Compensation claims crisis: judges told to slash payouts
Changes would help cut insurance costs
Judges have been told to sort out the compensation claims crisis - which would help lower insurance premiums.
An unpublished report by former High Court President Nicholas Kearns warns personal injury awards in this country are a multiple of those paid in other states, and recommends judges compile new guidelines for lower awards.
The guidelines would take account of the benchmarking of international award levels, according to the report by the Government's Personal Injuries Commission (PIC), chaired by Mr Kearns. The report has yet to be presented to the Cabinet, but represents one of the most serious attempts to sort out the compensation and the associated insurance crisis in decades. Lower claims should lead to lower insurance premiums.
Mr Justice Kearns's report found payouts here are among the highest in the world. The average motor claim is almost €21,000. This compares with close to €4,000 in the UK, €1,500 in France and between €2,500 and €6,000 in Germany.
The report says fraudulent and exaggerated claims carry a low risk of detection and "an even lower risk of prosecution".
The PIC report makes hard-hitting recommendations:
Judges should get together and compile new guidelines on appropriate compensation levels. The report says there is a need for a "rebalancing and recalibration of awards" in line with lower amounts paid in other countries. Judges should take account of appeals court decisions that have lowered awards made in the circuit and high courts. Lawyers' representative bodies, the Law Society and the Bar Council, are supportive of new judicial guidelines on award levels;
No payouts should be made by insurers unless a medical report has been produced;
Moving to a "care-not-cash" system would be incompatible with European law, and inappropriate in an Irish context. Such a system would see injured people having their medical care paid for instead of getting a cash lump sum;
Anyone making a claim must promptly notify the insurer so it can be investigated, before the likes of CCTV evidence is destroyed;
The commission supports the plans for insurance companies to fund a new dedicated Garda insurance fraud unit. This is despite misgivings by Junior Finance Minister Michael D'Arcy, who is responsible for insurance reform;
Insurance companies should fund a medical study on the prevention and management of whiplash injuries. The Irish College of General Practitioners admitted this year the majority of compensated whiplash claims are "frankly spurious", while some neurosurgeons believe whiplash is a myth and written reports of it are mainly detailing non-existent injuries;
Insurers should beef up their anti-fraud capacity;
The Law Reform Commission should report on the possibility of capping injury awards, it says.
Mr Justice Kearns found that award levels here are 4.4 times those paid in England and Wales. The report states that whiplash award levels are a "stark multiple" of those in the UK. But investigation of claims is poor, and with little risk of prosecution when fraud is exposed, there is a "perfect climate for abuse of the system".
Average motor claims were €20,826 in 2017, with the pay-out amount rising by €900 a year. This excludes legal fees, which separate reports found can add 40pc to the award amount. The report looked at awards made for under €100,000.
The commission found a lack of consistency in the amounts awarded for the same injury.
The Personal Injuries Commission is based on one million claims, but the data only includes general damages.
This is money awarded to an injured person to compensate them for their pain and suffering.
Special damages - for loss of wages, medical expenses and other costs - were not looked at. Including legal costs and special damages, the costs of claims are even higher.