Mr. Paul McGarry:

I thank the Acting Chairman and the members of the committee for allowing us this opportunity to come before them today. We provided a written submission, which I commend to the committee. I will start by focusing on some key points arising from that material. First, I will identify the facts as we know them. There has been no significant increase in the number of claims that have been processed through the Injuries Board in recent times. A 6% increase in 2015 might be seen as reflecting increased economic and social activity and higher traffic volumes. That mirrors the views of the Central Bank in its Bodily Injury Thematic Review in November 2015. The levels of award by the board are also consistent with a modest 1% increase in 2015. Second, the board has, in effect, succeeded in removing two thirds of personal injuries cases from unnecessary litigation.

There has been no significant increase in the number of claims going to court. The High Court saw an increase of 2% in 2015 and the Circuit Court saw an 8% increase, which was expected given the increase in the jurisdiction. This does not reflect the explosion of claims that has been alleged to have occurred by the insurance industry. In 2015, there was an increase of 8% in the total amount awarded in the High Court and a 20% increase in the total amount awarded in the Circuit Court. Again, that is not unexpected, given the jurisdictional increase in the latter court. These figures do not reflect the allegations of soaring awards.

It should also be noted that there has been a major increase in medical negligence claims over the past few years. During the period 2008 to 2013, the number of High Court medical negligence cases increased from 481 to 942, an increase of 96%, with further increases again in 2014 and 2015. This has no bearing on motor insurance whatsoever and there is no comparison with the levels in motor insurance cases.

A person who sustains genuine personal injuries is entitled to be properly compensated for those injuries and the concept of reasonableness and proportionality is inherent in the exercise undertaken by a court in assessing the appropriate level of damages in each case. Judges are independent and do not have any vested interest in the outcome of proceedings. Contrary to popular belief, barristers' fees have fallen significantly in the last few years. Published figures from the various State agencies show that professional fees fell by between 26% and 50% during the period 2006 to 2013 and these reductions are mirrored in other areas of private work. We know that the Legal Services Regulation Act introduces a new costs regime that will ensure greater clarity around the principles to be applied by costs adjudicators in assessing costs. That is a replacement for the existing taxation of costs system and we see no reason that provision should not be commenced as soon as possible. That is within the capacity of the Minister for Justice and Equality to do at any time. It is a provision of that Act which has been welcomed by all interested parties.

What to do about the insurance issues with which this committee is concerned? We agree with the cacophony of calls for greater transparency and data sharing. Data relating to settlements entered into by insurance companies is vital to provide greater clarity and to enhance our understanding of the claims environment and the factors contributing to rising motor insurance costs. In 2014, for example, 71% of cases were settled privately by insurers and there is no information or figures available at all on the particulars of any of these settlements. That is more than two thirds of all claims settled privately by insurers, with no information provided. The book of quantum which has been referred to quite a lot provides a guideline of injuries and value ranges of damages appropriate to particular injuries. It is not a recommendation for compensation levels but a reflection of the prevailing level of awards made by the courts, the Injuries Board, the State Claims Agency and the settlements entered into by insurance companies. Obviously, however, the absence of the data relating to the private settlements entered into by the insurance companies greatly hinders this process.

We also think that the business models operated by insurance companies warrant close scrutiny. There is a €1 billion discrepancy between the premium income of Irish insurers and the published awards. This must warrant some form of investigation. It has also recently been reported in the United Kingdom that insurance companies are overcharging motorists for cover despite certain measures, including the Government crackdown on the no-win, no-fee industry which has led to a significant drop in what are described as "whiplash" claims and which has helped the industry to save £500 million in the past three years. Despite this, the cost of premiums has gone up. If the overall cost to the industry of such claims has dropped, then why have motor insurance prices in the UK continued to rise? It is likely that insurance companies are trying to recover losses incurred from a period of imprudent pricing or bad management. If this is the case and policy holders are being asked to pay extra to increase solvency in the financial services markets, then that needs to explained clearly.