Ms Moyagh Murdock:

One of the first problems is there is little prospect of recovering those legal costs in the cases that fail at court and that are clearly identified as fraudulent and are thrown out. The experience is that insurers never recover that money. Therefore, there is no deterrent there and many of these solicitors operate on a no foal, no fee basis. The Central Bank’s report indicates the legal costs are 40% of the total cost of a claim before it arrives in court and for those settled at court, the legal costs are 104% of the award size. It is good economics to do an assessment and calculate that in fighting a case all the way to court the insurer would lose or else if it wins, it will not recover its legal costs in any event. It is a balance. The insurers are committed to adhering to the new guidelines and have been doing so since their introduction last year. It is something we have listened to and there is a commitment to fight these cases. The new centralised Garda national fraud unit has been set up. Insurers have their special investigations units. They are fighting fraud on all fronts and that is delivering results. We see news headlines where cases have been prosecuted successfully in court, involving not only complainants but solicitors and medical professionals. That will continue but it is a very costly process to go all the way to court. The overall interest is to settle cases that are genuine as expediently as possible and to try to identify those that are not and present the Garda with the relevant information that it can follow through with a prosecution.