Catherine Murphy (Kildare North, Social Democrats) | Oireachtas source

It is fair to say that the PIAB can be broadly viewed as a law reform success story. If we recall the situation that pertained prior to this reform being introduced, it is easy to measure the contrast. It is not perfect, however, and reforms are needed but it has gone a long way in reducing costs and waiting times for people seeking compensation for personal injuries. It has created an intermediary process between claimants and the courts, requiring people to first apply to PIAB for an assessment, and proceedings may only be taken if authorisation is granted. The PIAB does not make any findings of liability but it assesses claims made to it by an injured party. The parties involved can resolve personal injury claims by direct settlement, through an assessment by PIAB or through litigation.

I am sure this point has been made before, but a Central Bank report in June this year stated that legal costs for claims taken in PIAB are 16 times less than those that go to litigation. The average time from reporting to a settlement of a claim was 1.8 years for PIAB, compared with 4.5 years through litigation. By and large, therefore, this process is better and shorter and there is a less expensive outcome for all the parties involved who engage in the process. This approach also frees up the courts for other matters. There will always be a limited need for litigation in personal injury claims. Many personal injury claims, though, benefit from the PIAB process, where assessments are fair, independent and non-adversarial.

Despite the successes of the PIAB, rates of litigation are still high, as are the costs of public liability and commercial property insurance. Radical reform is needed to address the cost of insurance. The fundamental issue in this regard is cost. We must not forget that affordable insurance is fundamental to the long-term interests of the country. We have a high cost of living and that is a factor. High insurance premiums add significantly to the cost base of our economy. The higher they go, the higher they push up other prices. In the midst of a cost-of-living crisis, we must deal with this issue. A survey undertaken by the Alliance for Insurance Reform, AIR, in April found that 42% of organisations believed that insurance premiums were threatening their future, while 90% said that the Government was not doing enough to address the issue.

Even the new guidelines used by the Judiciary to decide the quantum of awards for personal injuries have not had the desired effect. While they have undoubtedly had an impact on the cost of motor insurance, which has decreased by 12.1% in the year to the end of March, although we hear of great variations in this regard sometimes, the impact of the guidelines has been minimal in other areas. Homeowners are now having to pay up to 20% more to insure their properties as the cost of rebuilding homes has risen by more than €50,000 in the past year, while public liability premiums increased by a whopping 16% last year. If the Government wants to protect communities, charities, voluntary organisations and SMEs, it must address the threat caused by insurance companies exiting an already uncompetitive public liability insurance market.

Competition in this market is urgently needed and efforts to attract more market entrants need to be ramped up to drive down costs. Without competition, struggling businesses will fail, local services will cease operating and communities and voluntary groups will be unable to hold events. We all know the richness of community events, but now even the cost of the insurance required to run a bus to bring kids to a swimming class is prohibitive. Parents do not wish to get involved in doing these kinds of things. Therefore, this issue is critical to the functioning of good communities. The Department stated that the Bill’s intent is to introduce more predictability and remove volatility in respect of awards, and that this should then have a downstream impact on insurance premiums, the insurance sector and claimants.

We have yet to see much evidence of that. It is one-way traffic regarding the insurance companies. Since the new guidelines were introduced in April 2021, the average award in the PIAB has been reduced by 42%. This underpins the point I was making. Insurers did not pass on these savings to their public liability insurance policyholders. An awful lot more needs to be done. I understand that some claimants genuinely feel it is better to go to court, but much of the spike in cases moving to litigation is motivated by the profits legal professionals can garner from dragging claims through the courts. This is why enactment of the Bill is important. The new mediation process will meaningfully increase the number of personal injury claims processed by the board.

I agree with the recommendation from AIR that mediation should be available at any stage in the process, with the PIAB enabled to again propose mediation to both parties at a later stage in the process. Oftentimes, mediation will not be successful the first time around. People might, however, think about things and then decide to go back to the drawing board. This does not automatically mean that the only solution is litigation. If either party is willing to return to the negotiating table before a claim is moved to the courts, then that opportunity should be made available to them.

The initiative to place a responsibility on the PIAB to collect and publish data on personal injury claims is welcome. The board has vast experience, totalling more than 17 years, of processing virtually every personal injury claim made here. It now processes and assesses many more claims than the Judiciary, as few cases ever get into courtrooms. This is a valuable resource that should be used to the fullest. A suggestion was made during pre-legislative scrutiny that the Department should transfer Insurance Ireland’s claims data-sharing platform, InsuranceLink, into the ownership of the PIAB, and it does seem like the natural home for the platform. It is likely there will be issues with data and GDPR, etc., but it may be possible to overcome them and this is a proposal worth pursuing.

The Bill gives the board the responsibility to collect, collate and publish data on the insurance industry. The Department has also indicated it will provide significant data handling training to all personnel. It is an ideal opportunity to establish independence for InsuranceLink and to have all our insurance data providers under the one roof, if this proves to be possible. If it proves not to be possible, then I would like to hear the reasons for it. Has the Minister considered this recommendation?

Going back to one of the main aims of this legislation, which is increasing the number of personal injury cases which can be settled in the PIAB, the Alliance for Insurance Reform raised the issue of developing the board into a quasi-judicial body, similar to the Workplace Relations Commission, Residential Tenancies Board or An Bord Pleanála. This change would empower the board to adjudicate on claims with no need to go to litigation for the vast majority of cases. Currently, too many of the claims processed move on to needless litigation, and while mediation will help with some of this, it certainly will not solve the issue. It has been apparent for years now that the only beneficiaries of litigation in personal injury claims are solicitors and barristers, as well as the insurance industry, or almost all of it. The costs associated with the courts are used as an excuse to disproportionately inflate premiums.

I understand that this measure was looked at in the regulatory impact assessment and was rejected on the basis that the constitutional rights of access to the courts would be impacted. I would be interested to hear more on that. Could the Minister of State outline why reforming the board into a quasi-judicial body is deemed to be unconstitutional? That circle does not square with me because it is being done in other areas.

It is vital that the Government sends a clear message to the insurance industry that premiums must come down. We cannot continue to reduce the awards people are entitled to and watch insurance premiums continue to rise.

I welcome the Bill. It will decrease costs and time for everyone involved in personal injury claims. However, it is not the radical reform we need in the insurance sector. As a country, we tend not to do radical reform. We are more evolution than revolution. This is why the insurance market remains dysfunctional, with high insurance costs by international standards.

We are complete outliers on this in Europe, as I am sure the Minister of State will know. When Mr. Peter Boland from AIR appeared before the Joint Committee on Finance, Public Expenditure and Reform, he stated that his members were "met with disbelief - and, in some cases, laughter" from European counterparts over the extent to which insurance remains such an issue in Ireland. There are other small countries, islands such as Malta or Cyprus. I have not looked at the comparison but we cannot be outliers.

I support the points that Deputy Carroll MacNeill made. Indeed, it is something that we have both pursued at the Committee on Public Accounts. It is best is to avoid accidents that occur at birth if that is possible, and we must double-down on that. Where they occur, however, it is clear, and one sees it routinely outside the courts, that families had settled and they make the same argument about what the child's life will never be - the points that Deputy Carroll MacNeill made well in her contribution.

It was quite interesting that when we talked to the State Claims Agency about this at one of the most recent meetings we had with its officials at the Committee of Public Accounts, it was obvious that the behaviour changed during Covid because the courts were not as available and there was a higher take-up or more advice coming from solicitors regarding mediation. That is something that cannot be lost. Once to the courts opened up again, they reverted to type. It was clear that the settlements were of a shorter duration. Clearly, if the length of time is reduced as well as the volume of litigation, cases come to a quicker solution. It was quite instructive to listen to the State Claims Agency on that. It can be done but it was clear that the change there was within the legal profession where its members were advising claimants to take this route. More of that needs to happen and there needs to be impediments for channelling cases through a process that will be longer in an already difficult situation for families. I would like the Minister of State to take that on board.

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