Ms Sara Moorhead:

One of the issues the Senator must remember is that the Minister talks about very large awards and to a large extent they are not motor insurance awards. They are generally catastrophic injury awards, such as birth defects. There has been a substantial increase in the number of medical negligence cases, which has doubled since 2009, and in the value of the awards relating to them. One of the reasons for this, and it is a matter for politicians rather than lawyers, is that the real rate of return on investments has been adjudicated by the High Court and the Court of Appeal to be only 1%. This means that if a person is buying in care for a catastrophically injured individual the value has gone up hugely. The answer to that, which has been advocated by all representative bodies, is to bring in periodic payments. That means paying on an annual basis only what it is required to pay. If the plaintiff dies ten years later that is the end of the settlement but if the plaintiff lasts to 90 years of age that continues. That is included in the assessment of the overall matter by the Minister for Finance.

In our submission, however, we make clear that there is no evidence of significant increases by the Injuries Board or by the Central Bank because when it did its thematic review it also made the point that the only increases it expected to see were in the order of 8%, based on the improvement in the economy rather than any massive escalation in awards or legal costs. Premiums have gone up 38% in a year and 70% in the past three years. There is no evidence of a statistical increase of that magnitude in awards, claims or costs. This is not coming from us. It is not insurance bashing. This is coming from the Central Bank, from the briefing document to the Minister for Transport, Tourism and Sport and from the Injuries Board, all lawyer-free zones.