Saturday 19 October 2019

Insurers are challenged as award sums slump

Concerns: Justice Minister Charlie Flanagan. Photo: Mark Condren
Concerns: Justice Minister Charlie Flanagan. Photo: Mark Condren
Shane Phelan

Shane Phelan

Justice Minister Charlie Flanagan has challenged the insurance industry to justify "extraordinary" increases in insurance premiums.

The minister's comments came as figures published in the Courts Service annual report for 2018 revealed a major drop in the level of personal injury awards.

The overall sum awarded by the High Court in non-medical negligence personal injury cases fell from €84.3m to €57.5m, a drop of 31pc between 2017 and 2018.

An analysis of data in the report indicates the average High Court non-medical negligence personal injury award fell by almost 29pc, down from €240,963 to €171,201.

In contrast, award levels rose in the Circuit Court and District Court in the same period.

The amount awarded in the Circuit Court jumped from €19.8m to €23.5m between 2017 and 2018, with the average sum awarded rising by 2.8pc from €18,488 to €19,014.

The overall sum awarded in the District Court jumped from €3.49m in 2017 to €4.5m last year, with the average sum awarded increasing by 4.5pc from €7,643 to €7,987.

But when data from the three courts is combined, it shows that the overall level of awards has tumbled.

The data will fuel further scrutiny of the insurance industry, which says the cost of claims is a driving factor in setting premiums.

Speaking after the report's launch, Mr Flanagan said the insurance industry must do more to justify "what has been an extraordinary increase in premiums that I don't accept is down to awards".

Responding to the report, Insurance Ireland pointed to the increased award levels in the lower courts, saying these were the courts which handled the majority of litigated personal injury awards.

Insurance Ireland CEO Kevin Thompson also said that when viewed between 2015 and 2018, average awards increased in the Circuit Court and District Court by 15.7pc and 13.5pc respectively.

Mr Thompson said the "continued inflation" of awards by these courts highlighted the need for a Judicial Council to recalibrate award levels.

The figures in the report bear out the analysis of former High Court president Mr Justice Nicholas Kearns, who said earlier this year that while the Court of Appeal had recalibrated awards at the upper end, this downward reach effectively stopped in the High Court and was not being seen in the courts below it.

Mr Justice Kearns chaired the Personal Injuries Commission, which recommended the setting up of the Judicial Council to recalibrate award levels.

Mr Flanagan said he was hopeful legislation allowing for the setting up of the council would be passed by the Oireachtas this week. The minister said it was "absolutely essential" to have consistency in the level of awards and that he believed a council framework would ensure this.

The report also revealed a 7.5pc decrease in the amount awarded by the High Court for medical negligence claims last year, down from €98.8m to €91.4m.

The average medical negligence award fell by almost half between 2017 and 2018, dropping from €1.97m to just over €1m. However, it is unclear what the drop in average award levels means.

Speaking at the launch of the report, Chief Justice Frank Clarke said it was necessary to treat those figures with caution as a relatively small number of cases can have a significant effect on the overall figures.

Irish Independent

Also in Business