reported in The Irish Press of 30 January 1986: this indicated that, while the measure would have an effect on premiums, a dramatic increase in premiums is not expected.

As respects motor insurance, particularly, I want to refute the claim that 50 per cent of compensation paid out under the scheme, £10 million in 1985, relates to damage to motor cars and that, therefore, there will be an equivalent overall increase in motor premiums. This claim has no basis in fact. Statistics of the type which would allow an accurate breakdown, by type of claim, of the compensation paid out under the scheme are not kept by local authorities. However, a statistical exercise carried out in Sligo revealed that in 1983, while 39 per cent of the number of claims related to motor vehicles, they accounted for only 5 per cent of the total amount of compensation for that year. The number and size of claims for compensation for malicious damage to cars is small compared to claims arising out of accidental damage and personal injury. Clearly, therefore, the cost of motor insurance will be affected by this measure only to a marginal degree, if at all.

Malicious damage to schools in particular areas is a serious problem. This question was the subject of discussion between officials of the Department of Education and my Department. I understand that measures are being taken to improve security in schools by the installation of better fencing, burglar alarms and toughened glass, and that grants are available for such measures for both new and existing primary schools and, in certain circumstances, for post primary schools. I would anticipate that this will have a beneficial effect overall on the level of insurance premiums for schools.

Attention has been drawn to the problems some businesses face in obtaining insurance cover, particularly in certain areas of Dublin. I understand that this problem relates to a wide range of risks such as fire, theft, liability and not just to cover for malicious damage. While one cannot be happy with that situation, this Bill is not going to change the position significantly in those cases. I appreciate the concern about the difficulty businesses in the areas in question may have in obtaining insurance, and the Minister for Justice raised it with his colleague, the Minister for Industry and Commerce, who has primary responsibility for insurance matters. The matter will be taken up with insurers to see if there are any practical ways to help alleviate any problems that may arise.

As the question of the level of crime will undoubtedly arise during the course of the debate, I would like to remind Senators of the fact that the level of indictable crime recorded has declined continuously since 1984 and that there can be no doubt but that the efforts of the Garda Síochána, with the full backing of the Government, have played a vital part in bringing about this continued reduction. I would like to make it absolutely clear that the Government do not think that the battle is won. The level of crime must still be viewed as a major problem facing our whole community and there is not the slightest room for complacency in our attitude to the matter. The fight against the criminal must, and will, be vigorously pursued. I can assure the House that the Government are fully committed to giving continued support to the various measures which have already been taken to deal with the situation. I think, nevertheless, that we can take heart from the latest statistics.

They are proof that we are moving in the right direction and that the measures being taken, with the full support of this Government since assuming office, are beginning to produce the desired results. This is of particular relevance to the Bill now before the House since this drop in crime is reflected, according to the incoming president of the Insurance Institute in Ireland, in the lower number of insurance claims arising from specific criminal activities. This must inevitably lead to a beneficial effect on the general level of insurance premiums and the availability of insurance.

To turn to the Bill itself: section 2 sets out the grounds on which compensation for malicious damage may be claimed under the new scheme. The section, which amends section 5 of the 1981 Act by substituting two new subsections for subsections (1) and (2) of the 1981 provision, will apply to claims in respect of damage caused after the passing of this legislation, leaving the existing law to apply in relation to damage caused up to that date. Under the new arrangements, damage to property will be compensatable in three circumstances: first, where the damage is caused during a riot; second, where it results from an act committed maliciously by an unlawful organisation as defined in the Offences Against the State Act 1939 and, third, where it results from an act committed maliciously by an organisation from outside the State which is engaged in violence for purposes related to the conduct or administration of the affairs of the State or of Northern Ireland.

The situations referred to are normally excluded from insurance policies and the Government therefore considered that compensation from public funds should be maintained in these cases.

I should perhaps explain that the term "riot" is used in section 2 in its technical legal sense. It is in this sense also that it is used in exclusion clauses in insurance policies. So, for example, if three people enter premises in the middle of the night, damage or set fire to them and run away, that alone would not constitute a riot.

Senators will notice that the riot provision in the new section 5(1) refers to damage caused unlawfully by "one or more of a number (exceeding two) of persons riotously assembled together" rather than damage caused unlawfully "by three or more persons ... riotously ... assembled together" which is the formulation used in the 1981 Act. The drafting of the subsection in this way is simply to remove any doubt there might be as to whether damage caused by one or two persons in the course of a riot is compensatable.

The new subsection (1) also provides for damage caused by unlawful organisations as defined in the Offences Against the State Act, 1939, and by certain other organisations from outside the State. Damage caused by such organisations has, of course, always been covered by the general compensation provisions which have existed up to now. The need for a specific provision arises because of the termination of those general provisions. There is an exclusion in the Bill in relation to damage, the cause of which originated from outside the State. A common example of international terrorism is the hi-jacking of ships or aircraft, often for the purpose of trying to force a country to release persons lawfully detained in its prisons.

In the absence of any qualification in the section, the possibility would exist of claims for compensation being made against the State in respect of ships or aircraft which, having been hi-jacked outside the State, are blown up or damaged here. To prevent claims of this nature being made, the section contains, at paragraph (b) of subsection (1), a proviso the effect of which would be to ensure that no compensation would be payable where damage was caused to a ship or aircraft in the State as a result of an act done outside the State or as a result of an act done in the State by a person or persons who travelled into the State or the ship or aircraft in question. An obvious example would be the case where an explosive device is placed on a plane before it reaches this country.

Section 3 provides for the issue of a certificate by a chief superintendent that he is of opinion that a specified act was committed maliciously by a person acting on behalf of one of the organisations mentioned in section 2. An injured party would not normally be able to prove in court that the damage he suffered was caused by a person acting on behalf of or in connection with such an organisation and, accordingly, so that the provisions in such cases may have effect, the Bill provides a role for the Garda Síochána. Of course the refusal by a chief superintendent to issue a certificate would not prevent a claimant bringing forward other evidence to support his case.

As the information on which a certificate will be based may involve matters of national security, subsection (2) of the section provides that a chief superintendent will not be required to disclose that information, or its source, in any proceedings.

Section 4 of the Bill continues a provision that was introduced for the first time in our law by section 6 of the 1981 Act. It provides for compensation for property taken from a building damaged during a riot and tumult. Section 4 contains drafting amendments to the 1981 provision so as to bring the section into line with the wording of section 2 of the Bill and two other amendments intended to remedy anomalies which came to light during the redrafting of the provision.

Before I leave this section, I would like to emphasise the fact that in the case of compensation for property taken during a riot the provision requires the further ingredient of "tumult", that is, the persons must be "tumultuously" as well as "riotously" assembled together; in other words, there must be a riot in the popular sense where looting normally occurs. This added element of tumult is not required for compensation for damage to property caused during a riot as it is damage caused by riot simpliciter that tends to be specified in insurance policies as being excluded from insurance cover.

Section 5 of the Bill also continues with an amendment of a provision contained in the 1981 Act. Section 7 of the 1981 Act provides that it shall not be a defence to an application for compensation merely to show that the damage to which the application relates was caused by a person of unsound mind or by a child. While, as I have already said, damage caused maliciously to property by such organisations as are mentioned in section 2 of the Bill was compensatable under the general provisons of the 1981 Act, the specific provisions in relation to that type of damage in this legislation has highlighted the fact that the damage may be caused by a person acting under duress. In such a case it could be argued that an act, while done intentionally, was not done maliciously. It is in order to meet this argument that section 5 extends the provision in section 7 of the 1981 Act so as to ensure that damage caused by a person acting under duress will not be uncompensatable merely on that account.

Section 6 provides for full recoupment by the Exchequer of the cost of compensation awards made against local authorities under the new scheme. The decision of the Government in this regard, will be welcome news to all local authorities. Sections 7 and 8 are consequential amendments.

Apart from the burden imposed on them by payment of compensation, local authorities have also been concerned at the burden imposed by payment of their own legal costs as a result of defending successful claims. No part of these legal costs is recoupable at present. The Bill gives total relief to local authorities as regards both compensation and these costs.

There is one further matter in the Bill to which I want to refer. I have already mentioned that the 1981 Act, as it stands at present, will apply to cases of damage occurring before the passing of this Bill. For this reason, the full extent of the savings resulting from the enactment of this legislation will not become apparent for a year or two. The expected savings, when all claims made under the 1981 provisions have been dealt with, are estimated at over £20 million annually.

I commend the Bill to the House.

Mr. O'Toole

At the outset, I see that the first three pages and the first paragraph of the Minister's speech is somewhat different to the Minister's speech when this Bill passed through the Dáil. Presumably that is to answer the many points that were raised in the Dáil against the operation of this Bill. I want to refer to that before I make my comment. The first three pages of the speech deal with cases that were raised in the Dáil over the last days of discussion there.

The main purpose of this Bill is to transfer the liability from local authorities to the general public. While the Minister wisely gave the figures for 1979, I want to draw the Minister's attention to the fact that in 1982 the bill for malicious injuries claims was £9.9 million as against £20 million to date, which indicates to me that the measure of breakdown in crime has increased considerably over the period of this Government. For that reason there is an increase over the last three years of £10 million in malicious claims damages. This Bill has been introduced to transfer to the ratepayer that liability which was the responsibility of the Government heretofore. I will come to that at a later date.

There will be an imbalance from county to county in connection with the section that deals with rioting and disturbances that may come from people across the Border and outside the country. If that is the case, there will be no equalisation of the moneys that are going to be placed on the ratepayers as between one county and another. I can cite the cases of Donegal, Monaghan, Louth and Cavan, where people now living along the Border could have an increase in the number of malicious claims to pay because of their location, while people in counties like Clare, Limerick and the southern counties who are living in a more peaceful environment will have lesser claims. The amount of money paid out in the greater Dublin area during the last three years — £12.5 million was paid out of the £20 million — indicates that crime is at a very high level there. That is where I believe that law and order has broken down. We have this Bill.

I want to say to the Minister that we will be opposing this tooth and nail on Committee Stage. The breakdown of law and order and vandalism between 1982 to 1986 is the reason for the increase. What will be the effect of putting the onus on the public? This is worth examining. First of all, properties will have to be insured right away. The projections and forecasts we have here to date from the insurance companies show that immediately this Bill goes through this House and is signed by the President there will be a 10 per cent increase on vehicles, boats, motorcycles and on commodities that are already heavily burdened, as most people who have to get young people insured at this time know. What will the position be as regards other institutions such as primary schools and educational institutions? The projections are that insurances will rise by some 40 per cent in the case of primary schools and up to 30 to 35 per cent in the case of secondary schools. The same applies to churches, lock-up shops, factories, warehouses, colleges, convents, etc. There will be increases in insurance right across the board as a result of the transfer of liability from the State to those properties. The properties will now have to be insured and continue to be insured. What will be the effect of the claims coming into insurances, as has happened with the motor trade? Insurance charges will increase beyond the capabilities of the people to pay, as is the case with young drivers now. Some young drivers may have to pay from £800 to £1,000 to get insurance cover for 12 months. The same will apply when the claims continue to come in as a result of this new Bill.

These increased changes are something that the people will not be able to meet. Who will have to pay for the rioting under the claims that will come through under this new Bill? I will tell you who will have to pay. It will be the ratepayers. The ratepayers who are in business and who have properties, and who have not got relief under the domestic rate relief will have to pay. The burden will be confined to the business people and property owners of this country. It will not be spread on the taxpayers, as the Minister has said. It will be spread only on a portion of the taxpayers who are already overburdened because they are eligible to pay rates. It will not be spread over the domestic population; neither will it be spread on a blanket basis. It will be spread on the particular electoral area where the malicious claim occurs, as has happened heretofore. I see nothing in the Bill that changes that burden on a particular electoral area. When a malicious claim arose under the old legislation the ratepayers in the particular electoral area where the malicious damage was caused paid for it. The Minister did not say whether this has been changed. Will ratepayers have to take responsibility for the burden that will accure as a result of this Bill being introduced? I should like the Minister to clarify this point and allay people's fears.

If property belonging to the ESB or An Bord Telecom is damaged the Government will pick up the tab. There will be a saving of £4 million to county councils as a result of transferring responsibility from the local authorities and the Department to ratepayers. That £4 million should be put into a capital reserve fund and used to take pressure off ratepayers who will be responsible for claims under the new Bill.

If this Bill is passed what will be the position with regard to future claims and those in the pipeline against county councils? Will they go by the wayside? When this Bill is signed by the President will liability be transferred to the Government? In the case of decrees which will be issued over the next few days, will the Government or the local authorities pick up the tab? When will the new legislation come into effect? This is very important because every local authority made provision in their estimates for malicious claims. I ask the Minister to tell us if responsibility will be taken for claims in the pipeline and for decrees which are in train at present.

I oppose the Bill. It has no purpose other than to transfer liability from local authorities and the Government to ratepayers. We, on this side of the House, cannot accept this Bill. We will oppose it on all Stages. I will deal with it in greater detail on Committee Stage.

The principle underlying the malicious injuries code is to allow the owner of property, whether moveable or immoveable, which has been maliciously damaged to apply to the Circuit Court for an award for compensation to be paid ultimately by the relevant local authority. The purpose of this Bill is to remove that facility from the citizens of this State. In so far as any measure introduced by Government removes a facility from the citizen is seems to evoke opposition. One must ask if the malicious injuries code is well founded. One must ask if it is relevant in Irish society in the latter part of the twentieth century I think it is not.

The malicious injuries code clearly reflects a paternalistic age. It reflects an age when leaders in society had a duty to ensure that peace was maintained. That was done by imposing on them, usually as property owners, the obligation to pay for any damage maliciously caused within their locality. That principle was acceptable in a society where there was no established police force or where the rule of law did not run in an efficient manner. The idea underpinning the malicious injuries code was found here and in Britain 600 or 700 years ago. In 1836 the Irish Parliament passed an Act "for the following of Hue and Cry", which spoke of charging the hundred or barony with the cost of the damage caused. In 1695 another Irish Act provided "for the better suppressing Tories, Robbers and Rapparees and for preventing Robberies, Burglaries and other heinous Crimes". The method of doing that was to impose on society the obligation to pay for crimes maliciously committed within their area. That is why in the Grand Jury (Ireland) Act, 1836 the idea that a court could impose on people living in a particular barony or parish the cost of a crime committed in that area was carried forward into our malicious injuries code and exists at present. The purpose of this Bill is to abolish that code.

In a sense it can be argued, as Senator O'Toole has argued, that the Bill deprives a citizen of the right to recover compensation except in the circumstances specified in section 2. The question we as legislators have to ask ourselves is: where should the role of the State begin and, more importantly, where should it end? Quite frankly, I find the approach of the Fianna Fáil Party in relation to this Bill very hollow when one bears in mind the fact that they welcomed the Health (Amendment) (No. 2) Bill which was enacted two months ago or thereabouts. That Bill simply provided that the cost of maintaining and treating accident victims in any injury action should not be borne by the health board but by the defendant of his insurance company.

When speaking on Second Stage of that Bill I compared the situation envisaged under it to the type of situation covered by the malicious injuries code. I made the point that in principle I supported that Bill. In principle I support the abolition of the malicious injuries code because I do not believe that the State should pay for every difficulty or for every misfortune that befalls an individual. If an individual suffers injury in a motor accident and has to be hospitalised, then the cost of that should not be borne by the State but by the person who occasions that injury, namely, the defendant in a case or, more likely, his insurance company. A direct analogy applies in relation to the malicious injuries code. If a property owner's property is damaged, then the cost of repairing that damage or compensating the property owner for it should not be borne by the State but by somebody else. If it is possible to make the person who perpetrated that damage responsible, well and good. If it is not possible, then the cost should be borne by the insurance company of the property owner. The sooner we get away from the idea that the State holds a vast net into which every bit of misfortune we have in life will fall, the better.

One of the problems existing in society — I say this with respect to my friend, Senator O'Toole — which has not been helped by recent statements made by the leader of his party is the idea that, no matter what difficulty or misfortune befalls anybody, the State is there to pick up the burden. This Bill gets away from that position. This is a courageous measure and I ask members of the Opposition not to construe the principle underlying this Bill for shortsighted and shallow political purposes.

Senator O'Toole made the point that the cost of insurance will increase, and I agree with him. The Government must examine the insurance industry. We have within this jurisdiction a most unsatisfactory insurance regime and an insurance industry which in its operation is not understood by the vast majority of citizens or indeed by most legislators. In addressing ourselves to the problems which are normally resolved within the malicious injuries code, we must address the weaknesses existing within the insurance industry. I do not want to refer in any greater length to that problem now, but I ask the Minister to bring my views to the Government in that regard because that is where the nub of the matter lies. So far as the basic principle underlying this Bill is concerned, I welcome that principle and the Bill.

It is interesting to record that almost 30 years ago the then Minister for Justice set up an inter-departmental committee to consider the malicious injuries code. The committee took note of the agitation which had existed over the years calling for the abolition of the malicious injuries code, an agitation based upon the view that it was unjust for innocent ratepayers to have to pay for damage occasioned by other people. While that committee was aware of the unrest, it did not recommend that the malicious injuries code be abolished. It is important to mention that almost 30 years ago abolition of the malicious injuries code was being talked about and what this Government have now done is, in effect, nothing new.

Mention has also been made that the provisions contained in section 2 will impose a greater burden on local authorities. I do not accept that. That argument is untrue. My understanding of this Bill is that, if enacted, the situations provided for in section 2 will, if compensation is awarded, be ultimately funded by the State. The Bill provides in a subsequent section that the Minister for the Environment will refund to the local authority all funds paid by way of compensation. To suggest that the business community would have to bear a further burden by virtue of the contents of section 2 is untrue. Section 2 provides that compensation will be awarded where damage is caused in the following circumstances: firstly, where damage is caused unlawfully by one or more of a number of persons riotously gathered together. Secondly, where damage is caused as a result of an act committed maliciously by a person acting on behalf of or in connection with an unlawful organisation; and, thirdly, where damage is caused as a result of an act committed maliciously by a person acting on behalf of or in connection with an organisation outside the State that engages in, promotes, encourages or advocates the use of violence for purposes related to conduct or administration of the affairs of the State or Northern Ireland. These three exceptions are reasonable. Their existence does not depart from the overall principle I mentioned because they are normally excluded in insurance policies. In so far as we live in an unsettled land, a land that is unfortunately subject to damage committed by persons in the circumstances envisaged by section 2, I welcome them.

I reject the false criticisms of this Bill. I fully support the principle underlying the Bill, namely, that the State should not be there to pick up the tab for everybody's misfortune. I welcome the exceptions contained in section 2. I support the gradual removal of the malicious injuries code from our legal provisions, it being a code which reflects a paternalistic age from which we have departed.

The problem of malicious injury occurs mainly in large urban areas like Dublin, Cork and Limerick where the levels of vandalism, arson and malicious burglaries are at their highest. There is no dispute about the fact that this Bill will abolish the present scheme of compensation for damage maliciously caused to property except when caused by a riot or by the activities of an unlawful organisation.

Senator Durcan appeals for support for the principle of the Bill. We must, however, consider the practical implications of the Bill. Senator Durcan agrees with Senator O'Toole that the Bill, when implemented, will result in higher insurance costs. The basic problem is that of law and order. Increased insurance costs will affect schools and community and sporting groups because they are especially prone to malicious damage. The Bill will also result in increased insurance costs for householders, motorists and businesses especially those businesses that are located in crime-prone urban areas. The law and order problem is particularly acute in Dublin. This is reflected by the fact that 60 per cent of £12 million paid out in 1985 for malicious claims related to Dublin.

I want to refer specifically to schools. Since 1982 following the high rate of crime and vandalism, insurance costs have increased by over 100 per cent. The insurance industry predict that the proposals in the Bill will lead in major urban areas to a further immediate rise of 45 per cent in insurance premiums for primary schools and 30 per cent in the case of post primary schools. In the course of the Minister's speech she said:

However, it must be said that the people who benefit from the scheme are property owners while the cost of the scheme is levied on the general taxpaying public whether or not they benefit from it.

I find this a curious distinction. Who owns schools and who pays for them? Schools are paid for by the Department of Education who get their funds from the general taxpaying public or through voluntary subscriptions from members of the general taxpaying public also. In the same context, we had in the most recent Finance Bill levies on insurance companies and banks as though they were separate institutions from the individuals who make them up. Who pays those levies and the resultant bank charges? The taxpayer.

The Minister is of the view that only a marginal increase will take place in car insurance. Even if it is only a marginal increase it will be too much. We are the most highly taxed car owners and motorists in Europe. The Bill will increase the cost of car insurance by 5 per cent, in the case of comprehensive policyholders and by a higher percentage in the case of that large number of motorists who have third party fire and theft cover. A further worry in relation to the increased insurance premiums is that this will lead to further aggravation of the problem of uninsured drivers.

With regard to churches and community centres it is estimated by the insurance industry that in urban areas insurance costs will increase by at least 12½ per cent. In the case of fire insurance the insurers estimate that it will rise by at least 10 per cent nationally as a result of this Bill with a much higher increase in the higher risk areas, such as, Dublin, Cork and Limerick.

The final area I want to refer to in the context of higher insurance and its impact is that of businesses, especially small businesses in the Dublin 1 and 2 postal districts. There is no question but that insurance premiums for these premises will shoot up, that is, if the owners are able to get insurance at all. Who are these shop owners? Are they property owners? They are already hard-pressed taxpayers trying to make a living from their small businesses in a crime prone inner city.

The Bill will clearly increase the cost of insurance premiums in relation to damage caused to property by crime and vandalism. While there will obviously be a saving for the Exchequer — this is the primary reason for the introduction of this Bill — there will be a very serious additional cost in respect of increased premiums for a variety of people and institutions and, in particular, the taxpayers who make up those institutions.

A reduction in crime is obviously the only really effective way to reduce the cost of malicious damage. The approach in the Bill is not the answer to the obvious necessity to fight crime. The Bill will result in further costs being imposed on already over-taxed individuals and communities and, very regrettably, a further penalty on businesses, especially small businesses in the inner city.

I thank Senators for their contributions to the Second Stage debate. As I explained in my introductory statement the objective of this Bill is to restrict the scope of the malicious injuries scheme and thereby reduce public expenditure. The Government could not justify the continuation of the existing scheme because of the severe financial burden it imposed on the taxpayer. The Government cannot see why the cost of compensation for damaged property should not be borne by those who profit from it, that is, the owners of property and insurance companies.

There has been a lot of comment about the effect this Bill will have on insurance premiums. I want to make it quite clear that it will have little or no effect on insurance costs for the ordinary citizen. I would be very surprised if it has any effect at all on household insurance overall. Senator O'Toole claimed that there would be a 10 per cent increase in the cost of motor insurance rates. I do not accept that claim. My information is that if there is to be an increase in motor insurance as a result of this Bill it will be less than 5 per cent and most likely in the region of 3 per cent. Therefore, there is no basis for the suggestion that there will be widespread and significant increases in insurance premiums. Obviously there will be some increases for certain property owners. I do not think this is unjust as the Bill is transferring the burden of insurance cover from the taxpayer back to the owners of property as far as malicious damage is concerned. It is the normal practice in Northern Ireland and England and in most continental countries that the owner of property covers himself against malicious damage without financial assistance from the State.

Senators will notice that we are making exceptions for malicious damage caused by riot and subversive organisations. It is not normally possible to insure against this type of damage. Several European countries provide a scheme of compensation to cover one or other of these eventualities. It is because of these special circumstances that the malicious injuries scheme is being kept in a limited form. It is not envisaged that there will be a large number of claims under the limited scheme.

Senator O'Toole asked what the position will be in relation to existing claims and decrees. Damage caused prior to the passing of this Bill will fall to be dealt with under the existing scheme. The Bill will only affect cases of damage caused after the passing of the Bill. Therefore, local authorities will still be liable for paying compensation in the case of damage occurring before the passing of this legislation subject to the existing recoupment arrangements.

Senator O'Toole decided to pick the 1982 figure as a starting point for considering the increase in the level of malicious injuries compensation. I would point out to the Senator that there is a three year limitation period within which proceedings for compensation for malicious damage must be taken. There can, therefore, be a delay of up to three years in processing claims. The figure for 1982 would reflect the amount of malicious damage caused within the previous three years. By quoting the 1982 figure as a starting point he cannot say that the increase in malicious damage commenced in that year.

He also seemed to think that the full cost of the new scheme will fall on ratepayers. At present part of the cost of compensation for malicious damage is borne by the local rates. When the Bill is passed, there will be no liability in respect of malicious damage compensation on the rates. The full cost of compensation under the new scheme will be borne by the Exchequer.

Senator O'Toole and Senator Hillery also referred to the possible effects of the Bill on the schools and I dwelt on that at some length in my opening speech. While I accept that malicious damage to schools in particular is a serious problem, this question was the subject of discussion between officials of the Department of Education and the Department of Justice and I understand that measures are being taken to improve the security in schools by the installation of better fencing and burglar alarms, toughened glass and such other security measures and I anticipate that this will have an overall beneficial effect on the level of insurance premiums for schools.

The Department of Education currently pays a grant of £24 per pupil per annum to primary schools and this grant, together with a local contribution of £6 per pupil, is intended to cover matters such as heating, cleaning, maintenance and insurance. I would like to assure Senator Durcan, who drew attention to problems in the insurance area, that I will convey his views to the Minister for Industry and Commerce on the subject as he requested.

Question put.
The Seanad divided: Tá, 22; Níl, 10.

  • Belton, Luke.
  • Browne, John.
  • Bulbulia, Katharine.
  • Burke, Ulick.
  • Connor, John.
  • Cregan, Denis(Dino).
  • Daly, Jack.
  • Deenihan, Jimmy.
  • Durcan, Patrick.
  • Ferris, Michael.
  • Fleming, Brian.
  • Harte, John.
  • Higgins, Jim.
  • Hourigan, Richard V.
  • Howard, Michael.
  • Howlin, Brendan.
  • Kelleher, Peter.
  • Lennon, Joseph.
  • McDonald, Charlie.
  • O'Leary, Seán.
  • O'Mahony, Flor.
  • Quealy, Michael A.


  • Cassidy, Donie.
  • Ellis, John.
  • Fallon, Seán.
  • Fitzsimons, Jack.
  • Hanafin, Des.
  • Hillery, Brian.
  • Lynch, Michael.
  • Mullooly, Brian.
  • O'Toole, Martin J.
  • Ryan, William.
Tellers: Tá, Senators Belton and Harte; Níl, Senators W. Ryan and M. O'Toole.
Question declared carried.

When is it proposed to take the next Stage?

It is proposed to take the next Stage next week, on Tuesday, 8 July, if possible.

Committee Stage ordered for Tuesday, 8 July 1986.
The Seanad adjourned at 5.45 p.m. until 12 noon on Tuesday, 8 July 1986.