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In the important effort to address the damaging effect of high insurance premiums in such areas as public liability and employer liability cover, information plays a very important role.
For this reason the publication last week by the Personal Injuries Assessment Board (PIAB) of a report showing the effect of the new judicial guidelines on the value of the personal injury awards that the board is recommending, is to be welcomed.
The guidelines, which govern the size of awards made by the courts but also the value of the assessments made by PIAB, were introduced in late April. The PIAB report shows that in the five months since then, the size of the awards being recommended by it has dropped by an average of 40 per cent.
Unless liability is being contested, most personal injury awards must go to PIAB for assessment before they can be taken to the courts. Either side can reject the value of the award recommended by PIAB, and proceed towards the courts in the hope of a different award value, but a significant proportion of the assessments are accepted.
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It follows, therefore, that a sharp drop in the value of the assessments being made by PIAB will lead to a drop in the costs of these claims for insurance companies. That, in turn, should feed into an easing of insurance premium prices.
But to maximise the return on the introduction of the guidelines, it is vital that more information is made available on the type of settlements that the insurance companies are agreeing to prior to, and subsequent to, the PIAB process, as well as in cases where liability is being disputed.
Likewise, it is vital that more information is made available on the type of award decisions that are being made in cases that are ruled on by the courts, particularly at District Court level.
The legal and other costs associated with litigation can add approximately 60 per cent to the overall cost of a claim, so everything than can be done to encourage the settlement of claims without parties resorting to litigation should be encouraged.
It goes without saying that injured parties are entitled to fair compensation for injuries they suffer and for which others can be shown to be liable, and that nothing should be done to block access to that entitlement.
However, if it can be shown by the production of all the relevant information that a party who suffers a particular injury is likely to get the same settlement, whether they commence litigation or not, this should act as a disincentive to claimants resorting to legal action. And that, in turn, should maximise the effect of the guidelines in terms of driving down costs for insurance companies, and facilitating the drop in premium prices that society needs.