Dáil debates

Tuesday, 16 April 2019

Civil Liability and Courts (Amendment) Bill 2019: Second Stage [Private Members]

 

9:45 pm

Photo of Ciarán CannonCiarán Cannon (Galway East, Fine Gael) | Oireachtas source

On behalf of the Minister, Deputy Flanagan, I thank Deputy Michael McGrath and other Members for their active participation in today's Second Stage debate. It is evident from the discussion that the issues of insurance costs and insurance fraud are of fundamental concern, while also being very difficult to tackle comprehensively.

As is clear from the range of recommendations made by the cost of insurance working group, its legal subgroup, its dedicated fraud round table and the Personal Injuries Commission, a concerted response, although complex, is required. We have to take this Bill into consideration in that context. Some of the interventions this evening have, therefore, related to the adverse impact on enterprise and private citizens of insurance fraud, which seems to have had a tacit acceptance as some kind of victimless crime. As evidenced by the work of the cost of insurance working group, however, and by the various interventions on the matter before the House in committees, there seems to be a renewed determination to deal with the issue this time around, notwithstanding our impatience to see our responses have immediate practical effect. This has informed the range of legislative and administrative measures being taken in response to the cost of insurance working group, along with others in detailed preparation.

In addition, it is increasingly evident that insurers are making much greater efforts under existing law to crack down on suspected fraudulent claims. They recognise that the short-term costs incurred will be significantly offset by the long-term value of deterring fraud. A number of recent high-profile court judgments have left no doubt about the legal consequences of insurance fraud and the legal sanctions that apply. There is no room to rest easy about this. The key responses include the new Personal Injuries Assessment Board (Amendment) Act 2019, which was commenced on 3 April last. This Act will reinforce the Personal Injuries Assessment Board process. New guidelines for the reporting of fraudulent insurance claims to An Garda Síochána have been published. The act of recording statistics on insurance fraud is now taking place on the Garda PULSE system.

In its 2017 report on motor insurance, the working group on the cost of insurance sought to bring about further co-operation between An Garda Síochána and the insurance sector in respect of insurance fraud investigation. This included the possibility of a dedicated Garda insurance fraud investigation unit, which would be funded by the sector. As the House will be aware, the Garda Commissioner indicated in December 2018 that his preference, in principle, was that the force, in addressing this matter, would not be funded by any source other than the Exchequer. I understand the Garda Commissioner has indicated that he is continuing to look at establishing an improved investigative capacity within An Garda Síochána to tackle this key area while taking account of factors such as the availability of resources and competing demands.

In parallel, significant progress has been made on enhancing the level of engagement and co-operation between An Garda Síochána and the insurance industry. Part of this arose from the fraud round table, which was hosted by the Department of Finance with stakeholder consultation. This has resulted in a working commitment between the Garda National Economic Crime Bureau and Insurance Ireland's anti-fraud forum to meet regularly to discuss and act on current and ongoing issues which arise in the area of insurance fraud.

In response to a recommendation set out by the working group on the cost of insurance in its January 2018 report, the Law Reform Commission, LRC, is conducting a detailed analysis of the possibility of developing constitutionally sound legislation to delimit or cap the amounts of damages awarded by a court in respect of some or all categories of personal injuries. This forms part of the LRC's fifth programme of law reform, which was approved by the Government on 20 March 2019. I understand that the LRC is giving immediate attention to this project and aims to publish an issues paper before the end of the year.

It should also be noted that in its final report, which was published in July 2018, the Personal Injuries Commission, which is chaired by the former President of the High Court, Mr. Nicholas Kearns, noted this development and expressed the belief that the LRC is the appropriate body best equipped and best resourced to undertake this study. The commission has recommended that the future judicial council should be assigned under its statute the function of compiling guidelines for appropriate general damages for various types of personal injury. It has said that pending the introduction of such legislation, the Judiciary should participate with representatives of the Personal Injuries Assessment Board and the Department in the formulation of guidelines as to quantum in cases of claims for damages in respect of soft tissue or whiplash injuries. These matters are under consideration between the Minister for Justice and Equality and the Chief Justice. The Judicial Council Bill 2017, which has completed Committee Stage in the Seanad, will also provide for judicial training in this area.

The Central Bank (National Claims Information Database) Act 2018 was commenced on 28 January 2019, on foot of a recommendation made by the working group on the cost of insurance, to facilitate a more in-depth analysis of annual trends in motor insurance claims. This was seen as key to developing an understanding of the impact that claims and their costs are having on premiums. A data subgroup chaired by the Department of Finance was set up to oversee the development of the database and the underpinning legislation. The availability of information collected under this legislation allows policymakers to have a better understanding of the factors that influence the cost of insurance.

A cursory consideration of the various outputs - I draw the attention of Deputies to the latest update from the cost of insurance working group, which has been published on the website of the Department of Finance - will confirm that a concerted policy approach is being taken by the Government to address insurance costs and insurance fraud. Departments, Government agencies, the insurance industry and the wider business sector are on board. The Judiciary, the courts and the law enforcement agencies have engaged in a manner appropriate to the independence of their functions. Consumers are engaging to ensure they get a fair deal on insurance at the level of enterprise or as private citizens. We have a whole series of mutually reinforcing measures in play. It is intended that their collective implementation will give greater effect to the law and to the regulation of this area. We must achieve this in a way that can better serve bona fide insurance consumers and legitimate claimants while deterring and penalising fraudsters. The insurance sector itself needs to come on board as well. It needs to take a more determined approach to finding viable ways of providing cover in neglected or deserted areas of enterprise and community activity, which are being hit so hard from an insurance point of view at present.

Given the convergence of today's Bill in relation to avoiding an injustice with section 26 of the Civil Liability and Courts Act 2004 and with the ongoing programme of action being taken by the Government, the Minister, Deputy Flanagan, is looking forward to working with Deputy Michael McGrath to make progress on the issues concerned. At the same time, it has been set out that there are fundamental policy, legal and constitutional issues that need to be placed on a clear footing if the making of orders of costs in the manner being proposed under this Bill is to happen without unintended consequences.

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