A leading insurance broker for small businesses has called on the Government to overhaul the current system for minor injuries awards, proposing that claimants are paid only medical costs and loss of earnings in a bid to deter “overly litigious” claimants.
Insurance broker CFM Group also warned that delaying the introduction of legislation to create a committee to help redraw the guidelines on personal injury injury payouts will cost small businesses thousands of euro in higher insurance costs.
Under the current system, claimants can be awarded thousands of euro in general damages for pain and suffering caused by minor injuries, with medical expenses and loss of earnings awarded in addition to this figure. The group is proposing introducing zero general damages for minor injuries, ie those that have substantially recovered. CFM Group, which acts as insurance broker for hundreds of shops and small businesses throughout the country, cited examples of claimants who have returned to sporting activity such as five-a-side football or running 10km in the two or three weeks following injuries.
"We all bruise, cut or scrape ourselves over the course of our daily lives – most of the time we don't even give it a second thought – unless perhaps we have to bandage a cut or perhaps put an ice pack on a leg," said Jonathan Hehir, managing director at CFM Group. "However, once the opportunity to apportion blame comes into the equation these minor injuries can take on a much larger form and the lure of 'easy' financial compensation can prove too tempting for some people."
The scale of recommended pay outs, known as the Book of Quantum, includes more than €19,000 in general damages for a finger sprain, almost €28,000 for a minor wrist sprain and €20,000 for minor soft tissue damage in the foot. However, general damages awards can be greater than this.
“We come across public liability cases every day and one thing that is wholly apparent is that often what is paid out in a claim, does not honestly reflect the injury sustained – it massively overstates it,” said Mr Hehir.
Such claims can lead to financial difficulties for businesses, with insurance costs spiralling as claims costs increase.
The insurance group said if a minor injury had no practical impact on the claimant’s daily life a couple of weeks after it was sustained, that should be considered in deciding an insurance settlement.
“I think most people would agree that awarding someone medical costs plus any loss of earnings is a fair resolution in instances like these. But the way our system works at present, there is potential there for claimants to get six months’ average earnings on the back of a very minor injury – and we believe that it is this financial temptation that is making some claimants overly litigious.”
The group accused the Government of taking its “foot off the gas” on the matter of insurance premiums, because motor insurance has started to come down and it is no longer an issue high on the public agenda.
"Minister D'Arcy has warned that if the Judicial Council Bill is not passed in this current Dáil session before the summer recess on July 11th, the establishment of the Judicial Council would be delayed until late 2020," Mr Hehir said. "Each year of a delay will add thousands of euro to the insurance bill of shops and other businesses with high footfall, and many of those businesses simply won't survive another year of inaction."