Tuesday 20 August 2019

'Urgent need' to combat Ireland's insurance crisis

Minor injuries get 'out-of-kilter' payouts as premiums soar

Peter Boland, director of the Alliance for Insurance Reform. Photo: Don Moloney
Peter Boland, director of the Alliance for Insurance Reform. Photo: Don Moloney

Alan O'Keeffe

A bruised thumb sustained in a fall at work which heals completely within days can still result in an average insurance payout of €17,000 in Ireland.

A typical big payment could be made for such a minor soft tissue injury and it would not involve any broken bones or ligament damage, said Peter Boland, director of the Alliance for Insurance Reform.

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But the same soft tissue injury in Germany results in a maximum payout of €1,125 and Sweden does not allow any compensation payments for such minor injuries, he told the Sunday Independent.

Ireland's 'compo culture', which has resulted in a crisis of higher insurance premiums, is causing worsening problems for struggling businesses and is curtailing all kinds of community, charitable and sporting activities, he warned.

"Irish payments are completely out of kilter with the rest of the world. Action to combat the insurance crisis must be given more urgency by the Government," he said.

The alliance represents a broad spectrum of Irish society, consisting of charitable bodies and community groups, small and medium businesses, pubs, restaurants, hotels, nursing homes and the motor industry.

It has recently been joined by Sport Ireland and the Federation of Irish Sport.

He claimed insurers and the legal profession were entirely focused on making money in the current crisis.

Mr Boland said: "The key thing is that the vast majority of cases never get to court but the solicitors will get paid, the barristers will get paid, the claimant gets paid, the insurance company passes the costs on in increased premiums so they make a profit and the policy-holder picks up the tab for the whole thing."

The Judicial Council Bill, passed by the Oireachtas in recent days, awaits signing by President Michael D Higgins.

Judges who are members of the judicial council are expected to develop new personal injury damages guidelines.

A committee of judges will be given six months to put together a new set of guidelines.

He said the Government has taken the position that it cannot tell the committee what new levels of payments should be introduced because of the separation of powers between the Government and the judiciary.

It is hoped guiding principles established in the higher courts regarding payouts for injuries will be honoured for "the common good," he said.

Mr Boland said that a series of reports produced by the Personal Injuries Commission last year showed how out-of-step Ireland's compensation payments had become.

Soft tissue injury awards are more than four times higher than in Britain, he said.

"Our biggest concern is the lack of speed in getting reform," he said.

The Alliance is seeking:

An urgent and sustainable reduction in general damages for minor injuries where there is a full recovery;

A fully funded garda response to insurance fraud;

Detailed commitments from the insurance industry on the kind of reductions that can be expected from the reforms.

Sunday Independent

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