Donnchadh Ó Laoghaire (Cork South Central, Sinn Fein) | Oireachtas source

Sinn Féin will support the Bill on Second Stage albeit issues have been identified for examination on Committee Stage. The intention behind the Bill, which is positive, is to provide that where a court has dismissed a personal injury insurance claim on the basis that it is a fraudulent action, it will be referred automatically to the DPP. Many of us have been lobbied by businesses, community organisations, GAA clubs and so on as to the huge impact of significant insurance premiums, not only on profit-making organisations but on voluntary non-profit making organisations. It is a major issue which is causing businesses to question their viability and community organisations to raise funds which might otherwise have been applied to equipment or renovations just to keep operations on the road. The cost of insurance is a very real issue for society and where false claims are made, money is being taken indirectly or directly from the pockets of other citizens, including those making legitimate claims. Those who make false claims cause an injury to society as a whole.

As matters stands, where a personal injury claim is brought before the courts and dismissed on the basis that false or misleading evidence was given by the person taking the claim, it is rare that a prosecution for attempted insurance fraud occurs. The Bill intends to change that state of affairs and to act as a deterrent to the bringing of fraudulent claims by providing for all files to be sent to the DPP. The Minister has referred to the separation of powers and to the different burdens of proof which apply and these are reasonable. However, the legislation does not propose that this process would lead automatically to a criminal case in court. Rather, it merely contemplates the DPP receiving the file. It would be the function of the DPP thereafter to consider it. Potentially, that would require additional resources as this could be labour intensive work and that is a question of whether we are serious about tackling insurance fraud. The DPP could evaluate the merits of an individual case and state whether there was a chance of success on the basis of a burden of proof of beyond a reasonable doubt. I do not know, therefore, if the Minister's concerns are borne out in that it does not automatically follow that there would be a subsequent court case. If a second court case occurred, judges would have to take into account the nature of the evidence presented, whether there was an intention to mislead the courts in seeking or obtaining a financial settlement and whether it is proper that this happens given that we see a knock-on effect on those seeking to get insured with costs being exorbitant.

While Sinn Féin is happy to support the Bill and hopes to see it progress, it cannot be taken in isolation when it comes to the overall reform of the insurance industry. While the Bill represents a sensible step, it will not do all that much to tackle high insurance costs borne by individuals and businesses. Section 2 proposes to insert a subsection at section 26 of the Civil Liability and Courts Act 2004, which deals with fraudulent actions. To a certain extent, section 25(2) of the Act already deals with the issue and provides:

If, after the commencement of this section, a person gives, or dishonestly causes to be given, an instruction or information, in relation to a personal injuries action, to a solicitor, or person acting on behalf of a solicitor, or an expert, that—(a) is false or misleading in any material respect, and

(b) he or she knows to be false or misleading,he or she shall be guilty of an offence.

The Bill appears to create a mechanism to further advance the law as it exists to ensure it is enforced on a more frequent and firm basis.

Last month, new judicial guidelines for personal injury claims were recommended as a matter of urgency in an official report of Mr. Justice Nicholas Kearns who stated that while genuine claimants need adequate compensation, the negative impact of high premiums on businesses and consumers had to be recognised. According to the Personal Injuries Commission, compensation for whiplash claims in the State are running at 4.4 times the level in Britain. The commission found that the average soft-tissue award in Ireland is €17,338 compared with just €3,984 in Britain. Having said that, there is a balance to be struck in these matters. The Law Society has expressed the view that simply lowering damages will not automatically mean lower premiums. It could be that simply reducing damages in a blunt way could take money from deserving persons who have suffered injury through not fault of their own and put it in the pockets of what are already very profitable insurance companies. While we should proceed, it should be with due care for the interests of genuine claimants who I would like to think represent a substantial category if not the majority of claimants.

The Chief Justice, Mr. Frank Clarke, has signalled his agreement with the findings of the report and stated that an overall set of judge-made guidelines would contribute not only to consistency but to the proper calibration of the overall level of awards. He cautioned that new guidelines should not be too rigid, which is something that needs to be taken on board. The model referred to in the Bill might be useful and is not dissimilar to a model I have proposed more generally on sentencing guidelines in the Judicial Council Bill. Guidelines for judges are useful tools when utilised correctly and would be highly beneficial to all parties.

Regarding insurance more generally, my party received documentation under freedom of information a few months ago which revealed a series of missed deadlines by Insurance Ireland since early 2017 to progress the proposal to set up an insurance fraud unit, funded by the insurance industry, within An Garda Síochána. Unfortunately, this has led to a delay in the establishment of that unit. This unit has long been called for and Sinn Féin supports its establishment, which would be of use. However, Insurance Ireland has dragged its feet. This has been on the agenda since early 2017 and was recommended in the report on the cost of motor insurance of January 2017. An Garda Síochána submitted a mechanism for further co-operation with Insurance Ireland in the first quarter of 2017 and this was due to be discussed that year by Insurance Ireland. Insurance Ireland deferred discussion until September 2017 and was due to communicate with the Garda in October 2017. By December 2017, Insurance Ireland had come up with a proposal for a full cost-benefit analysis for a proposal it had initially proposed itself, subject to approval by the Garda Commissioner and the Minister for Justice and Equality.

Given that Insurance Ireland has made a point of identifying fraud as a cause of insurance premium increases, one would have thought that a cost-benefit analysis would have been relatively straightforward. It is unfortunate that we have allowed time to slip by. One has to question how serious Insurance Ireland was about the proposal in the first place. Insurance fraud is theft and should be pursued rigorously and prosecuted. However, this is not a model we should have spent time waiting on. We have serious concerns about the proposal that a section of An Garda Síochána be funded by industry. The independence of An Garda Síochána is essential but a direct funding relationship with private interests would undermine that independence.

There are, more generally, alternatives to a pure reliance on the private market. The State makes motor insurance compulsory but leaves it up to the private market to provide it. That is the deal, but the private market is not upholding its part of the deal. The State should, therefore, seriously examine alternatives. In New Zealand, for example, all drivers are covered for the basic legal requirements by paying their registration and, if they have petrol vehicles, a few cents at the pump. No young person or isolated family would face being off the road because of the whims of an industry that cannot get its story straight as to why premiums are so high and in constant flux. This is a viable alternative. Of course, there would have to be discussions with the EU, but the Central Bank in briefings has not ruled this out as contrary to EU or Irish legislation. This is the kind of thinking we need and the kind that Sinn Féin believes we must pursue.

The insurance industry is under investigation by the competition authorities not only domestically but also at EU level over anti-competitive practices, so any such Garda fraud unit should be funded by the State and at the cost of approximately €1 million. I believe this is within the capacity of Government. This has been allowed to slip off the agenda or at least has been slowed down by an abdication of the State's responsibility in allowing Insurance Ireland to string the rest of it along. If we are serious about tackling fraud, sound bites will not suffice. The lack of action in this area is unfortunate. Insurance fraud is not to be taken lightly and has wider ramifications for society as a whole. I outlined at the start of my contribution that it has serious implications not only for employers but also for voluntary organisations and community associations. It must be tackled head-on using a suite of measures. I hope all parties can commit to this on a legislative basis and in a broader policy sense. It is time for a serious discussion on where we go from here regarding the insurance sector more generally. I also hope all parties and stakeholders will come together to tackle an industry on which the softly-softly approach has not worked. We must act in the interests of people rather than the interests of the industry, and I hope this legislation falls within that approach.

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