Government to ask if insurance payouts cap could curb premiums

Planned move on personal injury awards part of initiative to lower premium costs

The Government is planning four major measures to try to curb escalating premium costs for drivers and businesses.

The Government is planning four major measures to try to curb escalating premium costs for drivers and businesses.


The Government is to investigate the possibility of capping personal injury payouts as part of a new drive to lower insurance costs and payments.

It is one of four major measures that the Government is planning to try to curb escalating premium costs for drivers and businesses, as well as high awards for damages in personal injury cases in Irish courts.

The other measures are for the Garda Commissioner to consider setting up a special insurance fraud investigation within the Garda National Economic Crime Bureau; new guidelines (a book of quantum) for judges on appropriate award levels for soft-tissue and whiplash injuries; as well as the publication of a key information report on employer and public liability insurance claims.

The Minister for State with responsibility in this area, Michael D’Arcy, said the Government was looking at two possible ways of capping payouts.


The first is the formal commencement by the Law Reform Commission of an examination into the possibility of capping levels of damages for personal injury actions.

The second could be by means of a Private Members’ Bill which has been tabled by Fine Gael senator Tony Lawlor with the aim of putting an upper limit on payouts.

Mr D’Arcy said if that progressed to second stage, the Attorney General’s office would then determine if it was constitutional.

The development comes ahead of a Private Members’ motion by Fianna Fáil in the Dáil this week calling for a response to high insurance premiums, particularly in the motor and public liability areas.

The Cost of Insurance Working Group made 33 recommendations in its 2017 report on the cost of motor insurance and 15 further recommendations in its 2018 report on employer and public liability insurance. Those 48 recommendations are all now in the process of being implemented, Mr D’Arcy said.

There were suggestions initially that the new Garda unit to investigate insurance fraud would be paid for by the insurance industry but that is not an option, the Minister said.

“I was always opposed to the insurance industry financing the work of the Garda Síochána. If the commissioner agrees to the new unit, the funding will come from the exchequer,” he said.


The Wexford TD said the insurance industry could help fund capital investment to deter insurance fraud and evasion, such as road camera technology with number plate recognition capabilities that would allow authorities to identify cars being driven without insurance.

He said the work to recalibrate the book of quantum and bring it more into line with the UK, where awards tend to be lower, is contingent on the passing of the long-awaited judicial council legislation, currently making its passage through the Oireachtas.

He also said he was opposed to insurance industry being too quick in some instances to make early settlements in cases where there is potential exaggeration or fraud.

Referring to the lack of criminal investigations in the wake of the uncovering of fraud cases in insurance claims, he said there was currently a disconnect and it needed to be remedied.

“Insurance cases are in the civil courts and where there are elements of fraud and exaggeration the judge is not in a position to initiate a criminal investigation.

“We need to adopt a more cohesive structure where if a judge in the civil court is of the view there is fraud and exaggeration, he or she can trigger a mechanism where the Garda Síochána become involved.

“We need a process that will allow it flow from the civil courts to the Garda and to the Director of Public Prosecutions,” he said.