A PERSONAL injuries tribunal to cut legal costs in small claims cases and the changes to help reduce cost of employer liability insurance should eventually result from the root and branch examination of Irish insurance costs published yesterday.
The report by consultants Deloitte and Touche, commissioned by the Minister of State for Commerce, Science and Technology, Mr Pat Rabbitte has taken more than 18 months to prepare. Yesterday, Mr Rabbitte announced working parties to examine the setting up of the tribunal and to examine other issues raised in the report.
One of the issues considered was the court system and legal costs. Mr Rabbitte described the system as "cumbersome, plagued with delays and high costs". The system added significantly to the cost of settlements and compensation awards, he said.
To reduce costs in the court system, the consultants recommended that it should be mandatory that expert witness reports be shared, that standard accident report forms be produced for use in evidence and that a stern view be taken of fraudulent claims, with details passed to the Director of Public Prosecutions where appropriate.
Interest at a realistic rate should be paid on lodgments to courts to provide for early settlement - at present an interest rate of 1 per cent is paid. A commercial bank should be invited to take over the management of lodgments, according to the consultants.
Where plaintiffs have a history of previous claims, this would be made known to the courts. Intruders or trespassers should get no protection from the law even if they suffer injury and all accidents should be reported within six months, though the three-year period allowed for deciding on taking an action should remain in place.
The personal injuries tribunal should be set up to hear cases where liability is not in dispute. The parties would have the right to appeal to the courts. The tribunal should consist of a chairman experienced in health and safety/ accident compensation and two members representing employers and workers.
Claimants or defendants would not need legal representation. The tribunal could use the award guidelines which the consultants suggested be drawn up by the judges. The consultants forecast potential savings of about £50 million a year if the tribunal was processing all personal injury claims where defendant and plaintiff were agreeable, including those arising from motor accidents.
On "no foal, no fee" arrangements advertised by some solicitors, the consultants found no direct evidence that this has increased the number of liability claims. Employers have argued that it has increased the proportion of dubious or speculative claims.
The consultants said Irish solicitors should be free to enter these arrangements "subject to consumer safeguards". But some "no foal, no fee" advertisements may be misleading if they state that there will be no downside for the client if a case is lost. In those circumstances the client may be liable for the defendant's costs. The consultants recommended that solicitors should be obliged to tell their clients that costs will be incurred if an action fails.
The consultants found that claims costs under employers liability insurance - for injuries sustained in the workplace - are between 40 per cent and 50 per cent higher in Ireland than in Britain. This reflects longer settlement periods because of delays in the courts, differences in composition of the labour forces in both countries as between higher risk and lower risk activities, medicost inflation and higher legal costs.
While personal injury awards, legal fees and costs are the biggest components of liability and motor insurance costs, very little statistical information is available on these costs to be monitored, according to the Deloitte and Touche.
The Department of Enterprise and Employment should contract one of the private publishers which report court cases to compile annual tables of personal injury awards split into special and general damages and costs by type of injury, according to consultants. Lists should be compiled for the District, Circuit and High Courts. Insurers should be asked by the Department to supply information to complement and verify the court statistics.
Insurers and company representatives should agree guidelines for insurers on processing claims with special reference to the decision on whether to contest claims and on improving consultation with policy holders, the consultants recommended. This followed complaints from policyholders that insurance companies settle "nuisance" claims without consulting policyholders who would often contest liability.
Judges should draw up guidelines on the amount of general damages to award in personal injury cases, the consultants recommended. The judges could call on specialist advice as required. Publishing these guidelines would assist in reaching early settlements because the parties would know what the final award was likely to be, the consultants said.
Guidelines should be updated from time to time and compared to "suitable comparators such as the average industrial wage, so that awards would be related to the general level of incomes and living standards in this country".
