Most public liability insurance claims are fraudulent and steps are being considered to tackle the problem, according to the Minister of State for Labour Affairs.
Mr Frank Fahey yesterday told The Irish Times companies were investing heavily in improving their health and safety standards. There was no point in doing so, however, as long as fraudulent claims were being made.
Mr Fahey said he hoped to bring together interested parties including IBEC, the insurance sector, trade unions and health-and-safety interests with a view to drawing up a database of claims being settled out of court.
A large number of cases, he said, were being settled by insurance companies and their lawyers without the knowledge of the companies concerned. He hoped to have such cases examined and to "expose some of these claims and deals being made by lawyers".
His comments were welcomed by Mr Pat McDonagh, the chairman of the Alliance for Insurance Reform, a lobby group claiming to represent more than 300 businesses. Mr McDonagh said the group was already drawing up a database of its own.
Since his own company, the Supermac's fast-food chain, had highlighted the problem of fraudulent claims, there had been a 50 per cent drop in public liability claims against it, he said.
Of eight cases taken against it since July, he added, it had won five in the courts and two were withdrawn. The eighth had been settled on the advice of an insurance company because of the potential legal costs.
He agreed with Mr Fahey's assertion that most public liability cases taken were fraudulent. "I would say in excess of 50 per cent are either fraudulent or exaggerated, which is the same thing in my view."
Mr McDonagh said the alliance, which met the Tánaiste, Ms Harney, last month, was trying to get a change in the law to ensure companies had to be informed of settlements being made on their behalf. He accused the legal profession of driving the high rate of settlements and said insurance companies had been complacent in allowing it to happen.
However, Mr Ken Murphy, the director general of the Law Society, said the view of solicitors experienced in dealing with public liability cases was that the number of invented claims was "tiny". Fraudulent claims should be "resisted vigorously" and, in the view of the Law Society, those who made them "should go to jail".
The fact that a case failed in the courts did not mean a fraudulent claim had been made, he said. Plaintiffs had to meet an onus of proof and the difficulties in succeeding in cases were substantial.
The question of exaggerated claims was a grey area and it was natural for plaintiffs to "put their best foot forward" going into a case. However, claims of injury had to be verified by medical practitioners for both sides.
