Louise O'Reilly (Dublin Fingal, Sinn Fein) | Oireachtas source

I welcome the opportunity to speak on this important legislation. I offer my thanks to all those who have worked and continue to work on it. I echo the sentiment expressed by the Minister of State, Deputy Calleary, in respect of the former Minister of State, Deputy Troy. I know that a very significant amount of engagement went into the production of this Bill. On behalf of my party, I offer our qualified support for the legislation, which will not surprise any of the Members sitting opposite me. We believe amendments must be forthcoming on Committee Stage to ensure the mediation process will achieve an actual reduction in costs, and not as some fear, an increase in costs once the entire cost of the mediation, and every other process, has been factored in. Some practitioners have raised concerns that the additional layer to the system by way of mediation could potentially create additional delays and consequent costs to the PIAB process. Any movement to reduce the cost of claims, speed up the process and therefore reduce insurance premiums, is to be welcomed. Anyone who has spent any time watching politics over the past ten years will know that this is an issue that my colleague an Teachta Doherty has championed on every single occasion. We are therefore very much in favour of that which will reduce the costs here.

The Personal Injuries Resolution Board Bill 2022 relates to the programme for Government commitment to enhance and reform PIAB and to the commitments in the Action Plan for Insurance Reform to provide for a change of name to the personal injuries resolution board. The Bill proposes to amend the Personal Injuries Assessment Board Acts 2003 to 2019 to increase the number of personal injury claims settled through PIAB and avoid the expense and time associated with litigation. The objective of the Bill is to amend the legislation to facilitate an increase in the number of personal injury claims that may be resolved through the board. Furthermore, the proposed Bill introduces the option of mediation which could be facilitated through a mediation officer. Under the new proposals, parties will be asked to consent to mediation and, if mutually agreeable, it is envisaged that PIAB will facilitate mediation via a mediation officer appointed by them. The appointment of those officers will be very important. They need to be the right people with good experience. Over time they will build up experience which will be vital. Again, the terms and conditions of these people will be very important because not only do we want them to start the work, but we also want them to continue the work because anyone who works in mediation will say that one builds up that knowledge over time, which is a shortcut in and of itself. The Bill further seeks to extend the powers of PIAB to assess more complex injuries to include psychological injuries and aims to increase the number of personal injury claims that can be resolved by including these types of claims not previously assessed by PIAB.

As I said, we offer our qualified support at this point and look forward to further scrutinising the Bill on Committee Stage. Sinn Féin wants to see the best outcome for consumers; we are not here to represent the interests of the insurance industry or indeed the legal sector. We have continually advocated for the strengthening of the powers of PIAB as a means of reducing the legal costs involved in claims settlement. One of the reasons PIAB was set up to was to avoid unnecessary litigation and to bring a fair and independent assessment to people early on to settle their claim without incurring additional costs. In this regard, can I be clear that this discussion today is not about the so-called claims culture? I believe we need to move away from using that language. As the head of PIAB stated earlier this year:

... people pay insurance for a reason. It's important to recognise there are genuine claims but, at the same time, all this additional cost is being entered into the system via litigation.

It is the additional cost of litigation that this Bill seeks to address, and we must keep that to the forefront of our minds in our discussions today and as the Bill makes its way through the Dáil and Seanad. PIAB has noted that in motor insurance, only about 2% of claims are litigated and just 4% of employer and public liability claims are actually heard in court, with the vast majority being settled post PIAB on the court steps. It is in this space that mediation intends to insert itself.

The supposed benefit to ordinary people of strengthening these powers is that claimants would receive their compensation more quickly and unnecessary litigation would be avoided, thus saving on legal costs. This is the hypothetical benefit to the individual claimant if this Bill is passed; but any reduced legal costs emanating from this Bill must make their way into reduced premiums for all consumers. It is presupposed that this will lead to a more stable insurance market to the benefit of consumers, businesses and insurers alike. The reasons for this are the cost of insurance and the duration of litigation, both of which threaten consumers and businesses. In its motor report on the national claims information database, the Central Bank of Ireland reported that in 2020 the legal costs associated with settling personal injury claims through litigation were €16,064, compared with costs of €841 through PIAB. That is almost 20 times more. The Central Bank report also outlined that litigation has a very limited effect on the compensation of the claimant; that an average settlement through PIAB takes approximately 2.3 years and is often much quicker, compared with 4.2 years for a settlement through the courts and litigation; and that insurers have consistently said that consumers will benefit from quicker assessments and swifter payment of compensation through PIAB. Therefore, it is expected that extending the mandate of PIAB to enable it to resolve more claims should result in significantly reduced legal costs and, consequently, a reduction in the cost of claims. If all the above are achieved, it must result in reduced premiums. High insurance premiums are placing a severe burden on businesses, voluntary and community groups, sports and cultural organisations, and charities, to the point that many may struggle to continue to operate unless they are addressed.

The Alliance for Insurance Reform recently carried out a policyholder survey to mark the first anniversary of the implementation of the pivotal judicial guidelines for personal injury damages on 24 April 2021. This survey found that 42% of respondents believe that insurance costs are threatening the future of their organisation and this figure is not materially different from the response to the same question in research the alliance carried in 2018. It also found that 31% say insurance costs are preventing them from providing certain services, which is up from 26% in the 2018 survey. It must be noted, however, that PIAB reported that average awards for personal injuries claims made since the introduction of the personal injuries guidelines are down by 42% compared with 2020. This shows that strong action in the area of insurance can have a beneficial effect. Nevertheless, a lack of action will have the exact opposite effect because where claims are settled for significantly increased costs at the expense of a more economical and efficient alternative, this cost is passed on to policyholder’s premiums. Therefore, we need to ensure that this Bill is fit for purpose and that the personal injuries resolution board is resourced so it can mediate to reduce the costs of claims. If this happens and savings are realised, they must be passed on to the consumer. If this is done, it will benefit businesses, voluntary and community groups, sports and cultural organisations, and charities by making insurance affordable. At a time when many charitable organisations are under pressure, I was talking to a woman from the Balbriggan senior citizens group recently. She told me that the cost of their energy bills is completely crucifying them. Any help that can be given to these groups will be very beneficial because we will not miss them until they are gone, and then we will really miss them.

I will finish on a very important point. It behoves politicians to promote the work of PIAB and inform the public of its benefits compared to costly litigation, which benefits the vested interests and not always the claimant or consumers. Currently, claimants are either not being informed or, and I hope this is not the case but I have heard that it is in some instances, are being dissuaded from going to PIAB.

Bypassing PIAB or advising against PIAB is, in my opinion, not in the best interests of the claimant. As stated previously, the legal costs associated with settling personal injuries claims through litigation is multiple times more than through PIAB, litigation is twice as long as going through PIAB and the average compensation is virtually the same. Therefore, I must reinforce the need for public representatives to espouse the benefits of PIAB to make sure that claimants and customers are put first and that we, as a House, work out a way to ensure PIAB is not being negatively briefed against.

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