Saturday 22 October 2016

Claims culture has taken hold and we will all pay for it

Published 01/09/2015 | 02:30

'Claims culture is taking hold again'
'Claims culture is taking hold again'

A claims culture is taking hold again, a decade after the Injuries Board was set up to tackle it.

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It might surprise some people but insurers bear much of the blame for surging premiums due to their under-pricing of policies and failing to put sufficient reserves in place.

But so does a renewed bout of claims-hungry citizens, their fee-chasing lawyers and munificent judges.

For each award that is paid out around half again will have to be coughed up for legal costs - which is made up of lawyer fees, medical reports and other costs associated with taking a claims case.

Judges in the District, Circuit, High and Appeals courts are generous. And they are getting even more so. But it is easy to be generous when it is someone else's money you are handing out.

It is drivers and the rest of the insured public who end up paying for the benevolence of the gowned ones on the bench.

What is needed is a greater sense of the common good from the judiciary.

When they make a higher award it feeds into higher insurance premiums.

This is because higher judgments, and their associated elevated legal costs, create a new precedent and insurers then have to put aside more reserves to meet future awards.

That is one of the key reasons motor premiums have rocketed.

Making higher awards feeds a corrosive compensation culture.

And judges seem remarkably incapable of spotting a fraudulent or exaggerated claim.

Evidence is presented every day that compensation claimants are capable of working, notwithstanding their claims that they have been rendered incapable due to a traffic accident or works injury.

Claimants regularly fail to disclose injuries which occurred before the incident that gave rise to the claim, or previous road traffic accidents.

Yet despite this evidence emerging in courts, judges still make mega awards to theses claimants.

All of this is undermining the Injuries Board which was set up to take on expensive lawyers and compensation-lavishing judges.

The Injuries Board can be bypassed by a claimant, and their no-foal, no fee lawyer. Just reject its award and take it to court.

The chances are the judge will be sympathetic.

What judges are failing to take notice of is the burden of responsibility that goes with the power to make awards.

They need to ask themselves who exactly ends up paying the bill.

Irish Independent

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