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Gnáthamharc

Wednesday, 15 Nov 2006

Other Questions.

Personal Injuries Assessment Board.

Ceisteanna (16)

Jim O'Keeffe

Ceist:

79 Mr. J. O’Keeffe asked the Minister for Enterprise, Trade and Employment if his attention has been drawn to the backlog of claims to be dealt with in the Personal Injuries Assessment Board; the reason for this backlog; the number of staff involved; the annual budget of the PIAB; and if he will make a statement on the matter. [37756/06]

Amharc ar fhreagra

Freagraí ó Béal (21 píosaí cainte) (Ceist ar Minister for Enterprise, Trade and Employment)

I am aware of recent media publicity concerning the Personal Injuries Assessment Board. The PIAB has received 36,000 cases since it was established. I understand from the PIAB that 6,000 of these were settled up-front from the outset, 9,000 cases were settled between the parties during the PIAB process, more than 5,000 assessments have been made, and an estimated 4,000 cases are heading into litigation, although not all of these will necessarily go to a full hearing.

This leaves 12,000 cases which are currently in the PIAB system. Some 7,500 of these are in the assessment phase and I am assured by the PIAB that they will all be dealt with within the statutory timeframes. The balance of cases is awaiting documentation from one of the parties or a decision from the respondent to consent to process.

The Personal Injuries Assessment Board Act 2003 provides that the board must ensure that assessments are made within a period of nine months beginning on the date on which it receives the respondent's consent to assessment, or in circumstances where it appears to the board that it would not be possible or appropriate, because of the particular circumstances of the claim concerned, to make an assessment within the nine month period, the period for making an assessment may be increased to 15 months. I am advised by the board that 93% of assessments are made within the nine month period; the remaining 7% are assessed within a further six months as allowed by the legislation and these would normally be cases where a stable medical prognosis is not available in the nine month period.

The board has assured me that it has the capacity to deal with the volumes of cases on hand and projected to come before it. Currently 72 staff are employed by the board. This is expected to rise to 85 by the year end. In addition, the board outsources claims preparation and helpline services to a contracted service centre, which provides flexibility and the capacity to expand processing volumes quickly to meet increased demand. Based on statistical and actuarial trends, the PIAB has projected annual volumes of cases rising to 25,000 per annum, 40% of which are expected to be resolved between the parties following contact with the board, 20% are expected to head into litigation but not necessarily to a court hearing and the remaining 40% will be assessed by the PIAB.

Total expenditure by the PIAB in 2005 was €8.08 million. This was funded by a €2.5 million Exchequer grant, €5.2 million in fees received and €384,000 from other income sources. The board is expected to be self-funding in 2006 in respect of operational costs.

The success of the PIAB represents a good news story for consumers who can now have their claims processed much more quickly and will receive the same level of awards as made in the courts without the trauma of litigation. The average time which it takes the board to assess cases is 7.2 months from the date of consent. Under the previous litigation-based system cases took three to four years to be settled. The costs associated with settling claims under that old system averaged 46% of the cost of awards, which compares to costs of approximately 7% under the PIAB system. In addition, a large number of cases have been removed from the courts system, freeing up the courts to deal with other matters.

The achievements of the PIAB to date are significant, delivering as it does a fast, efficient and, above all, fair personal injuries claims settlement system in such a short period since its establishment. The challenges the PIAB has overcome, logistic and legal, have been formidable and while the board continues to operate in a difficult environment, I have every confidence in its ability to deliver a quality service within its statutory timelines.

From discussing the issue with many people who are involved, I present a different view from that presented by the Minister and one that is based on consideration of the independent assessment of the board by journalists. Does the Minister accept that some of those views include headlines carried in The Sunday Business Post recently to the effect that “insurers are the big winners from injuries claims board”, “injuries board needs treatment” and “injuries assessment board needs an urgent overhaul”? Does he accept that at this stage the board is a basket case?

I wish to put some specific questions to the Minister. Why have so few awards been made? Why is it that from July 2004 until now out of 36,000 applications only 4,400 awards have been made? Is it correct that what has happened here could best be described as adding another layer of bureaucracy, cost and delay to the claims process? Where is the current annual report? Why has it not been published? Is it being hidden? Does the Minister agree or is he aware that the acceptance rate for awards has fallen from 75% to 60%? Will he advise the House why many claimants are abandoning the process?

Why do the lawyers to whom I have spoken seem very happy with the system? When I see lawyers happy with the money they are making under a system, I am concerned, having been a former lawyer.

I emphasise the criticisms I put forward do not come from any vested interests but from respected journalists such as Ms Deairbhail McDonald in the Irish Independent and Mr. Pat Leahy in The Sunday Business Post. The Minister might take on board the views of Mr. Eamon Devoy, one of the chief people in the Technical Engineering and Electrical Union. I gather that his view of the PIAB is that it is a fiasco. He represents the country’s largest craft union and he has said that a number of the members of his union are injured and some are killed every year and he is of the view that the PIAB is a disaster in dealing with such claims. Is the picture we have of the Government one that is full of the self-satisfied rhetoric of Government and of the PIAB or is the Minister’s eyes closed to all these problems?

I take strong issue with Deputy Jim O'Keeffe's use of the term "basket case". There has been an ongoing attempt to undermine the PIAB and it is regrettable that the Deputy should add to what has been a sustained campaign by vested interests to undermine the board.

What about Mr. Devoy's view?

The Deputy would have been aware of that campaign from the outset. Many solicitors for obvious and understandable reasons from their point of view were against its establishment. However, a number of solicitors I have met have admitted that it is working, although they acknowledge it has resulted in a significant loss of earnings for themselves and their companies.

That is Dorothea Dowling talk. It is rubbish.

Even The Sunday Business Post article to which the Deputy referred acknowledges that insurance costs have decreased. Motor insurance and home insurance costs have fallen to 1999 levels.

I refer the Deputy to a recent IBEC press release dated 2 November, which carried the heading "Rate of personal injuries claims falling". It was reported on "Drivetime" on Friday, 10 November that the number of employee insurance claims in recent years indicates a downward trend in claims against business by as much as 40% in real terms, from almost 12,000 claims per year in the period to 2002 to approximately 7,000 per year in the past three years. Court writs in personal injury claims which numbered on average 33,000 per year up to 2004 were down to 4,000 in 2005. That is not a basket case of an enterprise.

Insurance costs also show significant decline with room for further improvement on an ongoing basis. Insurance costs have come down. The chairperson of PIAB addressed an Oireachtas committee on 18 October at which meeting I understand Deputies and Senators welcomed the positive impact of the PIAB. The commentary at that meeting does not fit neatly with Deputy Jim O'Keeffe's commentary this afternoon.

I am glad the Minister has taken note of what we are doing in that committee. He does not always acknowledge or heed it.

I welcome and am a great admirer of the work of the committee from time to time, although not on all issues. It is important to have a sense of perspective in this debate. Deputy Jim O'Keeffe's comments on his assessment of the PIAB lack perspective and balance.

As I stated, PIAB deals with cases. As Deputy O'Keeffe knows, cases are settled within two to seven months compared to three or four years under the old system. Costs were reduced to 7% compared to 46% under the old litigation-based system.

Above all, through this programme, the Government helped to reduce motor and home insurance costs.

The consumer gains nothing from it. The only people who gain from the process are the insurance companies. They clean up because of the reduction in fraudulent claims, which has nothing to do with the PIAB, and increased competition in the market. I speak for the ordinary claimant and consumer who is met with delay. Mr. Devoy of the TEEU represents ordinary claimants who find the process a fiasco.

I will make a sporting offer to the Minister. Will the Minister forget the rhetoric he is fed by the representatives of the board and accept a case exists for an independent review of its operations? That is all I want. An independent review is necessary. The Minister and those involved in the board are blinded to the facts of the situation. I will be happy if the Minister agrees to an independent review of the operations of the board which, I repeat, has not produced its annual report.

I must respond — this is not rhetoric. Data from the Central Statistics Office show motor insurance costs for September 2005 dropped to levels last seen in September 1999. It also shows the cost of home insurance in September 2006 dropped below November 2001 levels. This is not me or any fancy rhetoric. It is Central Statistics Office data.

I agree the insurance industry has higher profits. Will Deputy O'Keeffe meet with the chairperson, Senator O'Toole, who is the vice-chair and a Member of the Oireachtas, and the chief executive officer——

I will meet with anybody.

——and put his issues to them?

An independent review of the operations of this——

They would be more than willing to deal with Deputy O'Keeffe's questions and explain to him the progress being made.

The Minister has not dealt with it.

I have. I met with them, put these questions to them, received responses and articulated them to the House. I ask the Deputy——

I want an independent review of the operations of the board.

——to go to the board himself and not to add to the sustained campaign by vested interests to undermine it.

Skill Shortages.

Ceisteanna (17)

Richard Bruton

Ceist:

80 Mr. Bruton asked the Minister for Enterprise, Trade and Employment his views on the opinion of the American Chamber of Commerce in Ireland who have said that future investment by US companies here is in danger due to a shortage of suitably qualified staff; and if he will make a statement on the matter. [37936/06]

Amharc ar fhreagra

Freagraí ó Béal (5 píosaí cainte) (Ceist ar Minister for Enterprise, Trade and Employment)

I understand the particular concern expressed by the American Chamber of Commerce survey relates to fourth level or PhD graduates. A concerted effort is made across Departments to promote fourth level education in Ireland. This is reflected in a number of ways, including in the work of bodies such as Science Foundation Ireland.

The recently launched strategy for science, technology and innovation has an explicit target of doubling the number of PhD graduates in Ireland by 2013. The budget 2006 commitment of €300 million to the strategic innovation fund for higher education over the five years to 2010 is a further indication of the Government's focus on this area.

In a tight labour market such as exists in Ireland, it is inevitable individual companies will experience difficulty at times in recruiting suitable personnel. However, a sustained commitment exists to do whatever is required to ensure the necessary pool of qualified and skilled personnel is available and that appropriate steps are taken to anticipate and redress skills gaps. Increased investment has been made in upskilling those in employment and FÁS received significant funding aimed at upskilling those within the workforce.

The expert group on future skills needs has monitored our future skills needs since 1997. The expert group conducts detailed research for my Department to underpin a national skills strategy to be brought forward by the Government in 2007. The purpose of the research and subsequent strategy is to ensure Ireland identifies and meets its changing skills needs during the period to 2020.

The expert group also commenced work on a specialist skills study which will underpin the development of the centre for financial services skills. This initiative is a response to a recent report entitled Building on Success produced by the high-level clearing house group under the Department of the Taoiseach.

In addition to upskilling the resident population, I introduced a system of green cards and work permits to facilitate high-skilled migration into Ireland to alleviate constraints in areas of strategic importance where skills shortages are greatest. The ongoing commitment to building skills and competencies within the labour force will be reflected in the new national development plan. I am confident the measures put in place by the Government will ensure the necessary pool of qualified and skilled personnel is available to cater for future demands.

I acknowledge what the Minister stated. What was worrying about the headlines put before us by the American Chamber of Commerce, particularly by Dr. Fraser Logue, was that 42% of those surveyed stated their parent company would not view Ireland favourably as a location for investment because of labour shortages and 73% stated they struggled to secure skilled labour.

I tabled this question to bring these matters to the attention of the Minister and show US companies have deep concerns about these issues. I acknowledge the Minister indicated a number of policy responses he will make. How does he intend to communicate more forcibly that message to the American Chamber of Commerce and the companies involved and ensure it, rather than the negative message from the survey, is received?

We have regular meetings with the American Chamber of Commerce. We will discuss this issue at future meetings. I meet individual companies overseas and here. In the overall context, through the extraordinary inward migration to Ireland and the expanded third level system, we make every possible effort to facilitate low and high skill availability. The decision in May 2004 regarding the accession states represented a huge increase in labour force availability to Ireland. That should also be acknowledged by the companies concerned. It was unprecedented and caused many other pressures for us, as we discussed.

That is the reason Google is still here.

The green card we will introduce as part of the work permits system will facilitate high-skilled labour and will better streamline it. I accept the procedures must be streamlined to facilitate inter-company transfer, which will be statutorily facilitated in the Act. We will introduce regulations to commence it in the new year. The green card and work permit systems will focus on higher skills.

A number of US companies continue to locate here. Although we experience fast growth, the skills issue will be managed through a combination of investment, education and migration. Other issues such as broadband and energy, which was mentioned by the Deputy, must be addressed.

EU Directives.

Ceisteanna (18)

Shane McEntee

Ceist:

81 Mr. McEntee asked the Minister for Enterprise, Trade and Employment the progress of his public consultation on EU price display legislation; and if he will make a statement on the matter. [37939/06]

Amharc ar fhreagra

Freagraí ó Béal (7 píosaí cainte) (Ceist ar Minister for Enterprise, Trade and Employment)

Directive 98/6/EC on the requirement to indicate product prices was transposed into Irish law in Statutory Instrument No. 639 of 2002 and came into force on 1 March 2003. The directive obliges retailers to display the selling price and the unit price per kilo or litre for products. As the Deputy is aware, I will introduce major consumer legislation later this year to establish the new national consumer agency and transpose the unfair commercial practices directive into Irish law. I also decided to review certain EU and domestic secondary legislation in connection with consumer protection.

I decided to review the EU price display legislation as it impacts on a consumer every time he or she purchases a product. On 20 October 2006, I arranged for advertisements to be placed in national newspapers inviting comments on the regulations. A consultation document outlining the issues on which people may wish to comment was also produced and is available on the Department's website. I also arranged that groups and businesses with an interest in these matters be contacted. Now is an opportune time to review these regulations as the EU Commission is conducting its own review. Comments can be sent to my Department by Friday, 17 November 2006. After this, I will consider the responses and decide what further action to take.

Is the National Consumer Agency up and running and available for business?

I will give an example of what happens. The telephone number on the website is the Forfás switchboard. One is put through to voicemail. The person who ultimately answers that voicemail does not know much about the National Consumer Agency or its responsibilities. Another constituent of mine tried to contact the Office of the Director of Consumer Affairs and was left waiting on the telephone for 30 minutes. In the end, the constituent had to hang up in frustration after that long delay. The Minister will forgive me therefore if, based on that information, I do not have much confidence in the National Consumer Agency. I ask him to ensure that the interim arrangements he has established are actually working because they have not worked to date. Effectively, since Ms Foley left office in August, there has been no proper channel of communication or opportunity for the public to make complaints or get the responses one would expect from a professional statutory body, albeit currently run on an interim basis. Consumers are angry when faced with such a frustrating experience.

I will certainly take up that issue with the Office of the Director of Consumer Affairs which is operating as it always has, despite the change of personnel. There may have been a blip on that particular day but the office is up and running, as it always has been and there has been no particular change there. In fact, I recently launched the National Consumer Agency's new website, which is quite comprehensive and effective.

It is a bit like Leas Cross — one would want to be careful what one opens or launches.

It is available for the public to access in terms of rights data and so on. I hope to have the legislation ready for publication before the end of the year. It is the number one priority and is well advanced in the Office of the Parliamentary Counsel. The passage of that legislation will enable us to put the agency on a statutory footing.

Company Liquidations.

Ceisteanna (19, 20, 21)

Róisín Shortall

Ceist:

82 Ms Shortall asked the Minister for Enterprise, Trade and Employment if he has received representations on any matter from directors or representatives of a company (details supplied) since his appointment; if he has received representations from directors or representatives of the companies regarding the current investigations; and if he will make a statement on the matter. [37722/06]

Amharc ar fhreagra

Róisín Shortall

Ceist:

112 Ms Shortall asked the Minister for Enterprise, Trade and Employment the persons, agents or agencies that brought to his attention the situation that led to the commencement of investigations into companies (details supplied). [37723/06]

Amharc ar fhreagra

Pat Rabbitte

Ceist:

137 Mr. Rabbitte asked the Minister for Enterprise, Trade and Employment if his Department or any agency under its aegis has been requested by the Employment Appeals Tribunal to provide information regarding the winding up of a company (details supplied); if so, if they have complied with these requests; the status of the investigations being undertaken by various agencies under the aegis of his Department into the company; if he will introduce new legislation or regulations to prevent the phoenix company scenario occurring again; and if he will make a statement on the matter. [37721/06]

Amharc ar fhreagra

Freagraí ó Béal (3 píosaí cainte) (Ceist ar Minister for Enterprise, Trade and Employment)

I propose to take Questions Nos. 82, 112 and 137 together.

As indicated in replies to previous questions, matters relating to the liquidation of the company concerned are currently the subject of attention by the Office of the Director of Corporate Enforcement and the Employment Appeals Tribunal. Each of these bodies is independent in the performance of its functions and it would not be appropriate for me to comment further on the matters concerned at this stage.

To the best of my recollection, I have not received any representations from directors or representatives of any of the companies referred to since my appointment. The situation regarding the company in liquidation was brought to my attention in May 2006 by the insolvency payments section of my Department in connection with the preparation of a reply to Parliamentary Question No. 138 of 17 May 2006.

As regards new legislation relating to "phoenix" situations, I would draw attention to the changes introduced by Part 5 of the Company Law Enforcement Act 2001, which address problems and issues connected with business failure.

I thank the Minister for his reply and I appreciate that when there are ongoing investigations the Minister is circumscribed as to what he can say. If we can talk about the generality of such cases, however, is the Minister prepared to ensure that once those cases are brought to his attention a monitoring process will be put in place by the relevant company supervision sections of his Department? That would ensure that potential beneficiaries of what appears to be an abuse of loopholes in company law will be able to continue to operate either as company directors or to trade in the marketplace in a way that enables them to evade the sort of responsibilities that other compliant company directors and operating companies must bear. Without prejudice to the outcome of the final case, it would appear that certain practices were engaged in, some of which may have been legal, though sharp. They enabled companies to evade their responsibilities, although we must await the outcome of the judgment; I am not specifically mentioning any particular case. In a buoyant economy, which we all welcome, and at a time of great demand for the provision of services, when competition can be difficult to regulate fairly, it is incumbent upon the Department and agencies under the Minister's aegis to ensure that a level playing pitch exists for all legitimate players, rather than a field day for all the cowboys.

I share the sentiments expressed by the Deputy. I wish to put on the record the main company law provisions in Ireland dealing with such companies. Companies that fail and re-engage in trading under a new name are addressed under the Companies Acts 1963-2005 and, in particular, under the provisions of Part 5 of the Company Law Enforcement Act 2001. Under section 56 of the latter Act, a new reporting regime to the Director of Corporate Enforcement was introduced in respect of all insolvent liquidations, under which the circumstances of the insolvency and the conduct of the company's directors are scrutinised and reported on by the liquidators. Liquidators of such companies are legally obliged to bring proceedings for the restriction of directors unless relieved of this obligation by the Director of Corporate Enforcement. To date, in excess of 650 company directors have been restricted. Powers are also available to the director to pursue directors of insolvent companies which have not been placed into liquidation. While we accept that business failure is an unfortunate part of life, the changes introduced in Part 5 of the Company Law Enforcement Act 2001, in particular, are intended to address problems and issues connected with business failure, including what has been referred to as the "phoenix" syndrome.

Company law is also under continuing review, particularly through the work of the company law review group. I will undertake to revert to that group within the Department to examine this case and ascertain whether lessons can be learned about plugging loopholes. A review of the legislation will determine whether we need to amend it further.

Written Answers follow Adjournment Debate.

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