Ms Dorothea Dowling:

I would like to make some introductory remarks before I pass over to Ms Byron to give members a summary of the last decade of operations since we opened our doors in July 2004. I thank the joint committee for inviting us back to report on developments since we were last here in October 2008. We rely heavily on the support of the committee which has been so instrumental in securing reductions in the cost of motor and liability insurance of 40% since 2002. Members will recall that jobs were being lost because of the high cost of insurance. We face similar challenges today in job creation, albeit for a different reason.
Establishing the PIAB was one of the 67 recommendations of the Motor Insurance Advisory Board which was a pro bonogroup which worked from 1998 to 2004 on an investigation of the insurance industry. Unlike many other reports, it did a little more than gather dust on a shelf somewhere, although I am told it is a cure for insomnia. There were some fairly explosive findings, not least of which was that for every €1 paid in compensation to injured parties, another 46% was spent on litigation overheads. Not only have these professional fees been tackled in two thirds of cases which do not now need to go into the courts system but, through the injuries board model, people who are injured are receiving compensation in a matter of months - currently, seven months - as opposed to having to wait years in court. This is good for rehabilitation, as well as for the financial consequences.
This is a non-adversarial documents-only procedure which focuses on medical assessments; it does not deal with legal disputes. Almost 250,000 claims have been handled to date. It is likely, therefore, that all members' constituents have either benefited from this approach as policy holders in paying reduced premiums or as injured parties in securing quicker compensation, either by direct early settlement within the first 90 days or through a formal award. Maintaining this major saving in the cost of insurance is vital now more than ever for household budgets which are, as members know, under strain and also for struggling small businesses which are so important to the recovery of the economy, in particular the SME sector. Unfortunately, it seems there is no Minister responsible for ensuring the cost of insurance is equitable for consumers and businesses; therefore, the role of the joint committee is vitally important.
Members know that the establishment of the insurance reform programme arose from a previous economic challenge. As a result of the escalating cost of motor and liability insurance, in 1998 the Motor Insurance Advisory Board inquiry was established. Premium rates had increased by 48% since 1991 when court jurisdictions were last increased, largely because the promised reductions in legal costs were had not been delivered, and it had resulted in long delays in trials coming up in the lower courts. It remains to be seen whether legal costs for litigation cases decreased after the recent increases in limits which commenced on 3 February 2014. I find myself in the unusual position of being in agreement with the Law Society of Ireland that there are reservations about whether this will cause very long delays in the Circuit and District Courts in personal injury cases. These are the cases that would rightfully be in the courts, not the assessment-only cases which are dealt with by the PIAB.
The PIAB has faced repeated challenges by certain small sections of the legal profession. The first judicial review was launched within weeks of opening our doors in 2004. A decision in the case of O'Brien and the Law Society v. the PIAB was ultimately delivered in December 2008, a couple of months after we last appeared at the committee. Members may be interested to know that when the case was over, we were presented with the plaintiff's legal bill for €2 million. Of course, we challenged it and the figure of €2 million was reduced by the High Court Taxing Master to €393,000 in June 2010 - an 80% cut - but he commented that there needed to be some deterrent to the submission of excessive legal bills. I suggest this is a role for the pending legal services regulatory authority.
In the context of questionable injury claims, there are strong deterrents in the Civil Liability and Courts Act 2004 to overstating one's case, with potential fines of €100,000 and jail terms of up to five years.

If a respondent has any reservations about the genuineness of a claim, he or she can take it to court rather than to consent to it being assessed through our non-adversarial process. It could be said full revision of the non-adversarial process could only be fully exploited since October 2010 when Mr. Justice Sean Ryan dismissed the test cases challenging our refusal to award legal costs under section 44. Despite all these hurdles, the PIAB through the executive management team, many of whom are present, has fully delivered on its statutory remit. We have also achieved a self-imposed, self-funding model.

Additionally, entirely on our own initiative, we repaid the €6.9 million set-up costs for which a cheque was delivered to the Minister's office in December 2011. This financial outcome is in stark contrast to the projections by various notable experts engaged by both the Law Society and the Bar Council in their resistance to the reforms in 2002 but I am pleased that 99% of the profession has embraced the new reality and is working effectively with the board.

The consumer perspective is more important than that of the lawyers. The AA conducted a survey recently and indeed gave evidence to the Joint Committee on Transport and Communications last September that ten years previously the average motor insurance premium in Ireland was twice that of the UK whereas now it is half that of the UK. The CSO has confirmed a 40% reduction in costs, which Ms Byron will address. All this was achieved through the MIAB implementation plan and a Cabinet sub-committee involving this committee and it is a good example of joined-up thinking which I suggest could be used in other areas rather than people operating in silos.

I refer to the long-term future. Because of the increasing internal efficiencies generated by Ms Byron and her executive team over the past decade and the successful defences of the judicial reviews, the board has financial reserves in excess of €10 million, which members will have seen in our published accounts. Those funds were raised in accordance with our legislation solely for the purposes of assessing personal injury claims. This presents the Government with an ideal opportunity to establish at zero set-up cost an alternative to the courts for medical negligence clams, as was originally intended and as was envisaged in the most recent Fine Gael manifesto. This would not only achieve substantial savings for the Exchequer but also relieve the stress of adversarial litigation from injured parties in those cases which should be regarded as assessment only, which was recently commented on by the High Court. This reform is not about the PIAB taking over the role of the State Claims Agency whose position is that of an insurer to any respondent who needs to investigate liability but about extending the option for suitable cases to be resolved quickly without adversarial litigation and costs. In this context, medical negligence includes slips, trips and falls on hospital premises and not just complex medical procedures.

Important people said this could not be done and it would not be done but here we are and we have delivered. We thank the committee for its support.