Last week’s statement by the Central Bank’s national claims information database highlights once again that reform of the Personal Injuries Assessment Board (PIAB) needs to be the number-one priority of the Government if it is to deal with the issue of insurance costs.
The data showed there was little or no financial benefit for injured parties going the legal route in the vast majority of employers’ and public liability cases, which settled for less than €150,000. However, the legal costs were a multiple of cases settled through PIAB. Legal costs for a litigated settlement averaged €35,268, compared with €902 for the PIAB route. The reality is that under the current system everyone loses – the person who pays the premium, the injured party and the whole economy. But lawyers do really well.
The experience is that the claimant is the party that benefits the least in this broken system. In claims that Supermac’s has been involved with, only €1 in every €12 was paid to the claimant. The rest has been paid to legal counsel, solicitors and other professionals. What the country finally needs on insurance claims is a fairer system that everyone will believe in and which will give everyone a better result.
There has never been a more important time to cut insurance costs in Ireland. As we reboot the economy, it will be critical for the IDA and Enterprise Ireland to attract and grow businesses here. The reality is that without changes, many citizens and SMEs may not be able to afford insurance when the economy recovers.
I have been dismayed by some of the experiences of business people throughout the country. The feeling of being abandoned is to the forefront. While the Government argues it is making vast changes, none of us see the cost of insurance falling significantly. Business people think that the much-heralded changes in judicial guidelines are just a fudge. Politicians need to grasp the depth of feeling there is on this issue – businesses are not being heard on insurance.
Government has a ready-made solution: to reform PIAB immediately rather than endlessly procrastinating on the matter.
While the award guidelines are undoubtedly part of the solution, there will continue to be a weakness in the system without legislation passed. That didn’t happened by the summer recess but needs to happen as soon as possible in the autumn. A political consensus exists from the Taoiseach down on the issues, and I hope the matter can be expedited.
It is important that the Personal Injuries Assessment Board Act 2003 is amended to ensure that costs are not a barrier to access PIAB’s services. It is also vital that a new section 54(1)b of the Act gives it the statutory authority and duty to include it in the preparation of the Book of Quantum general guidelines, as to the amounts that may be awarded or assessed in respect of specified types of injury, and for the first time, general guidelines for amounts to be awarded or accessed for psychological injury.
The PIAB should also have the power to refer an application to An Garda Síochána where information provided leads it to suspect that a criminal offence has been committed, such as fraud. The board should also be empowered to furnish An Garda Síochána with any documentation it deems relevant for any Garda investigation into an application. This should include a provision that stops the time, as calculated under the Statute of Limitations, allowed for the taking of a personal injuries claim until An Garda Síochána makes a decision as to whether the matter should be prosecuted.
The board should solely have the power to create personal injuries registers, this responsibility no longer resting with the Court Service. The Court Service should transfer any information relating to the current register to the PIAB and legislation should create an express statutory provision requiring the Court Service to provide it with the information necessary to populate the register such as court awards or orders dismissing the case.
Personal injuries register
The legislation should provide, too, that an authorisation provided by the PIAB after an assessment has been rejected by either the claimant or respondent can only result in an appeal on a point of law to the High Court. The decision of the High Court in any such appeal of the assessment should be final and where an appeal is brought by a party in relation to the board’s assessment of the claim, the High Court will not vary the amount recommended to a claimant in an assessment except in exceptional circumstances, at the court’s discretion. The assessment made by the PIAB should be capable of being utilised in proceedings before the High Court where an appeal is on a point of law.
The setting-up of a personal injuries register at the PIAB is a natural progression for the board, as is the power to report fraud and to draw up a book of quantum for specified injuries.
The proposals to provide for legal representation before the board for assessment hearings would decrease legal costs in the 79 per cent of cases that do not currently resolve before the PIAB. The majority of these cases, under these proposals, would now resolve before the PIAB unless one party appeals to the High Court on a point of law. There would be significant savings in legal costs generally, given the reduction in matters proceeding to court.
If the current system of determining costs and payouts in personal injuries claims was applied to land purchase, you and me would still be crawling through Naas on bad roads. The model is there, let’s copy it.
The PIAB should be given its wings to fly again. In the five-year period covered by the Central Bank study, only 16 per cent of all cases went through the board. We need to reverse that immediately.
We need to correct the balance in favour of honest claimants, fair process and affordable, equitable outcomes. That would be good for the people, good for business and good for Government.
Pat McDonagh is managing director of Supermac’s