Monday 23 October 2017

Court changes will drive up cost of motor insurance, warns expert

Dorothea Dowling: fears level of litigation will increase
Dorothea Dowling: fears level of litigation will increase

Charlie Weston Personal Finance Editor

MOTOR insurance premiums are set to be driven up because of changes in the way courts are run, a leading legal reformer has warned.

Dorothea Dowling, who chairs the lawyer-free Injuries Board, said legal costs would jump in personal injury and other cases as a result of the Courts Bill 2013.

The size of awards that can be made for cases taken in the district, circuit and the high courts are to be raised, under the law.

This will make the district and circuit courts busier and lead to huge delays and greater costs for companies – and the costs will be passed on in increased motor insurance premiums, she said.

Ms Dowling headed the Motor Insurance Advisory Board, which made a large number of recommendations on reducing insurance costs.


It recommended the setting up of the Personal Injuries Assessment Board – now called the Injuries Board – so consumers could make claims without going through the courts.

This led to a huge reduction in motor, home and commercial insurance rates, experts said.

But Ms Dowling, who has chaired the Injuries Board since it was founded, fears that insurance premiums will now be forced up as a result of changes in how courts operate.

"It seems nobody in government has any responsibility for safeguarding the interests of insurance consumers," she said.

Cases with a potential award of up to €75,000 will be dealt with in the circuit court under the provisions of the bill, which Justice Minister Alan Shatter hopes to get passed into law later this year. The current limit is €38,000.

Ms Dowling, who is also head of claims at CIE, told the Irish Independent: "The latest measure will increase legal fees and risk greater levels of litigation."

She acknowledged that the jurisdiction limits for personal injuries cases in the circuit court will stay at €60,000, but said the other hikes in the value of cases that can be taken in the courts risks pushing up legal costs across the board. This would be passed on to consumers.

A spokeswoman for the Department of Justice said the monetary limits for cases taken in the district and circuit courts were last amended in 1991.

The limits were so low that the district and circuit courts were rendered "redundant in respect of some classes of civil proceedings".

There would be no change in the monetary limit for personal injuries cases in the circuit court in case this directly feeds through to higher insurance costs, the department said.

But the department admitted some of the advice it has received in expert reports stated that changes it is making could lead to higher insurance costs.

Irish Independent

Also in Business