Saturday 24 August 2019

High injury awards here 'because Irish accidents are more severe'

Stock image
Stock image
Shane Phelan

Shane Phelan

Personal injury awards in Ireland are higher on average than in the UK not because people are being over-compensated, but because Irish accidents are more severe.

That's according to a report by a University College Cork economist, which was commissioned by the Law Society and the Bar Council.

Senior lecturer in economics Martin Kenneally argued the remedy to reduce personal injury awards in Ireland is to cut accident rates.

But in a statement, Insurance Ireland said the commissioning of the report was an attempt to undermine the work of the Personal Injuries Commission (PIC) and should be seen as "foot-dragging".

The Government is under intense pressure over the cost of insurance, and plans to accelerate legislation to allow a judicial council to recalibrate guideline award levels.

The PIC has found the level of general damages in this jurisdiction for soft-tissue injuries such as whiplash was 4.4 times higher than in the UK.

However, in Mr Kenneally's report, the economist argues the PIC's key "over-compensation" finding was incorrect.

According to his analysis, compensation rates do not differ significantly between Ireland and Britain, but injuries here tend to be more severe, leading to higher awards. He also found between 2010 and 2016 Ireland's higher accident severity tended to increase Irish motor premiums.

But he said this was "more than offset" by a lower accident frequency, resulting in Irish motor premiums which were, on average, substantially less than British premiums.

Mr Kenneally argued that cutting awards had far less potential to reduce motor premiums than reducing serious and severe road injuries.

The research was recently presented by the Law Society to Michael D'Arcy, the junior minister responsible for insurance cost reform.

Insurance Ireland urged the Government to press ahead with the proposed legislative reforms regarding the cost of claims, saying it was confident it would lead to benefits for consumers.

It said: "We know what the issues are, we know what the solutions are. We just need action on the promised legislation to bring about certainty."

However, the Bar Council of Ireland reiterated support for judicial personal injury award guidelines in a meeting with Mr D'Arcy.

And former Law Society president Stuart Gilhooly said it was not reneging on its support of the commission's findings. He said the research was commissioned from Mr Kenneally because the PIC did not examine the effect reducing damages would have on premiums.

"Unfortunately, what this report seems to suggest is that damages are not a huge factor in the determination of premiums," he said.

Irish Independent

Also in Business