Dáil debates

Thursday, 20 September 2018

Central Bank (National Claims Information Database) Bill 2018: Second Stage


3:35 pm

Photo of Michael D'ArcyMichael D'Arcy (Wexford, Fine Gael) | Oireachtas source

On the closure of offices as raised by Deputy Michael Collins, the Department of Finance has no role in the internal decisions of commercial entities. The closure of the Axa office in west Cork is unfortunate but I am certain there are brokers in towns and villages throughout west Cork who act as very capable intermediaries between customers and insurance companies. Although Axa may choose not to sell its products directly to the public, brokers act as intermediaries and do a very fine job around the country.

On the issues highlighted by Deputy Tóibín, I accept we are late in tackling this issue but we will be ready to start in quarter 1 of 2019. On the role of the Central Bank of Ireland, consumer protection will not be affected by the collection of data and compilation of information. Members have queried whether the Central Bank is the correct body to compile such information. This is a compilation exercise. It is not a question of objectivity or selecting information. The Central Bank will compile the numbers and information and pass it on. Deputy Tóibín was unaware that the cost benefit analysis was concluded by Insurance Ireland. It has been agreed with Insurance Ireland that €1 million will be made available for the establishment of an insurance fraud section within the Garda National Economic Crime Bureau. I have a concern regarding how that will be funded. I do not often agree with Sinn Féin but our positions are aligned on that issue.

Tackling fraud in insurance in Ireland is crucial. Everybody wants to discuss staged fraud, which involves a person setting up an accident and putting in a claim. That is a big issue but a far greater one is the exaggeration of claims, which involves people who have been injured in a genuine accident of some sort seeking excessive damages. The number of whiplash claims in this country is a significant issue. Some 80% of claims relate to soft tissue injuries or whiplash. The Personal Injuries Commission report launched this week states that the rate of whiplash claims in Ireland is 4.4 times higher than in the United Kingdom. That is causing significant difficulty. Those who are injured should be appropriately compensated but the level of claims in Ireland is out of kilter with those almost everywhere else.

I have been critical of Deputy Mattie McGrath but I acknowledge that Deputy Tommy Broughan has had a long-standing interest in the area of insurance and the level of road deaths. Between 150 and 200 people have been killed on our roads each year for the past five years. Up to 200 families annually have been badly affected by people's driving behaviour and, in particular, the drink-driving habit of many Irish motorists. A huge percentage of road traffic fatalities involve a driver who had been drinking. That is unacceptable. It severely damages families, parents and children every year. So far this year, 110 people been killed on our roads. Those figures are far too high.

The criticism made by Deputy Broughan in terms of this process having been concluded by now is fair. However, if there are high awards in a jurisdiction, there will be high premiums. There is no way around that. The vast majority of a premium goes towards payment of awards.

Much criticism has been made of the insurance industry. Some of that criticism is fair and valid. The industry has not done itself many favours. It has been quite secretive and difficult to deal with.

On the New Zealand model, European law is European law. In this jurisdiction, the Constitution gives people the right of access to the courts.

Deputy Broughan raised the issue of the book of quantum, which is a look-back on awards over the past three years rather than an objective view of what the award should be for a particular injury. The second and final report of the Personal Injuries Commission under Mr. Justice Kearns is very clear. The Judicial Council Bill 2017 brought forward by my colleague, the Minister for Justice and Equality, Deputy Flanagan, will be hugely helpful in this regard. Mr. Justice Kearns, a former president of the High Court, believes that there needs to be a recalibration of the book of quantum by the Irish judicial council. The level of awards in Ireland is among the highest in the world. It is unclear whether awards are higher here or in the United States. The level of awards must be recalibrated. We have reached this stage because of the level of awards by the Judiciary over many years. How have we reached this point? Nobody said stop. A start was made on tackling the issue by the former Minister for Finance, Deputy Michael Noonan. The former Minister of State at the Department of Finance and current Minister for Housing, Planning and Local Government, Deputy Eoghan Murphy, then instigated the cost of insurance working group, which commenced its work in 2016 and concluded its first report in January 2017. This is part of the process of recognising that awards are too high and there is too much insurance fraud and criminal levels of exaggeration and that that must cease.

Sinn Féin Members have proposed a separate offence of insurance fraud. The Civil Liability and Courts Act 2004 provides for a maximum penalty of a €100,000 fine and-or ten years imprisonment for those found guilty of insurance fraud. Additional sanctions are not required as sufficiently strong deterrents are provided for. As referenced by Deputy Curran, we must ensure that the Garda investigate any matter involving the judge in a civil insurance claim having suspicion of exaggeration of claim. We must ensure that the correct and appropriate pathway is in place to facilitate that. Such matter would then be sent to the DPP for possible prosecution in the criminal courts. That matter has been addressed and more is being done in that regard. We are satisfied that pathway is now in place and that the sanction is sufficient. We do not believe additional sanction is required.

Criticism was levelled in terms of the process being too slow. I accept that as a fair and valid criticism but none of this is easy or quick. I thank the Members of the Oireachtas who facilitated the passage of the Insurance (Amendment) Act. I hope we can facilitate the passage of this Bill through the Houses as quickly as possible. We have also brought forward the Personal Injuries Assessment Board (Amendment) Bill and the Judicial Council Bill. We intend to move amendments on Committee Stage of this Bill which will alter sections 4 and 18 of the Civil Liability and Courts Act which we will have to alter. We will be addressing the matters highlighted by Mr. Justice Nicholas Kearns in the second and final report of the Personal Injuries Commission. We have the driver licence master plan legislation. We are now at the heavy lifting stage. I will be very thankful to Members who facilitate the adoption of these measures. The Ceann Comhairle was present for the passage of the Insurance (Amendment) Act.

That was facilitated by all Members of the House and if this measure can be facilitated with the same level of co-operation, I will be very grateful. We will for certain have this legislation passed by both Houses and be able to start this process on 1 January 2019.


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