Progress on reduced insurance premiums still leaves much to be done

Award values for smaller injuries have fallen but market still not working properly

The huge effort that went into the creation of the Judicial Council and its adoption of guidelines on personal injury award levels has, it would appear from the latest figures released by the Personal Injuries Assessment Board (PIAB), been a success in so far as the driving down of award values for smaller injuries is concerned. But getting to the ultimate objective of reduced insurance premiums was always going to involve further effort.

The vast majority of personal injury claims are settled between the claimant and the insurer rather than by way of PIAB or the courts.

In the High Court during the week, Mr Justice Michael Twomey noted that an "impecunious" person who takes a personal injury claim to that court, rather than, say, the District Court, increases the pressure on the insurance company to come to a settlement, because even if the plaintiff loses, the insurer will end up out of pocket because of the legal costs it has incurred when responding to the claim.

The observation about legal costs applies generally, and undoubtedly the costs involved in defending claims is one of the reasons that claims that might not succeed in court are nevertheless being settled by insurance companies.


More information on the size of the settlements being made by insurers was the focus of much comment in the wake of the PIAB report showing an average 40 per cent drop in award values in the wake of the new guidelines.

Are insurance companies settling cases for higher values than the Judicial Council guidelines suggest are appropriate? If they are, then maybe we can find a way to tackle that problem too.

Meanwhile, motor insurance premiums are falling, while public-liability premiums, it appears, are still going in the wrong direction. That market has a dearth of underwriters and is not working properly. Given the toxic effect high premiums have on such a wide range of societal activities, there is no choice but to continue the effort to sort out this crisis.