Charlie Weston: It is high time insurers started fighting dodgy claims
Pay them to go away - that seems to be the way of doing things in the insurance industry. And that applies even when the claim being made is spurious.
It certainly appears to this observer to be one of the key reasons that the cost of motor insurance is going up exponentially.
In the last three years alone, the average premium for insuring a car has risen by 67pc, according to Central Statistics Office figures. That means that a car that cost €400 to insure three years ago now costs close to €700 - an extra €300.
We know that insurers messed up - and badly. They underpriced premiums by getting into an unsustainable price war. They also under-reserved.
Insurers blame lawyers for encouraging claims and for charging high legal costs.
There is indeed a significant issue with claims. Some solicitors are engaged in claims harvesting - this involves solicitors defying the rules of their regulatory body (the Law Society) by using websites to prompt people to make claims, often when they had not considered doing so.
Some solicitors are not operating these websites themselves, but are bulk buying claims from non-lawyers who operate the websites. Claims harvesting encourages spurious claims, which is why lawyers are not allowed to engage in it.
But could it be that the insurance industry is facilitating this activity that it frowns upon and is playing into the hands of some unscrupulous lawyers whose clients are making spurious claims?
We know that some lawyers are adept at undermining the system for their own advantage.
The Injuries Board was set up to deal with personal-injuries claims. It was designed as a lawyer-free zone, with legal fees not paid when an award is made. But we have a situation where 90pc of claimants to the Injuries Board are now represented by lawyers. More often than not, the lawyers engineer a situation where their client's case is taken out of the Injuries Board and pushed towards the courts.
Less than 10,000 injuries cases are decided in the Injuries Board and the courts.
Another 22,530 claims are settled by insurers privately. These out-of-court settlements are the problem.
There is a huge suspicion that insurers, faced with the high-cost prospect of fighting these claims in the courts, are settling them - even though they know many are spurious or exaggerated. Pay up to get them to go away, seems to be the mantra.
No wonder claims-harvesting has become an issue.
Insurers and lawyers have some cheek, forcing honest drivers to pay for this carry-on.
Sunday Indo Business