The personal injuries guidelines came into effect in April 2021 and replaced the Book of Quantum used by the courts in assessing damages in personal injury cases. The guidelines must, by law, be taken into account by the courts and the Personal Injuries Assessment Board (PIAB) when making awards, although there is scope to depart from them.
The guidelines were intended to bring about a more uniform approach to the setting of awards – and a reduction in their size – and indirectly to lower insurance premiums. Their introduction in the midst of the pandemic shutdown meant that their initial impact was muted, particularly for injuries related to motor vehicle accidents.
The Central Bank has now published data on motor insurance claims for 2022, the first year since the guidelines that motor traffic was not dramatically reduced by measures to contain Covid-19. The results are a mixed bag, but there are some encouraging signs that the guidelines are having the desired effect. According to the Central Bank, half of all motor insurance injury claims were settled under the guidelines in 2022, up from 16 per cent in 2021.
Of the number settled within the guidelines, almost all were settled either directly with the insurer or via PIAB and involved awards that were between 32 and 47 per cent lower than comparable claims made under the Book of Quantum in 2021.
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‘I could have gone to California. At this rate, I probably would have raised about half a billion dollars’
The picture is less encouraging when it comes to the other half of claims: the cases that go to court. Only 6 per cent of cases that went to court were settled under the guidelines and as a result the impact of the guidelines cannot really be quantified. The court channel accounts for 77 per cent of awards by value but only 50 per cent of cases by number. It is not clear whether the implied higher payouts are down to courts not embracing the guidelines when agreeing settlements or the fact that more serious cases – involving more grievous injuries – tend to go to court.
More work is clearly needed to answer the question but the relatively low use of the guidelines in courtrooms is a matter of concern.