The amendment of the Personal Injuries Assessment Board Act 2003 centres on the activity following the Personal Injuries Assessment Board, PIAB, making a formal award. While PIAB awards mirror court awards in that both have regard to a book of quantum to determine the appropriate award to be given, some claimants choose to reject their award and commence litigation proceedings in the hope of receiving greater compensation. It is their right to choose this course of action and the Bill before us in no way interferes with that right.
However, as proceedings advance, some claimants are accepting the same amount as the PIAB award but also recovering legal costs and additional costs of up to €1,500 to cover the cost of engaging a solicitor to assist with the original PIAB claim. The proceedings are therefore unnecessary for the claimant to receive the same level of award and this development completely undermines the rationale and positive impact of the PIAB. If it is allowed to continue, the consequences will be far-reaching and the cost burden will fall on the consumer and business. We must not forget that it is only a few years since businesses were being squeezed out of existence by the spiralling costs of insurance. The PIAB has done a great deal to address this unhappy set of circumstances.
The Joint Oireachtas Committee on Enterprise and Small Business made the following recommendation in its Third Interim Report on Reforms to the Irish Insurance Market, "Where, not having accepted a PIAB award, the court award is equal to or less than a PIAB award, legal costs should not be allowed to the claimant." The proposed legislation will implement this recommendation.
Section 1 of the Bill adds two new sections to the Personal Injuries Assessment Board Act 2003. The new section 51A provides that where a claimant rejects a PIAB assessment that has been accepted by a respondent and where he or she fails in any subsequent proceedings to get more than the amount determined by the PIAB assessment, he or she will not be entitled to legal costs. The new section 51B provides that no legal costs shall be allowed for the making of an application to the PIAB. Section 2 of the Bill provides for the citation of the new Act.
The PIAB was established in April 2004 as part of the Government's insurance reform programme with the aim of allowing certain classes of personal injury claims, in respect of which liability is uncontested, to be settled without the need for the costs associated with litigation. The threat of rising insurance costs at the time posed serious risks to Irish business and the economy generally.
Under the Personal Injuries Assessment Board Act 2003, claimants are obliged to submit claims to the PIAB. They may submit their claims directly or may employ a solicitor at their own cost, as is the case with the Employment Appeals Tribunal. Since its establishment, the PIAB has successfully fulfilled its legal obligations. It is now assessing claims three times faster and four times cheaper than under the old litigation system. To the end of May 2007, the board had made actual savings of more than €45 million on awards totalling €115 million by comparison with the old, unwieldy, adversarial and litigation-based system. This is quite an achievement in such a short space of time and can be only good news for accident victims, business and consumers in general, who have seen big reductions in the cost of their insurance premiums.
The Personal Injuries Assessment Board has succeeded in establishing a new non-adversarial culture of settling claims. It has put paid to the long wait for compensation and the adversarial approach to the process that previously led to huge uncertainty and stress for claimants. Within a short number of years the old system has been replaced by a speedy, low cost, user-friendly system.
I refer to examples of how the Personal Injuries Assessment Board has pared down the personal injury claims process in a wholly positive way. In 2005, the number of personal injury cases going through the Irish courts system dropped from more than 35,000 cases in 2004 to fewer than 5,000. The effects are felt throughout the courts system where valuable time has been freed up to deal with cases that should more properly reside there.
The board is a new body which has significantly changed the environment for making personal injury claims and is the subject of regular challenge. I am aware of these challenges and the Government will take whatever steps are necessary to ensure the board is not undermined in its work and in its objectives.
It is projected by the PIAB that an absence of corrective legislation has the potential to lead to the rejection of almost all PIAB assessments which will subsequently proceed to litigation for the sole purpose of securing costs. The Bill addresses the issues I have described in order to ensure thatthe stated Government policy of streamlining the settlement of personal injury claims is not permitted to be circumvented in the manner currently evidenced.
The current amendment is a short technical proposal designed to address a significant risk to the intent of the Act. With this in mind the co-operation of Senators in assisting the smooth passage of the Bill through this House would be appreciated.