Why we need to remember the other side of compo culture
The excellent final report of the Personal Injuries Commission, published recently, details some radical proposals.
Compensation is to be recalibrated downwards for minor and moderate injuries.
That lower level includes claims for inconsequential physical discomfort pursued by opportunists.
Some people see a crash as a happy accident to solve financial woes, or to go on a skite at someone else's expense.
Obviously, pursuing false or exaggerated cases should not be the risk-free crime it is currently, but a fact not focused on in the media is that, relative to population, Ireland has half the frequency of overall injury claim volumes experienced in the UK.
This should be factored in when reacting to data indicating the average value of our 'whiplash' is four times higher.
However, there are also challenges at the other end of the injury spectrum.
Imagine yourself after a serious accident. You end up completely paralysed. This was entirely caused by another's negligence. You require 24 hour care for seven days a week. Personal dignity may be gone. Privacy is a thing of the past. It is not your own motor insurer that will be looking after you now.
Financial compensation from the culpable party (or their insurer) will take three years of litigation on average, or seven months through the PIAB, if liability is not contested.
So-called success delivers a one-off lump sum. That consists of two elements. The first is General Damages. That will be a maximum of around €400,000 for pain and suffering. The second is Special Damages for financial losses. This may run to millions of Euro to replace lost earnings, or household services, and to pay for 24/7 care for the projected remainder of life.
Now, another worry. How long will you live? If you survive longer than estimated, you may run out of cash to pay carers. If so, you are on your own. There is currently no second go at compensation. In contrast, some seriously injured parties make a better recovery than predicted. These claimants are essentially over-compensated. Their excess money does not go to the under-compensated whose care needs are greater than were anticipated.
The desirability of annual assessment of the actual needs was recognised by the UK in 1996, when periodic payments were introduced for catastrophic injuries.
In 2017, Ireland passed similar legislation, but only some sections of that Civil Liability (Amendment) Act come into effect this October.
One wonders at the reason for the delay.
Most of the cost of catastrophic injury falls on the State. Of the 400 High Court awards in 2017, only 13pc related to medical negligence, but those accounted for over 50pc of the total awards at €183m. Those outlays do not fall on motor insurers. Their lobby tries to use trends in such tragedies to justify increasing motor premium, on which the annual income is over €2bn.
Lawyer lobbyists also invoke the 'hard cases'. Their script is not supported by the numbers either. Over 75pc of the 34,000 overall injury claims annually do not involve any loss of earnings. It is reasonable to suggest that most of those claimants were not significantly disabled.
Two questions arise about reducing claims costs for minor and moderate whiplash.
Why limit this to motor accidents? There are soft tissue injuries alleged after slip, trips and falls too. Constitutional protection of bodily integrity can hardly discriminate by type of accident.
Second, has the payback been quantified? In 2002 when the MIAB made 67 reform recommendations (only half of which were implemented, as we are now learning to our cost) there was an undertaking from insurers of a 36pc saving. The actual reduction in premium charges was 40pc over the following decade.
Where is that written commitment on price from insurers now? And will the Central Bank police the delivery of savings to motorists?