Courts data undermines ‘industry spin’ on insurance claims

Data from the courts showing a slight decrease in the number of personal injury cases taken last year, and a 29 per cent fall in the value of awards at High Court level, have exposed as false the explanation offered by the insurance sector for premium levels, a number of parties have said.

The figures show the "industry spin" that Ireland has a "massive compo culture" is simply not true, according to Sinn Féin's finance spokesman, Pearse Doherty.

Legal costs and claims are going down yet premiums are going up, he said. “There’s only one thing driving that. It’s greed,” he claimed.

Total personal injury awards made in the High Court in 2018, were €57.5 million, down from €85.3 million the previous year, according to figures contained in the latest annual report from the Courts Service.

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The figures, which do not include medical negligence cases, show the average award dropped to €171,201, from €243,288 the previous year, a drop of 29 per cent.

While most cases are settled rather than go all the way to judgment, the level of the awards made in cases that go to judgment, influences the payments in cases that are settled.

The figures in the annual report from the Courts Service show the average award at Circuit Court level rose, to €19,304 in 2018 from €18,488 the previous year, a rise of 2.8 per cent.

While most personal injury claims occur at District Court and Circuit Court level, the bulk of the value of the claims settled every year happens in the High Court.

The Director General of the Law Society, Ken Murphy said it was "profiteering" by the industry rather than false claims in the courts that was driving the rise in non-life insurance premiums.

“It was the insurance companies themselves, not the victims of accidents, the judiciary or the legal professoin, who must answer for the increadibly burdensome premiums” the industry is choosing to charge, he said.

Minister for Justice Charlie Flanagan, said the insurance sector had to be more transparent and to justify the "extraordinary" increases in insurance premiums "which I don't accept are down to awards."

The Chief Justice Frank Clarke, speaking at the launch of the Courts Service report on Monday, noted the "significant drop" in the average High Court award and said it was "an important objective set of figures which needs to be taken into account in the current debate."

The organisation that represents small and medium-sized businesses, Isme, said it was “heartened” by the small decline in the number of cases coming before the courts.

However, it said it was awards at Circuit Court and District Court level that affected its members the most and that in both of these courts the average claim made had increased in size during 2018.

“The figures suggest that the Government has yet to do the heavy lifting in tackling the insurance crisis. On the basis of the Courts Service annual report, Irish businesses can have little hope of respite.”

The group representing the insurance sector, Insurance Ireland, said in a statement the “continued inflation in the average awards at District Court and Circuit Court level highlight the need for the Judicial Council to recalibrate personal injury award levels before the end of the year.”

A Bill to establish the Judicial Council is expected to complete its passage through the Oireachtas this week. The council will then establish a committee which is to draft guidelines on personal injury awards for the judiciary, in a process that could take two to three years.

It will be a matter for the council, which is comprised of the State’s judiciary, to decide if it considers awards for different injuries should be increased, decreased or remain in the range at which they are currently set.

The chairman of the Personal Injuries Commission, Mr Nicholas Kearns, has said rulings in recent years in the Court of Appeal have had the effect of recalibrating downwards the awards that are being made in the High Court, but the effect of these decisions by the appeal court, is not making its way through to Circuit Court and District Court level.

The level of awards for soft tissue injury in the lower courts is higher than it is in England and Wales, but it is not a given that the council will conclude that the Irish system should alter its award levels.

The chief executive of Insurance Ireland, Kevin Thompson, said the vast majority of litigated personal injury cases are for moderate injuries such as soft tissue damage, which usually have compensation awards under €30,000. These are handled in the lower courts.

“The recalibration of the lower value awards must be the primary focus of the Judicial Council and it is our strong view that this work should be completed by the end of the year.”