Dáil Éireann Debate, Tuesday - 4 December 2018
54. Deputy Billy Kelleher asked the Minister for Business, Enterprise and Innovation the steps being taken to reduce the excessive sums awarded for whiplash compensation claims in view of the latest data published by the Personal Injuries Assessment Board, PIAB. [50768/18]
Amharc ar fhreagraI ask the Minister for Business, Enterprise and Innovation the steps that have been taken to reduce the excessive sums awarded for whiplash compensation claims in view of the latest data published by the Personal Injuries Assessment Board, PIAB. We are all aware that Ireland is out of step with its European partners. Claims for whiplash in Ireland average around €20,000, whereas across the water the average is between €3,500 and €4,000. There is a fivefold difference. We are well out of step, and measures must be implemented immediately to address this.
The cost of insurance working group, chaired by my colleague, the Minister of State at the Department of Finance, Deputy D’Arcy, has undertaken a review of the factors which are influencing the increased cost of insurance. Its objective is to identify immediate and longer-term measures which can address increasing costs while bearing in mind the need to maintain a stable insurance sector. The first phase of this work involved an examination of the motor insurance sector. The second phase involved an examination of the employer liability insurance and public liability insurance sectors.
The work of the cost of insurance working group is complemented by the work of the Personal Injuries Commission, PIC. I was pleased to submit the second and final report of the PIC to the Government on 18 September 2018. The publication of this report concluded the challenging work programme of the PIC since its establishment in January 2017 on foot of a recommendation in the cost of insurance working group motor report.
The benchmarking exercise, undertaken by independent consultants on behalf of the PIC and published in this second and final report, has revealed that the level of general damages for whiplash injuries in this jurisdiction runs at a multiple of typically 4.4 times that of our nearest neighbours, England and Wales. This multiple is of such a magnitude that the PIC is satisfied that it calls for a response that is both effective and achievable in the shortest possible time.
The key recommendation in the report follows the example of judicial intervention which has occurred in Northern Ireland and in the UK, namely the introduction of judicial guidelines for judges. The PIC believes that the imminent statutory establishment of the Irish Judicial Council provides a unique opportunity to seek and obtain guidance for judges in measuring general damages for personal injury. Judicial guidelines should lead to greatly increased levels of consistency in awards, enable early resolution of claims and reduce costs.
I welcome the publication in November by the Personal Injuries Assessment Board, PIAB, of data on whiplash related injury compensation awards resulting from road traffic accidents. The publication of these data delivers on a recommendation from the first report of the Personal Injuries Commission published in December 2017 and involved analysis of approximately 4,500 awards made in the first six months of 2018.
Additional information not given on the floor of the House
The Personal Injuries Assessment Board (Amendment) (No. 2) Bill 2018, which is scheduled for Committee Stage this evening, is an important measure to encourage more personal injury claims to be settled within the Personal Injuries Assessment Board, PIAB, process. PIAB facilitates the objective assessment of damages at a much lower delivery cost and in a far shorter timeframe than through litigation. PIAB processes claims within 7.3 months compared to several years for litigation. Therefore, encouraging more claimants to finalise their cases through the PIAB model rather than resorting to litigation should lead to cost savings in the claims environment. This is good for society as a whole as it delivers compensation more quickly, with lower costs and predictable outcomes.
We are primarily talking about people who are making fraudulent claims. There is no doubt that people see whiplash injuries as a soft money-making proposition. As a society and as an Oireachtas we have not challenged this issue at all. We consistently turn a blind eye to the fact that people are scamming in this way and forcing up the cost of insurance. That has profound implications for people, especially young people and rural people who have no choice in the matter. They need a car, but the cost of insurance is excessive.
The Minister of State at the Department of Finance, Deputy D'Arcy, in one of his only recent announcements in the area of insurance, discussed the holding of a referendum to cap awards. The Minister knows as well as I do that that is not likely to happen in the near future. It would be very helpful if he brought forward a judicial council Bill instead of sending out press releases. Such a Bill would establish a council which would give effect to what is recommended in terms of the Judiciary having guidelines and its members being able to educate themselves about awards and to set benchmarks. The idea of having a referendum, which is a major announcement, undermines the whole process and diminishes the credibility of it.
The work my Department is doing on the PIAB Bill is progressing, and the establishment of the judicial council by the Minister for Justice and Equality, Deputy Flanagan, is another important element of reform. These form part of a suite of measures taken by the Government which will help to reduce insurance claims. Other measures are also being taken. The Insurance (Amendment) Act 2018 was signed into law in July this year. It is important legislation and will address the Setanta legacy. The Central Bank (National Claims Information Database) Bill 2018 is another very important step forward for the work of the cost of insurance working group. It passed Committee Stage last month and it is hoped this Bill can be enacted by the end of the year to allow the database to be operational from early 2019. The Bill also included two amendments to section 8 and section 14 of the Civil Liability and Courts Act 2004 to implement recommendations contained in the employer and public liability report.
These measures are very important for stakeholders as, when implemented, they should make it easier for businesses and insurers to challenge cases where fraud or exaggeration is suspected.
We have discussed this issue for a long time. I am not questioning the Minister's bona fides, but the reality is that the pace of progress is lethargic. We only have to look at the Judicial Council Bill 2017 which was only recently sent to the Seanad. It is a key recommendation and an important component. We have been talking about the Judicial Appointments Commission Bill 2017 for the last year and a half. It is an integral part of ensuring the independence of the Judiciary and streamlining its ability to self-assess to ensure it is making awards that are commensurate what is required and with those made in other countries. A Garda fraud unit is another key recommendation, but it has yet to be established. The insurance industry is talking about financing it. There would be no cost to the State. We need action on that issue now. At the end of the day there must be sanctions. I introduced the Civil Liability and Courts (Amendment) Bill 2018 which is to proceed to Committee Stage at some point. I sincerely hope it will be supported, while accepting that amendments might be required. It will send a strong message that fraudsters and chancers will face the rule of law and that there is a downside to fraudulent claims.
I agree with the Deputy. Fraudsters, gangsters and chancers should not be rewarded through fraudulent claims. That is wrong. The insurance companies need to challenge such claims and should not pay out until they are fully satisfied that a claim is genuine. It is a priority of the Minister for Justice and Equality, Deputy Flanagan, to proceed with establishing the judicial appointments council and the Garda fraud unit, a recommendation made in my Department's report. There are a number of approaches; the problem will not be fixed, with just one solution. Several things are happening concurrently. The Government is satisfied that when all of the different items of legislation are passed and enacted, they will make a difference. We are doing everything we can because the Deputy is right - people who claim fraudulently should not be rewarded. However, we have to find a balance with the needs of those with genuine claims. It is all about finding a solution that will not impact negatively on those who do deserve compensation.
