Monday 15 July 2019

Peter Boland: 'Insurance reform is about saving the fabric of our society, not denying fair compensation'

Justice: More than 70pc of personal injury claims are settled ‘on the courthouse steps’ in self-serving deals between the insurers and the lawyers
Justice: More than 70pc of personal injury claims are settled ‘on the courthouse steps’ in self-serving deals between the insurers and the lawyers

Peter Boland

'First take the plank out of your own eye, and then you will see clearly to remove the speck from your brother's eye.' Matthew 7:5

The opinion piece by Stuart Gilhooley in Wednesday's Irish Independent ('How to ensure insurance industry isn't the only winner from changes to claims culture') had all the hallmarks of a vested interest rushing to protect a gravy train under serious attack, following the 'swing-gate' case.

It was neither an effective attempt to vindicate the rights of genuine plaintiffs nor an attempt to meaningfully explore the causes of the current crisis.

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Rather it was a full-on and entirely transparent attempt to deflect attention from the current focus on personal injury claims, by heaping the blame on insurers and, in doing so, to protect at all costs the €350,000,000 in fees taken by lawyers from the personal injuries market every year.

We have no doubt that insurance companies have a case to answer in the current crisis. Equally, lawyers have fanned the flames through their shameless pursuit of ever-higher damages and associated legal costs, the undermining of the Personal Injuries Assessment Board (PIAB) and the facilitation of fraudulent and exaggerated claims by an admittedly small number of practitioners. Lawyers cannot be absolved from their responsibilities in this respect.

The 'swing-gate' case has served to bring this sharply into focus. As Deputy Maria Bailey said in her radio interview on Monday: "I took legal advice on this and I put every faith into that legal system and I was told I had a clear-cut case."

All too seldom do we get an insight into this process, given that more than 70pc of personal injury claims are settled "on the courthouse steps" in self-serving deals between the insurers and the lawyers, where everyone gets paid and the policyholder foots the bill.

In this case, substantial costs have accrued despite the fact that the case has been withdrawn. This is the everyday experience of policyholders who are left with a bill for substantial legal costs despite 'winning' personal injury cases.

Additionally, any attempt to portray this as a binary issue between the legal and the insurance industries deliberately and disrespectfully ignores the plight of policyholders - the charities, community groups, sports and arts organisations, and small businesses directly affected by spiralling insurance costs and now closing or winding down their services as a result.

The Alliance for Insurance Reform brings together 26 civic and business organisations from across Ireland, representing sectors as diverse as tourism and hospitality, festivals, charities, community groups, retail, sport, transportation, manufacturing, the arts and entertainment, leisure and healthcare.

With more than 36,000 member organisations, which between them have 639,000 employees and 43,000 volunteers, the Alliance is very well placed to vouch for the impact of persistently high premiums. Our experience over the past five years or so is that spiralling insurance premiums are working their way through Irish organisations sector-by-sector and now present an existential threat to whole sectors of Irish society.

In order to avoid serious damage to Ireland's social and economic infrastructure, we are calling for real reforms to tackle the issue urgently.

Mr Gilhooly's article attempted to portray the insurance reform narrative as an attack on the right of victims to fair compensation. This is an outrageous distortion of that narrative, which in truth argues that a mixture of fraudulent and exaggerated claims, sky-high awards for minor, fully recovered injuries, and a complete lack of transparency in the sector have conspired to deny policyholders sustainable insurance cover while in tandem, penalising genuine claimants due to the actions of the few.

Certainly, as part of this reform process, we need a robust schedule of reductions for all the reforms currently being pursued, but Mr Gilhooly's suggestion that the "Government needs to set rules which do not allow premium increases" in certain circumstances is a populist distraction in the context of competition law.

Finally, Mr Gilhooly represented the Law Society in the Personal Injuries Commission but doesn't seem fully on board with the spirit of its recommendations in terms of reducing unsustainable general damages for very minor injuries, which is the pivotal recommendation of the report.

In doing so, he chooses to ignore the serious societal harm being caused by those damages.

It is now time for the Law Society, to step up to the mark in terms of insurance reform and not seek to distort or deflect the debate any longer.

Peter Boland is director of the Alliance for Insurance Reform

Irish Independent

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