Tommy Broughan (Dublin Bay North, Independent) | Oireachtas source

I am delighted to be able to speak briefly to the Personal Injuries Assessment Board (Amendment) (No. 2) Bill 2018. It is an important Bill. Personal injury claims and insurance costs are matters that are brought up by constituents virtually every week.

Recent reports show, as many Deputies have said, that the average award for whiplash is €20,000 and that such cases account for the vast majority of claims through the Personal Injuries Assessment Board. The 71% in the first half of 2018 was 71%. It was the Personal Injuries Commission, under Mr. Justice Nicholas Kearns, that originally informed us that compensation awards for soft-tissue damage were four and a half times the level in the United Kingdom. That is an extraordinary difference, given the close connections between the two economies, about which we are also worried in the context of Brexit. It also highlights the urgent need for a review of the book of quantum. It is extraordinary that in 2003 we did not make provision in legislation for regular reviews. The average compensation award in Ireland for soft tissue damage is now over €17,000, compared to just €3,984 in the United Kingdom based on the figures for the period between 2015 and 2017. That is a considerable difference and extraordinary. govem that the two societies are similar.

The Bill has been a long time coming and follows the cost of insurance working group's report on the cost of motor insurance in January 2017. It seemed, following Deputy Michael McGrath's Bill last summer, that the Government finally had to take action.

The working group was established following the skyrocketing motor insurance premiums that had caused consternation and outrage among the people who send us to this House. Many of us would have preferred a more radical solution. In particular and notwithstanding the comments of Deputy Penrose, we might look at the position in New Zealand which was in first place in the world in regard to the ease of doing business and also had the accident compensation scheme which essentially abolished the notion of fault-based liability for accidental injury that still applies in the PIAB and the court system in Ireland today.

The Bill amends the Personal Injuries Assessment Board Acts 2003 and 2007 and strengthens the remit of the PIAB. The working group recommended in recommendation No. 15 of the PIAB legislation review that “cases of non-cooperation such as non-attendance at medicals and refusal to provide details of special damages” be assessed. It also recommended in recommendation No. 19 that the “frequency of future Book of Quantum updates in terms of any future changes to its production” be examined. There was also a public consultation process on all of the matters before us.

The Bill, rightly, strengthens the provisions to attend medicals by effectively making the process mandatory. Recommendation No. 15 of the working group's report is addressed by section 2, whereby the 2003 Act is amended in order that a fee and medical report must be received by the PIAB before a formal notification is issued. A preliminary notification may be sent in cases where the fee or medical report has not been sent to the PIAB. Issues surrounding lack of clarity and the Statute of Limitations will be addressed by section 7.

The key section is section 8 which provides for an amendment to section 51 of the principal Act by the insertion of a new section 51C to deal with cases of non-compliance with a request by the board under section 23 or 24 of the principal Act. Where a claimant fails to supply details of his or her claim for special damages, fails to attend a medical examination arranged by the PIAB or fails to co-operate with retained experts, the board must carry out the assessment. If the claimant rejects this assessment, the board must release the case and issue authorisation to enable the claimant to proceed to court.

The key sanction contained in section 8 seems to be the constraints on subsequent legal costs, whereby the court will have discretion to make an order for the costs it will allow the claimant. Section 8 seems to closely follow the proposals in section 3 of the Personal Injuries Assessment Board (Amendment) Bill 2018 introduced by Deputy Michael McGrath. In the case of personal injury claims, a claimant must bring a case to court within two years. Deputy Penrose referred to the famous Renehan case, where an issue arose when a new respondent was added to the case who argued that the limitation period had elapsed and, therefore, the claim was statute barred.

A very welcome provision is section 9, whereby the PIAB will have to publish an updated version of the book of quantum every three years.

The PIAB was established under the 2003 Act in order to address the number of claims going through the courts system and the high awards being granted. Around that time, insurance premiums were increasing rapidly and the companies blamed expensive court cases and the litigation process. However, since the establishment of the PIAB, insurance premiums have remained stubbornly high. Hence, the continuous concern in this House and at the finance committee, which did a lot of work on this issue in the last Dáil, that the cost of insurance remains a serious burden on small businesses, schools, clubs and community development bodies and every household and citizen.

I commend Deputy Michael McGrath of Fianna Fáil who introduced the Personal Injuries Assessment Board (Amendment) Bill 2018 last June, a key reform measure we were happy to study and which is reflected in the Bill before us. Deputy Michael McGrath's Bill sought to address the issue of some claimants using the PIAB simply as a rubber stamp on their way to the courts. His Bill put an onus on a court hearing a personal injuries case to have regard to the failure of claimants and respondents to attend a medical examination. The Bill before us approaches the consequences of that failure in a similar way.

Since its establishment, the PIAB must issue an authorisation before a claim can proceed to court, but premiums remain very high. This is something we have heard time and again in this House and at the finance committee and it is echoed in the figures. In 2017 there were over 33,000 applications to the PIAB and 12,500 awards, a reduction on the figure for t he previous year. The value of awards in 2017 was €315 million, while the average time to process claims and awards is reported to have been 7.3 months. The highest award in 2017 was over €600,000 and there were 105 awards of more than €100,000, although the majority of awards were under €20,000. The number of claims seems to follow population, with one third of claims in Dublin, 9.6% in Cork and 4% in counties Meath and Louth.

Many of us, including Deputy Penrose, have raised the cost of litigation. When replying to me during Leaders' Questions recently on another matter, the Taoiseach told me that we were very litigious people, which we certainly are. It is a consistent issue. The excellent Oireachtas Library and Research Service staff have provided a very good briefing on the Bill, as they do on all key legislation. They highlighted that the former Minister of State and Deputy for Galway West, Frank Fahey, had said in the past that litigation costs added 40% to the cost of compensation. The figure is now over 42%, which is unacceptable. When the PIAB was set up in 2003, it was hoped we would have a speedy means of finalising genuine personal injury claims, rather than going through this expensive litigation system.

The review of the book of quantum is welcome. It reminds us again of the major differences with the United Kingdom. I see that departmental officials are present. Has the Department durng the years studied the situation in Northern Ireland and Britain to find out how its less costly awards are arrived at? I know that there is a discount rate which is used to assess the cost of future loss. That rate is based on the Ogden tables, actuarial tables that examine cost in future years, for example, for somebody who has suffered a life changing injury. Deputy Penrose referred to cases of this type in which he has represented citizens in the courts. Will the Department keep this matter under review as we move forward with the new legislation, given that it could look to Britain as an example? Perhaps we might llook, once and for all, at the New Zealand system and see if the House has the courage to go straight to that system. In any case, the procedure in the United Kingdom seems to be ahead of ours.

Deputy Penrose also referred to the independence of judges. This issue has arisen many times in the House, for example, in the context of traffic law, for which the Ministers, Deputies Ross and Flanagan, are responsible. In a recent speech the Chief Justice, Mr. Justice Frank Clarke, called on us to look at the impact the legislation we were passing would have on future litigation, in other words, whether legislation would almost provoke future litigation. I questioned the Minister, Deputy Flanagan, on the matter. To reply to the Chief Justice with the reply I received, the Minister said that, as we now engage in pre-legislative scrutiny, there was constant scrutiny of the issue. We could use the vast experience of the Judiciary, led by the Chief Justice, to understand what exactly happens in the courts, why the book of quantum seems so high and why so much money is spent on litigation. This is another issue that might be addressed in the future.

It is disappointing that recommendation No.16 of the cost of insurance working group is not addressed in this Bill and that we must await further legislation in this regard. The Minister will be aware that recommendation No. 16 provides that we ascertain and set out the measures necessary to implement pre-action protocols for personal injury cases. I note there has been some criticism in the media regarding the financial reserves of the PIAB, which at the time of receipt of the report in August totalled approximately €17 million, being remitted to the Exchequer. To most of us in this House it is obvious that this should be the case because the surplus reserves of the PIAB are the people's money. As there is no legislative basis for this to happen, it is provided for in section 13 of the Bill.

I welcome the Bill. It is an important step forward. I again commend Deputy Michael McGrath on providing us with the formula to make progress on this issue and Deputy Kelleher on his work which means we will have a speedier and less costly process in future. Essentially, this is a move towards reducing the heavy burden insurance costs place on businesses and households.

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