Wednesday 22 November 2017

Adding insult over injuries: the Book of Quantum should be binned

Stock Image: Getty Images/Maskot
Stock Image: Getty Images/Maskot

Dorothea Dowling

Some people may suspect that there is no joined-up thinking in Government. What is happening with motor insurance inflation could support that view. Right in the middle of the current cost crisis, which is so serious that it is being examined by a Joint Oireachtas Committee and the Minister for Finance has set up a Working Group, the Minister for Jobs allows publication of guidelines on higher compensation for minor injuries.

Perhaps the most surprising aspect of these new compensation guidelines is that they are not consistent with the law of the land as set out by the Court of Appeal.

In a range of cases from November 2015 that newly established appellate jurisdiction, when halving amounts awarded by the High Court in 2013 and 2014, provided us with an improved and more proportionate way of assessing injury compensation. It is unbelievable that such an important legal precedent has simply been ignored.

What the Court of Appeal said is that compensation for negligently inflicted injuries should be "reasonable and proportionate in all the circumstances" and that "modest injuries should attract moderate damages".

Explained in simple terms, the new approach involves an imaginary scale. At the top is the General Damages at €400,000 for quadriplegia. That is the compensation for 100pc life-long disability. Cases below that maximum severity level would be assigned a percentage disability resulting in proportionate compensation. So for example, a 20pc disability could secure €80,000 compensation and 1pc disability, such as a minor whiplash, might equate to €4,000 compensation.

It must be stressed that this compensation, known as General Damages, is in addition to awards for financial losses such as long term future care costs which run into several millions in the maximum severity cases.

Instead of adopting that more reasonable and proportionate approach to General Damages, the new Book of Quantum is largely based on data from 51,000 claims settled by insurers during 2013 and 2014. The courts throughout the land only make 1,500 awards annually on all types of injury cases so these guidelines are essentially based on what insurers decided to pay out.

You will also note that the period of those insurer payouts was during 2013 and 2014 which was before the reductions of 50pc by the Court of Appeal in a range of cases from November 2015 onwards.

What needs to be done now is to scrap the Book of Quantum published last week. An appropriate financial allocation should be assigned for the Court of Appeal to produce judicial guidelines on compensation, as is done in the UK through their Judicial Studies Board.

Production of those guidelines may require input from medical experts, and possibly also from an economist. The project could be concluded within a month of sustained effort. The money is available from financial reserves held by PIAB. The PIAB Act 2003 at section 54(b) refers to issuing guidelines 'as to the amounts that may be awarded or assessed in respect of specified types of injury'. The plain reading of that legislation does not anticipate the amounts being overwhelmingly based on settlements by insurers.

Historically, compensation awarded in Ireland for minor and moderate injuries emerged in a haphazard and unscientific manner.

This has resulted in levels that are out of kilter with other countries, as observed by Minister Eoghan Murphy who is heading up the Government's Working Group. The Court of Appeal has now pointed to a new way forward for a more just solution from all perspectives.

Why has the Executive arm of Government chosen to ignore that helpful legal guidance?

Dorothea Dowling is a former chairwoman of the Motor Insurance Advisory Board

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