Referendum may be needed to drive down insurance awards – Minister
Judges failing to act on high compensation culture pay-outs, says Michael D’Arcy
A report by the Personal Injuries Commission has found payouts for whiplash and other soft tissue injuries are four or five times those in the UK. Photograph: iStock
A Government Minister has reissued his warning that Ireland faces a referendum to drive down compensation pay-outs for whiplash and minor injuries, if judges won’t act to cut damages.
Michael D’Arcy, Minister of State at the Department of Finance, said the “highest levels of awards in the world” are pushing up insurance premiums that are collapsing businesses and “those levels of awards are coming from the judiciary”.
“Nobody said stop,” he added.
Mr D’Arcy, who has responsibility for insurance policy, said he hoped to push a bill through both houses of the Oireachtas after Easter, which would allow for a judicial council be set up by summer.
The Judicial Council Bill which, if passed, would allow judges to recommend guidelines for injury payouts has been sitting in the Seanad for nearly 700 days.
“If this doesn’t happen, what will be required in my view is a referendum,” he said.
“Let the people of the country make a decision that the Oireachtas has the authority to cap the awards.”
But former High Court president Nicholas Kearns cautioned that the judiciary and legal profession remain “wary” of any attempts by politicians to remove their discretion over pay-outs.
“From the judges point of view, capping is preferable to fixing terms by politicians,” the Personal Injuries Commission (PIC) chairman said.
“This is something that judges feel very wary about and members of the legal profession feel very wary about.”
Judges are “not afraid of facing up to the reality that change is required”, he said, adding that a number of recent High Court decisions “reflected the need for re-calibration”.
Mr Kearns accepted there was a “crisis, that people are losing jobs” and that “businesses are having to consider closure because they can not afford levels of insurance.”
“Closure is the order of the day. People are being thrown out of work,” he told RTÉ’s Today with Sean O’Rourke show.
A report by the PIC has found payouts for whiplash and other soft tissue injuries are four or five times those in the UK.
The commission “unanimously concluded” that the quickest and least disruptive way to make speedy progress in reducing compensation pay-outs would be for a judicial council to be established that could give “guidance” on appropriate damages.
Interim measures could also be brought in during the meantime, Mr Kearns said.
The judge added that capping of damages by some sort of a legal measure “is not unknown” and was done before to restrict pay-outs for mental distress caused by fatal accidents.
Legislation could allow for a similar measure confined to small injury cases, he suggested.
“That is where the problem lies, and it has to be tackled,” he said.
Mr D’Arcy added: “The biggest issue we have in insurance in these lower level claims, are the levels of awards. People are getting tens of thousands of euro for pretty inconsequential injuries: bruising; non-breakages; issues of that nature.
“The biggest thing we have to do is to reduce the level of these awards. If you have lower levels of awards, you’ll have a lower premium. It is higher premiums that putting businesses out of work.”