Dáil debates

Thursday, 25 March 2021

Civil Liability and Courts (Amendment) Bill 2021: Second Stage [Private Members]


5:25 pm

Photo of Michael LowryMichael Lowry (Tipperary, Independent) | Oireachtas source

This Bill is long overdue. For far too long, a minority of people have brought false and fabricated insurance claims before the courts, in the same way as others might place a bet. They have gambled and taken a chance because they knew they had little to lose except perhaps the cost of their own legal representation, assuming they were not using a no-win, no-fee solicitor. Insurance fraud is prevalent across Ireland. It is so common that many do not see it as an offence. As it stands, there is no penalty or deterrent for abusing the system and making a false claim. Too many people see our insurance industry as a soft touch and some are prepared to go to extraordinary lengths to exploit a porous system. That mindset has clogged our court system with fraudulent and exaggerated insurance cases and resulted in people walking away with large sums of money for minor incidents.

Insurance fraud happens right across society, from the deliberate staging of a physical accident to those who try to claim double the value of an insured item. Some people feel that they have paid insurance premiums for many years and it is time they got some of that money back. There is a mistaken belief that the insurance companies can afford to pay out on claims without impacting premiums. People imagine that the insurance industry charges high premiums so that it has the money to pay out claims but this thought process must change. People must realise, for the first time, that not only do exaggerated insurance claims not pay but that by making such a false claim, they will pay a price. That price will act as a sufficient deterrent to them and others and eliminate the scourge of insurance abuse. Significant costs are incurred by individuals and business owners in defending such cases in court. Businesses have faced soaring insurance premiums as a result of the actions of fraudsters. Many business owners are of the view that insurers settle dubious claims too easily.

There are two main types of concocted insurance claims, the staged claim and the opportunistic one. Staged claims are more common than people realise. We regularly read about so-called crash for cash cases whereby people stage a car accident with another driver known to them or an innocent motorist. They invent the circumstances of the crash, exaggerate their injuries and often attend hospital complaining of random neck and back injuries. They claim medical benefits, hire a legal representative and head to court. In some cases, rather than engage in lengthy and costly legal proceedings, insurers settle cases outside court and the claimant walks away with a tidy sum. An opportunistic claim is different. Generally an incident of some kind occurs and the injured party has a genuine claim to make. However, the claimant chooses to overstate the claim to increase its value or overstate the damage to an item to get maximum value. The prospects for making opportunistic claims are as endless as the numbers engaging in such activity.

This amendment will act as a deterrent to those who consider making a fraudulent claim at either end of the scale. It will make the opportunistic claimant think twice and will make the staged claimant realise that his or her activities are not a pathway to easy money and that the penalties are real and far-reaching. This amendment is long overdue. Had there been a deterrent in place before now, millions of euro could have been saved by insurers which would benefit all of us through a reduction in insurance premiums. This Bill is only one of many measures required to end the culture of insurance manipulation.


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