Personal injury claims drop in 2020 amid Covid restrictions

PIAB chief says lower claims environment is ripe for premium reductions

Photpgraph: iStock

Photpgraph: iStock

 

The number of claims made to the Personal Injuries Assessment Board (PIAB) declined by 16 per cent last year to 26,009 cases as pandemic restrictions led to a reduction in motor accidents and public liability injuries.

Total awards fell by €70 million on the year to about €206 million, and were down €92 million on 2019, PIAB said in its latest annual report, published on Tuesday.

The figures predate personal injury awards guidelines set by the Judicial Council in April, which have subsequently seen the average awards drop by about 50 per cent in value, according to PIAB. The hope is that the guidelines will see fewer injured parties opt to go down the more expensive litigation process to resolve a claim.

Before the establishment of the guidelines, PIAB saw the level of acceptances of awards it had granted fall to 51 per cent last year from 58 per cent in 2015, despite the fact that litigation brought little advantage for claimants, according to the board.

Premium reductions

“Claims costs are reducing significantly due to lower volumes and lower values and this new environment is ripe for premium reductions,” said Rosalind Carroll, chief executive of PIAB.

“Our claims data shows claim numbers are down sharply, while we also know awards are already 50 per cent lower in recent months, as new award guidelines take effect. All parties involved need to fully support the new guidelines, so that acceptance of PIAB awards and consenting to fully use the PIAB process increase.”

The 50 per cent drop first emerged in early June as the Government was updated on the impact of the guidelines.

“Despite significant progress on awards guidelines and insurance reform, low acceptance rates of awards and consent rates remain a problem,” said Ms Carroll. “Though just 2 per cent of claims ever make it through the courts and though average awards by PIAB and through litigation are broadly similar, awards are being needlessly rejected resulting in huge legal costs and delays.”

Ms Carroll said solicitors and insurers have a key role to play by accepting awards that will not materially change in value through costly litigation.

A Central Bank report, published last November, on the motor insurance industry found that, in claims for less than €100,000 – which make up 94 per cent of claimants – the average compensation for a litigated case was €23,572, only marginally higher than the €22,319 amount for a case that was dealt with by PIAB.

However, the average legal cost of a claim pursued through the courts was €14,949, compared to €514 for one that went through PIAB.

A Central Bank report last month on the employers and public liability markets found that there was little or no financial benefit for injured parties going the legal route in the vast majority of cases, which settled for less than €150,000. However, legal costs of cases pursued through the courts were a multiple of cases settled through PIAB.

The Government is currently seeking to reform PIAB, which was established in 2004, to allow it assess more cases. As things stand, the board cannot assess cases such as when psychological damage is part of the injury or when there are complexities relating to the claim, such as a number of injuries or where the claimant has a pre-existing injury or condition.

The Government is also exploring allowing PIAB engage in mediation. It currently operates a desk assessment system that does not involve oral hearings.