Thomas Pringle (Donegal, Independent) | Oireachtas source

I welcome the opportunity to contribute to the debate on the Perjury and Related Offences Bill 2018. I congratulate the Senators on the passage of the Bill through the Seanad and on moving it on to this House. The Bill is to be welcomed. Perjury has been around for a long time, but this is the first time it will be properly defined in Irish law and treated as a specific criminal offence. It is currently treated as a common law offence and as such is deemed more difficult to prosecute. A ten-year jail sentence and a fine of up to €100,000 will, I hope, help to deter people, including gardaí, business people and State employees, from lying materially under oath, whether in court, at tribunals or during commissions of investigation. This legislation has been talked about mainly in conjunction with insurance claims and so on, so I will concentrate on that.

The creation of a specific criminal offence of perjury has been hailed as a way of combating personal injury fraud and consequently bringing down soaring insurance premiums. This is disingenuous. As we saw recently in the finance committee, large insurance firms are either exaggerating the number of fraudulent personal injury claims they receive in order to hike up premiums or grossly under-reporting them to An Garda Síochána. FBD, AXA, Allianz and AIG are all on record estimating one in five personal injury claims to be fraudulent. This 20% headline figure is the one that dominates the headlines, giving the impression that one fifth of claimants are fraudsters. However, digging deeper into the numbers paints a different picture altogether. Out of a total of 2,500 personal injury claims in 2018, AIG flagged 18%, or approximately 450, as suspicious but only reported four cases, or less than 1%, to the Garda. If this is a case of failing to report suspicions of fraud, the insurance companies could be breaking the law. Either way, they are not telling the whole truth. Mr. Justice Kevin Cross, the head judge in the personal injuries section of the High Court, recently stated that "it is fundamentally dishonest to blame supposedly fraudulent claims for the cost of insurance". Unfortunately, the insurance companies' spin is being widely accepted and repeated in the Dáil and in the media, leading to a total clouding of the real issue of insurance companies making huge profits from gouging their customers.

Unregulated insurance hikes are also leading to the closure of businesses, particularly in the leisure sector. There is no transparency as to how premiums are calculated. It can be difficult even to find details of one's own previous premiums before they were increased by the company. Anecdotally, I have heard of insurance renewal notices that do not refer to the customer's previous premium, with the person involved being required to follow up separately with the company in order to find out what his or her premium was for the previous year. Given that car insurance is a prerequisite for driving on the roads, this information should be made readily available in order that increases can be easily tracked. Companies should be required to provide details as to how they calculate premiums.

According to Insurance Ireland, 17 general insurers in the marketplace made combined operating profits of €227 million in 2017, up from €16 million in 2016, a profit increase of over 1,300%. Motor insurance was very profitable for insurers in 2017 - not so great for motorists though - with the 17 companies making a combined profit of €124.8 million on private and commercial motor insurance. The companies made 16.2% more on customers' motor premiums in 2017 than they did in 2016. These companies reported a loss of €24.6 million on employer liability, which is not much in the context of their profits.

The Central Bank is looking into reports that insurance companies are also scamming customers through dual pricing, whereby they charge renewal customers more than new clients, effectively penalising loyalty. This is not just an Irish phenomenon. A report by the UK Financial Conduct Authority in October stated that millions of customers of insurers operating in the UK were paying a total of £1.2 billion, or €1.4 billion, more than they should. This is shocking.

Insurance companies are cleaning up and it is time for us to look at insurance in a different way. New Zealand got rid of a tort-based system in 1974 in favour of the state-owned Accident Compensation Corporation. The ACC provides cover and compensation for all accidents and injuries in the country. Operating on a no-fault basis, the system is funded through general taxation and an employer levy. There is a fixed award structure, ensuring consistency in compensation for similar injuries. It is affordable and easy to navigate and claims are processed relatively quickly, so one might say it would never work here. Critics complain that the no-fault aspect could translate to no accountability, with people becoming more negligent in the absence of repercussions. In reality, however, this is a well-functioning system which has largely removed the element of blame. Furthermore, the fact that it is state-owned means the private insurance companies are prevented from capitalising on it.

Another idea would be to open up the insurance market across the EU, which would add to competition and result in lower premiums. In May of this year the European Commission launched a formal antitrust investigation into whether Insurance Ireland's InsuranceLink data pooling system is restricting competition by offering a competitive advantage to its subscribers, effectively operating a cartel. Excluding other companies from this data pool could potentially reduce motorists' choice of car insurance policies at more competitive rates. Antitrust investigations can take years to complete, but it will be very interesting to hear the outcome of this case. I think it will do more to reduce premiums than this legislation will.

There is also the question of whether this Bill will lead to meaningful change in deterring people from lying under oath. Section 25 of the Civil Liability and Courts Act 2004 provides that where a person gives or dishonestly causes to be given evidence in a personal injuries action that is false or misleading in any material respect, or which he or she knows to be false or misleading, he or she shall be guilty of an offence. Section 14 of the same Act requires the plaintiff to swear an affidavit as to the truth of all assertions, allegations and information provided to the defendant. However, the cost of insurance working group looked at the use of this legislation to date and found no prosecutions or convictions under section 14.

Ken Murphy, the director general of the Law Society, highlighted that there is a lack of will to pursue such cases. CSO figures show that only two perjury offences were recorded in each of the years 2011 and 2012. Why should we believe that this new Bill will radically change the position ? According to the 2016 Personal Injuries Assessment Board statistics, the number of employer liability workplace accident claims increased by 8.2%. The Irish SME Association, ISME, has lobbied for the introduction of the Perjury and Related Offences Bill, citing the fraudulent claim spiel. Perhaps rather than vilifying the usually genuine injured party, it could perhaps focus more on addressing the cause of such accidents at work. Many of these incidents involve life-changing injuries which happened as the result of negligence on the part of an employer, so rather than engaging in victim-blaming, ISME should work on raising its members' standards. In conclusion, while I welcome this legislation in the hope that it will prevent people from lying in court to gain a personal advantage, I am sceptical that it will lead to lower insurance premiums. In this regard, it is being used as a distraction from the real need to properly regulate the insurance industry or to replace it with a fairer, State-run, not-for-profit alternative.

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