The Government minister in charge of insurance policy has said he is “not afraid” to push for a referendum that would reduce personal injuries awards that lead to soaring insurance premiums.
Michael D'Arcy, Minister of State at the Department of Finance, said he would seek a referendum if the proposed Judicial Council, when established, did not recalibrate injuries awards in line with other countries.
Figures released by the Personal Injuries Assessment Board this week showed that victims of whiplash – a soft-tissue injury to the neck or upper back – were awarded an average of just over €20,000 in the first half of this year for pain and suffering, medical expenses and loss of earnings as a result of road traffic incidents.
The board made this information public on a recommendation by the Personal Injuries Commission that found this sum was 4.4 times higher than for similar whiplash injuries in England and Wales.
The Fine Gael junior minister told The Irish Times that the Personal Injuries Commission, chaired by former High Court president Nicholas Kearns, comprised members of the judiciary and legal profession who were aware these disproportionate payouts "aren't makey-up figures."
He said that he hoped the Judicial Council would act to reduce these awards once it was established and the council had assessed the book of quantum on court awards by the end of next year.
He expressed concern about opposition politicians “filibustering” important pieces of legislation such as the new drink driving laws that was “gobbling up the time” on the passage of legislation establishing the council.
“I can only assume that the judicial council, when they get this, will recalibrate the awards in line with other jurisdictions. That is what I hope and anticipate will happen, and will happen within 15 months,” he said.
"If it happens, then the Oireachtas doesn't have to step onto this pitch. It is really in the hands of the judiciary when it gets this. If it doesn't happen in this way, then I am not afraid to step onto the pitch."
The minister said he was “not looking for a row” with the judiciary, the industry or “the legal world” but between these three, the country now has “the highest awards in the world.” These were resulting in high insurance premiums that were damaging business and were unacceptable for consumers.
Mr D’Arcy outlined a “pathway” to a referendum if the council does not, as he expects, reduces the quantum of personal injuries awards by the start of 2020. This would include checking whether the Oireachtas has the legal authority to override the discretion of judges in the awarding of compensation claims.
He has asked the Attorney General for an opinion on whether the Oireachtas has this authority and is awaiting a response and is also seeking a view from the Law Reform Commission.
Should the Oireachtas not have this authority, then the minister says he would examine the possibility of holding a referendum to give lawmakers the power to set guidelines on the level of awards.
The Government has not made a decision on a potential referendum, he said, but he has informed the Fine Gael parliamentary party of the need to adjust personal injuries court awards to reduce the cost of insurance.
“This is a huge societal issue, the cost of insurance. Younger people who have a car that is not particularly valuable are being asked to pay €4,000 or €5,000 a year to insure it. It is preventing people getting to and from work. These are huge societal issues that I am not prepared to sit back and do nothing about,” he said.
The Personal Injuries Assessment Board declined to comment specifically on the potential for a referendum to adjust the high awards handed down by the courts.
“We in PIAB strongly support the work of Justice Nicholas Kearns and the PIC which recommends that the Judicial Council take on the setting of guidelines for personal injuries awards and also that the Law Reform Commission examine the issue of legislative/constitution issues,” said a spokesman for PIAB.