Micheál Martin (Cork South Central, Fianna Fail)

I move: "That the Bill be now read a Second Time."

The issue before us, which requires the Personal Injuries Assessment Board Act 2003 to be amended, centres on the activity following the PIAB making a formal award. While PIAB awards mirror court awards, as both have regard to a book of quantum to determine the appropriate award to be given, some claimants choose to reject the award and commence litigation proceedings in the hope of receiving greater compensation. It is their right to choose this course of action and this Bill in no way interferes with that right. However, as these proceedings advance, some claimants are accepting the same amount as the PIAB award but are also recovering legal costs and additional costs of up to €1,500 to cover the cost of engaging a solicitor to assist with the original PIAB claim. The proceedings were therefore unnecessary for the claimant to receive the same level of award.

This development completely undermines the rationale and the positive impact of the Personal Injuries Assessment Board. By any standards, a charge of €1,500 to assist in filling a form is exorbitant, uncompetitive and unsustainable. The PIAB offers an independent and impartial monetary assessment of damages based on medical evidence, in a non-adversarial document based system and without the need for an oral hearing. Claimants can be assured that the amount of damages reflects what is awarded in the courts. It is a matter for each claimant to either accept or reject this fair and impartial assessment. If they decide to reject this assessment and enter the litigation route, they need to be aware there are risks regarding legal costs. There is no intention in this amendment to the Personal Injuries Assessment Board Act 2003 to interfere with claimants' rights of access to the courts. However, the Bill is entirely consistent with the objectives of the principal Act to prohibit, in the interests of the common good, the bringing of unnecessary legal proceedings. The Personal Injuries Assessment Board Act 2003 and this Bill are definitively pro-consumer, in as much as they highlight the cost risks in taking legal proceedings and contribute to lower insurance costs.

If the situation is allowed to continue, the consequences will be far-reaching. The cost burden will fall on the consumer and business. We must not forget that it is only a few years since businesses were being squeezed out of existence because of the spiralling costs of insurance. This was an unhappy situation and the establishment of the Personal Injuries Assessment Board has done a great deal to address it. The Joint Committee on Enterprise and Small Business made the following recommendation in its third interim report on reforms to the insurance market: "Where, not having accepted a PIAB award, the court award is equal to or less than a PIAB award, legal costs should not be allowed to the claimant." The Bill implements this recommendation.

The purpose of the Personal Injuries Assessment Board (Amendment) Bill 2007 is to provide that in certain circumstances, where a claimant rejects a PIAB assessment that has been accepted by a respondent and where he or she fails in any subsequent proceedings to get more than the amount of the PIAB assessment, he or she will not be entitled to legal costs. Section 1 of the Bill provides that two new sections are added to the Personal Injuries Assessment Board Act 2003 as follows. A new section 51A provides that where a claimant rejects a PIAB assessment that has been accepted by a respondent and where the claimant fails in any subsequent proceedings to get more than the amount of the PIAB assessment, he or she will not be entitled to legal costs. A new section 51B provides that no legal costs shall be allowed for the making of an application to the PIAB. Section 2 of the Bill provides for the citation of the new Act.

The PIAB was established in April 2004 as part of the Government's insurance reform programme, with the aim of allowing certain classes of personal injury claim, where liability is uncontested, to be settled without the need for the costs associated with litigation. The threat of rising insurance costs at the time posed serious risks to Irish business and the economy generally. Under the Personal Injuries Assessment Board Act 2003, claimants are obliged to submit claims to the PIAB. They may submit their claims directly or they may employ a solicitor at their own cost, which is something similar to the Employment Appeals Tribunal.

Since its establishment, the PIAB has successfully fulfilled its legal obligations and is now assessing claims three times faster and four times cheaper than under the old litigation system. By the end of May 2007, the PIAB had made actual savings of more than €45 million on awards totalling €115 million, when compared with the old, unwieldy, adversarial and litigation-based system. This is quite an achievement in such a short space of time and can only be good news for accident victims, business and consumers generally, who have seen big reductions in insurance premiums.

In addition to the provision of these savings, the PIAB has succeeded in establishing a new non-adversarial culture of settling claims. It has put paid to the long wait for compensation and the adversarial approach to the process that previously led to huge uncertainty and stress for claimants. Within a few years the old system has been replaced by a speedy, low cost, user-friendly system. In 2005, personal injury cases going through the courts system dropped from over 35,000 cases in 2004 to less than 5,000. The effects are felt throughout the court system where valuable time has been freed up to deal with cases that should more properly reside there.

The PIAB is a new body that has significantly changed the environment for making personal injuries claims, and is the subject of regular challenge. I am aware of these challenges, and the Government will take whatever steps are necessary to ensure the board is not undermined in its ongoing work.

It is projected by the Personal Injuries Assessment Board that an absence of corrective legislation has the potential to lead to the rejection of almost all PIAB assessments which will subsequently proceed to litigation for the sole purpose of securing costs. The Bill addresses the issues I have described to ensure the stated Government policy of streamlining the settlement of personal injury claims is not permitted to be circumvented in the manner currently evidenced.

I emphasise to the House that this Bill will in no way limit claimants' range of choices or access to the courts. The current amendment is a short technical proposal designed to address a significant risk to the intent of the Act. With this in mind the co-operation of Deputies in assisting the smooth passage of the Bill through this House would be greatly appreciated.

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