Barry Cowen (Offaly, Fianna Fail) | Oireachtas source

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

I am happy to speak on this Bill this evening. Contrary to what the Taoiseach has espoused, this Bill forms part of a series of constructive measures put forward by Fianna Fáil to tackle the high insurance costs businesses and individuals are facing throughout the country. We debated a Fianna Fáil motion on business insurance here some weeks ago and some play and leisure centre owners came to witness it. Those owners are on the brink. People running businesses do not have the time to turn up here to view a debate on insurance, but these people are now desperate and on a cliff edge.

We now hear almost weekly of businesses going to the wall because of the excessive cost of insurance. The rises reported are astronomical. The owner of a play centre in Navan, County Meath, Ms Linda Murray, has highlighted her experience. She was quoted €2,500 for insurance in 2012 but last year her quote was a staggering €18,500, which is an increase of 640%. As bad that was, worse was to follow for Ms Murray. She cannot get a quote at all this year so she faces two stark options. She will have to self-insure or cease trading. Ms Murray's business is not alone in this regard.

Businesses throughout the country are being put under enormous pressure. Many are choosing to self-insure but we are not certain of the overall number. It is highly risky and, of course, leaves a potential claimant in the lurch if a serious accident occurs. This is not a sustainable solution to the problem but businesses are being forced to choose between this and simply closing. It is not just and it is not right. These are hard-working people running businesses we all cherish and rely on. While we are talking about play centres closing today, we could be talking about childcare facilities closing tomorrow. The cost and availability of childcare is already in a dire state of affairs. There are not nearly enough childcare facilities. We will spend millions of euro of taxpayers' money in the coming years to make childcare more accessible and affordable for more parents. I fear those funds will be wasted if we do not see insurance reform.

The reform that is happening is too slow. We are still waiting for a national claims information database which was to be up and running in June 2018. We are still waiting for a system that will compel insurance companies to inform policyholders of claims made against them. We are still waiting for a judicial council to be established to tackle the level of personal injury awards. We are also still waiting for a publicly funded insurance fraud unit in An Garda Síochána and we are still waiting for an integrated insurance fraud database. Who knows when these endeavours will be done?

Investigations on potential anti-competitive behaviour are all the while ongoing in the European Commission and in the Competition and Consumer Protection Commission. The Government, unfortunately, has completely turned its back on the insurance problem and left small businesses to fend for themselves. Insurance fraud is among the many reasons insurance costs are shooting up. It is certainly not the only reason but it is a substantial one. Insurance fraud costs us all, and those known to have made a fraudulent claim should suffer the consequences.

Approximately two weeks ago representatives of Alliance for Insurance Reform appeared before the finance committee when Mr. Peter Boland quoted a member of the public who had attended one of its meetings. The quote sums up the entire problem of insurance fraud. The person in question said:

If I had a need for big money and I had a choice between robbing a bank and faking an injury, I'd pick the fake injury every day. More money and no consequences if I'm found out.

There appears to be no downside to bringing a fraudulent claim. While there have been cases of claims being thrown out, there has been no follow-up or penalty. There appears to be no cost or consequence for engaging in this practice. While the majority of claimants act in good faith, a minority bring fraudulent claims to court in the hope they will receive large awards in the tens or hundreds of thousands of euro. That is simply wrong. If someone was to simply rob money from a bank, the book would be thrown at him or her if he or she were caught. However, when someone makes a fraudulent claim in court and is found out, nothing happens. There is no prison sentence or fine and there is no recognition of the significant costs incurred by those who must defend the claim.

The Bill aims to get tough on insurance fraudsters. If it is enacted, the cost of bringing an insurance claim will be significantly increased. Section 26 of the Civil Liability and Courts Act 2004 sets out what constitutes insurance fraud. It provides that if a plaintiff or claimant in a personal injuries action gives or adduces, or dishonestly causes to be given or adduced, evidence that is false or misleading, in any material respect, and he or she knows it to be false or misleading, the court shall dismiss the action. The section further provides that if a person has sworn an affidavit that is false or misleading in any material respect and that he or she knew it to be false or misleading when swearing it, the court shall dismiss the plaintiff's action. Section 26(3) provides that, for the purposes of the section, an act is done dishonestly by a person if he or she does the act with the intention of misleading the court. The definition in the section is tight and serves its purpose well. If someone stands up in court and intentionally misleads it, it shall be deemed a fraudulent act. However, the only thing the court can do under the Act is dismiss the case. No other action can be taken. It is a matter for the Director of Public Prosecution to take up the case and seek a conviction. Section 26 must be tougher to take cognisance of the serious risks and costs faced by the defendant who defends a claim dismissed under its provisions. This amendment Bill proposes to insert in section 26 a provision that in any case dismissed under the section, the claimant must pay the legal costs of the defendant. That will increase the cost of knowingly misleading the court. Those bringing claims in good faith have nothing to worry about from this change which will only impact on those seeking to deceive the courts.

Of course, the Oireachtas cannot instruct the Judiciary in that regard. We cannot simply tell the courts to do this and let that be the end of it. The courts need this direction because every case is different and every claimant is different. The language of the amendment Bill takes this on board and replicates the language already used in section 26. A court may not give an order to pay the legal costs of the defendant if it believes it would be contrary to natural justice to do so. In the case that it is contrary to natural justice, the court shall note this in its decision. This gets the balance right between increasing the penalties for fraudsters and respecting the difference of each case and the fact that each claimant has his or her own circumstances which must be taken on board. Last year my colleague Deputy Kelleher introduced a similar Bill to amend section 26. That Bill proposes that where a court dismissed an action pursuant to section 26, it should direct that a transcript of the action and any relevant evidence be sent to the Director of Public Prosecutions. The Bill before the House should be taken in conjunction with our Bill last year. Together, the two Bills will make section 26 far stronger than those who clearly mislead the courts in making personal injury claims.

The second part of the Bill seeks to increase the maximum fine that can be imposed by the District Court on summary conviction for committing fraudulent actions under the 2004 Act. A summary offence is one which can only be dealt with by a judge sitting without a jury. This type of offence is heard by the District Court. Under the 2004 Act, the maximum penalty that can be imposed on summary conviction is 12 months in prison or a fine of €3,000. The Bill proposes to amend the 2004 Act to provide for the imposition of a class A fine, which is a fine up to a maximum of €5,000. An indictable offence is one in respect of which a jury sits and it is heard before the Circuit Court or the Central Criminal Court. The maximum penalty that can be imposed on conviction for an indictable offence under the 2004 Act stands at ten years in prison or a fine of up to €100,000 or both. However, while we can have all the fines and sentences of imprisonment in the world, nothing will change if cases are not prosecuted before the courts. If policy holders and insurance companies settle out of court and fail to defend fraudulent claims, that fraud will not be detected. If the courts fail to dismiss cases under section 26, that fraud will go unpunished. If the Director of Public Prosecutions does not take cases in which insurance fraud is suspected, yet again it will go unpunished. If An Garda Síochána does not put in place arrangements for the reporting of suspected insurance fraud, nothing will happen. Fraudsters will continue to get away with cheating the system and the costs will continue to fall on honest, hardworking customers. Businesses will continue to be pushed to the brink and countless jobs will continue to be put at risk. This cannot continue. Figures released recently by the CSO indicate that fraud, deception and related offences have increased by a staggering 18.4% since last year. While I accept that these figures are reserved by the CSO, if anything, the numbers of instances of fraud, particularly insurance fraud, are likely to be far greater than it reports. That is simply because most cases of insurance fraud are not reported.

The Government must take the lead on this issue. As an Opposition party, Fianna Fáil can propose legislative changes and motions and keep putting the Government under pressure, but nothing will happen unless the Government as a whole recognises the problem. Why has it not taken the lead by providing the money for a dedicated unit within An Garda Síochána to tackle insurance fraud? Why have files not been sent to the Director of Public Prosecutions for prosecution? Why are we still waiting for an insurance fraud database to allow the industry to better track cases of insurance fraud? For far too long, the Government has dragged its feet on the issue. It does not see it as a priority and is failing to lead the way. How many businesses must go to the wall before action will be taken? The Government must fully establish national claims information databases inclusive of public liability and employer's liability insurance. We need an index to track insurance costs for businesses over time. A judicial council must be established to bring forward guidelines on personal injury award levels. It has been nearly a year since the Government first saw the final report of the Personal Injuries Commission which stated soft tissue damage awards in Ireland were four times higher than in England and Wales. We need legislation to compel insurance companies to inform customers of claims made against them.

These are among the many areas which were considered by the cost of insurance working group on which the Government has failed to deliver. Members on this side of the House have offered our full co-operation to meet the challenge. We have supported the quick passage of legislation when it has been put before us. At every stage, we have sought to get to the bottom of the insurance crisis. I hope that today this Bill will receive the support of the whole House. This is not revolutionary legislation. It is a simple Bill to increase the penalties for the making of fraudulent claims. However, that is only part of the problem. We need more focused attention by An Garda Síochána which has long called for the establishment of a dedicated insurance fraud unit within the force. The Government has dithered on the issue for far too long. We need to see more cases being brought before the courts in pursuit of convictions. We must get the message out that insurance fraud does not pay. The Bill will go some way towards sending such a message.

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