Dáil debates

Thursday, 25 March 2021

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


5:55 pm

Photo of Martin KennyMartin Kenny (Sligo-Leitrim, Sinn Fein) | Oireachtas source

We will support this legislation. We understand exactly what it is about and the good intentions around it to ensure that we do everything possible to mitigate against people who make bogus and fraudulent claims and try to defraud either insurance companies or indeed businesses that are doing their best to try to survive in the difficult climate that we are in. We also believe that it needs to go to Committee Stage and that considerable work is needed. I hope that the proposers of the legislation would not in any way feel slighted by that. There is work to be done on it. The issue of insurance, the insurance industry and its reform is one that we all take seriously in this House and we all want to see much more work done on it. We were all disappointed in recent weeks when limits were put on payouts for minor injury claims, when we heard the insurance industry come out almost immediately and say that it will not really make any difference and that it will not really be reducing premiums because it has not gone far enough.

One of the central tenets of what we need to look at here is that the insurance companies will always have reasons they need to keep premiums so high. Normally the reasons are about fraudulent claims and about how so much fraud is happening. Deputy Grealish mentioned some of them saying that up to 20% of claims were fraudulent. When they were questioned about whether they reported these fraudulent claims, they had not reported any of them. If they actually believed that the claims were fraudulent, why were they not reporting them? The other issue that we need to look at, which they always put forward, is the high level of payouts that we have in Ireland. There are high payouts for minor injuries but when one looks at the whole spectrum of payouts, there is little or no difference between them and other jurisdictions. They are quite similar because at the higher end, payouts in many jurisdictions are much higher than they are here. All of this needs to be balanced.

One of the primary things that we need to look at, which this legislation deals with, is section 26, about fraudulent actions, of the Civil Liability and Courts Act 2004. A case has to be dismissed on that ground for this to apply. Less than 1% of the cases about insurance claims over the past years were dismissed on that ground. It is seldom that an insurance company puts forward "fraudulent claim" as its defence. In most cases, it simply puts forward the reality that it feels that the person putting forward the claim either has not suffered the full extent of the injury or that the injury has not been that bad. It is seldom that a company tries to suggest that it is a complete fraud, because that is a dangerous route for companies to take. Work needs to be done on that.

The Bill states "the court shall make an order that the plaintiff shall pay the legal costs of the defendant". In the vast majority of cases that go to court, legal costs follow the judgment. If the judgment is against a particular party, the legal costs go against that party too. That is the case in all cases regardless of whether they are insurance cases. It reinforces something that already exists. While it is perhaps the right thing to do and needs to be done, we need to be careful about that. The court must be able to use a certain amount of discretion in these matters.

Subsection 2B states that the court may make the order for costs at its discretion. That is exactly as it happens at the moment. Maybe that needs to be tightened up or we need to examine where that is going. Regarding whether a file should be sent to the Director of Public Prosecutions, what we have here is a civil case being taken by an individual against another individual or a business which the individual claims that he or she has an injury as a consequence of. In that civil case, if the judgment goes against him or her, the judge will, in many cases where he or she feels it would be fraudulent, suggest that the gardaí investigate it. Whether or not it would be sent to the Director of Public Prosecutions, it would certainly not happen prior to gardaí investigating it and determining whether there is a criminal case for action to be taken. Work needs to be done on all of that. The part of the Bill which suggests that the fine should increase from €3,000 to €5,000 may well be appropriate. I would not have a problem in that respect where a case is fraudulent. One has to understand, as I said at the outset, that a tiny minority of these cases are defended on the basis that they are fraudulent. It is seldom that an insurance company defends them on that basis. It is only when that happens that this legislation would come into play. Work needs to done to make it more robust if that is what is needed.

We are talking about bogus and fraudulent claims. The excuses being put forward by the insurance industry in this country for the exorbitant cost of premiums in cases which are, if not bogus, certainly exaggerated in many cases need to be borne in mind too. The insurance industry is making a lot of money. It is doing well in this country. It continues to charge high premiums. At the same time, it always has a reason for it, and the reason is never that it is making too much profit. The reason is always fraud, and this, that and the other. We need to mitigate against that. Where there is genuine fraud, it needs to be dealt with. There are also cases where people have had a genuine accident, they take a case and go to a solicitor. The legal profession will of course encourage them, tell them that they have a case and to move forward with it. They will go to a doctor and get reports and so on.

In fairness to the vast majority of people, they will put their best case forward. In most cases, I do not think it is unfair to say that most people will not underestimate how bad their injury is, but they will try to be truthful about it. If the judgment goes against them and the judge says that he or she does not think the person is as bad as claimed, that could be considered a fraudulent case. Should that person then have to pay the full costs of the insurance company after getting reports from doctors and so on? There needs to be balance in this. We all have insurance for a reason, whether it is car insurance, business insurance or any other sort, so that if we suffer a loss or injury, we will be compensated for it. It is right and proper that people should have that and they should be compensated for it. There is nothing wrong with people making claims when they are genuine and can be stood over. That needs to be brought into this too.

I have no issue in supporting this legislation going to Committee Stage, teasing out and perhaps improving it to a stage where it would do what it says on the tin, which is to mitigate against fraud and ensure that we put in place strong penalties for people who intentionally set out to defraud insurance companies or businesses. At the same time, we have to have balance and not go down the route of believing everything that insurance companies put forward as their reasons to skin people. That is exactly what they are doing with insurance premiums in this country.


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