Phil Hogan (Carlow-Kilkenny, Fine Gael)

It is disingenuous of the Minister to blame the Opposition for the fact that the Bill must come before the House. That is not the case. If one examines the record of the debates on the principal legislation in 2003, it is clear the Opposition parties and then Minister for Enterprise, Trade and Employment, Deputy Harney, engaged in a constructive dialogue on Committee Stage. The then Minister had the same legal adviser, an eminent former Attorney General, as the current Minister. We warned of problems ahead regarding access to solicitors and redress for the legal costs incurred by the claimant. We also argued it would not be possible under the Constitution to completely eliminate access to the legal framework for clients. The Minister rejected our argument but was proven wrong in the O'Brien case adjudicated on by Mr. Justice McMenamin.

Based on legal opinion we make the same case today. The Minister has the same legal adviser as his predecessor and a belt and braces approach has been taken under the new Attorney General. Our legal opinion is that the legislation is unconstitutional because it proposes to deny citizens access to certain legal rights.

The Personal Injuries Assessment Board could easily have availed of an option to have money lodged in court. I do not understand the reason it does not utilise this facility. Why does it not agree terms in court at an early stage and before most costs have been incurred? Only a small amount of costs are incurred in the early part of the legal process. The expensive phase begins once court proceedings commence. Money can be lodged in court early in the proceedings and efforts made to reach an agreement between the parties. This practice is not in evidence. Perhaps the Minister will make representations to the PIAB to determine whether this approach would speed up cases, reduce costs and benefit consumers.

The arguments made by the Fine Gael and Labour parties in 2003 were constructive and supportive of the establishment of Personal Injuries Assessment Board, which my party continues to support. While the Minister can twist and turn this fact, it remains indisputable. Legal opinion available to us suggests the Minister's approach to this matter is unconstitutional, although he is entitled to disagree. When the case made by the Minister in 2003 was tested she was proved wrong.

We hear a great deal about decreases in the cost of insurance premiums. In 2002 and 2003, every Minister referred to the events of 11 September 2001 which resulted in a 150% increase in the cost of insurance premiums. Reinsurance companies did not want to take business from general insurance companies but their profitability or investment income did not reduce substantially. The average increase was 150%, although it has reduced significantly from that level, which no economy could sustain. Employer's liability, public liability and motor premiums have also reduced.

As a former insurance broker, I understand how the system works. However, it is no good to suggest that the benefits of the savings made by Personal Injuries Assessment Board — €45 million was the figure suggested — have arrived in the pockets of consumers in terms of broad choice, more competition and reduced premia. The Financial Regulator's statistical review for 2005 suggested a 1.8% reduction in premia but in the same year there was a 26% increase in the profits of insurance companies to €418 million. I am not surprised the Minister sees nothing wrong in this. However, we need legislation on behalf of consumers so that where there are savings, the consumer gets a fair benefit, in the interests of competition.

We were promised by the then Minister, Deputy Mary Harney, that she was ready and willing to go to London at any time to bring in a new insurance company and generate increased competition. In fact, we were waiting with bated breath for the following couple of months to find out what new company was on the way to bring more competition. It never arrived. There are just four or five players in the general insurance market in Ireland. Were it not for Quinn Direct, the situation would be different. It made the major contribution towards generating competition in the Irish insurance market. I salute the efforts of the Quinn Group. Mr. Quinn put it up to those who had no stake in the country, and certainly no shareholding interests or investment intermediary interests. Quinn Direct was the basis of the competition that came to the market; it came not from outside the country but from within.

All the various promises and commitments regarding increased competition and more intense competition in the general insurance market arising from the 2003 legislation, including the commitments given by the then Minister, Deputy Harney, came to nothing. The reality is the Irish insurance market is very small; we are only the size of Manchester. We make a big deal about ourselves from time to time but there are only four or five companies prepared to do business in such a small market. When one company is able to make as much in the Irish market as the British market, we know it will be happy to continue with the cosy arrangement that is in place at present.

The Minister is intent on proceeding with the Bill and I understand the principle and logic behind that. However, there comes a time when he must ask whether it can be implemented. In the next couple of months, somebody will test this legislation. Just as we warned it was unconstitutional to proceed with the 2003 Bill, so we give the same warning in this regard. Bad law is not what we on this side of the House wish to support. The wording and framing of section 1 is not appropriate, nor is how it is likely to be implemented.

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