Mr. Peter Boland:

The logic is that insurance premiums are calculated on the basis of future risk. From 24 April, the future risk applicable to every policy in the country was reduced because the judicial guidelines were implemented. The first port of call for the majority of claims is PIAB. Where PIAB has managed to settle claims, it has usually settled using the new guidelines. That further reinforces the argument that all premiums, whether motor or liability, should have been coming down from 24 April. A couple of caveats must be applied. The vast majority of claims are not assessed by PIAB; they go on to litigation. The vast majority of claims are not settled by the courts either, but in the grey area in between, where private deals are done between insurers and the plaintiff's solicitors. They account for over 80% of all settlements, by value, in the country every year. Those are the key matters.

Ms Sheridan outlined a powerful example of what we as policyholders have found over the years, where it came as something of a surprise to her. It is that insurers will settle as a financial expedient and cost it as part of the policy. If it looks as if it will cost them to pursue a claim that is fraudulent, exaggerated, or just a try-on, then they will typically not do so. They will settle it, close the file and move on, and the policyholder pays. It is essential, if these guidelines are going to have any credibility, that the insurers hold firm on them. We are hoping, in the report that the Department of Justice is scheduled to publish this month, which summarises the early impact of the guidelines, that there will be data from the insurance industry. That is where the action is right now; it is not at PIAB, regrettably, because that is where the action should be.

The second caveat that has to be applied to the judicial guidelines is the lawyers queueing up to challenge the guidelines, the Judicial Council, and PIAB. We are only at the case management element of that. The Government, Judicial Council and the courts need to do everything in their power to speed up that process, select the test cases and get them heard as a matter of urgency. We are seeing a long queue developing of cases where the settlement has already been offered by PIAB. We know from Central Bank data that that is typically as much as the plaintiff is going to get. Lawyers are determined to take them into litigation because it is only when it gets to litigation that they are paid big money. That is precisely why they are holding all these up now and waiting for the courts to see what happens with the guidelines. It is a matter of extreme urgency. Our understanding is that the next mention of these cases in the High Court is on 19 January. Every month that goes by heaps additional pressure on policyholders. The likelihood is that we will not get any proper relief from these guidelines until they are bedded down and the challenges are dealt with.