Tuesday 25 June 2019

Charlie Weston: 'Too many snouts in the trough for reform agenda to have any chance'

 

'A minority of lawyers are happily travelling on the compo culture gravy train, and have no intention conceding on any measures that restrict the easy money they make on claims.' Stock photo: PA
'A minority of lawyers are happily travelling on the compo culture gravy train, and have no intention conceding on any measures that restrict the easy money they make on claims.' Stock photo: PA
Charlie Weston

Charlie Weston

The public has had enough. The insurance crisis is closing businesses, causing job losses, stretching household budgets and risking the reputation of this country as a place to do business.

Fraudulent and exaggerated personal injuries claims are at the root of much of the problem. And too many snouts are in the trough to want to do anything about this.

Insurers are back making healthy profits, on the backs of an effective bailout from policyholders. This means they are not interested in any reforms that involve them doing things differently.

And the Government has shown an extreme reluctance to do anything about the mess.

A minority of lawyers are happily travelling on the compo culture gravy train, and have no intention of conceding on any measures that restrict the easy money they make on claims.

Every day this publication carries reports about chancers attempting to use the courts as an ATM machine to fund their lifestyles. Just this week, the Circuit Civil Court heard a claimant "told the court a pack of lies". He withdrew the case and walked away. No costs were awarded against him. There is unlikely to be a prosecution.

His lawyers will not be questioned by their regulatory body about why they took the case, and why they did not validate his claims for what turned out to be an attempt at extortion.

We, the purchasers of insurance products, some of which are mandatory, end up paying for this. Where is justice in the current system for policyholders?

But it is not just false claims.

The extreme generosity of some judges in genuine personal injuries cases is also a major factor in our insurance crisis.

Earlier this month, a boy who injured his arm climbing out of a construction site after retrieving a tennis ball settled his High Court action for €80,000. He had climbed over a fence into a building site, and suffered a cut to his arm.

With so much "compo" money at stake, is it any wonder insurers would rather pay "go-away money" than fight cases they suspect are either false or massively flamed up? And the excessively generous compensation paid here for minor injuries is the main reason why insurers based in Britain that were prepared to cover the likes of the leisure and play centre industry are running scared.

The pity of all this is that we know what we have to do to solve the problem.

Two reforms would go a long way to sorting out the crisis. One is capping award levels for minor injuries, whether that is through guidelines put together by judges, or by legislation. The other is a dedicated Garda insurance fraud unit.

Insurers should be forced to commit to reducing premiums if these reforms are instituted. Then the gravy train might finally hit the buffers.

Irish Independent

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