Thursday, 8 November 2018
Personal Injuries Assessment Board (Amendment)(No. 2) Bill 2018: Second Stage
I move: "That the Bill be now read a Second Time."
I am pleased to bring the Personal Injuries Assessment Board (Amendment) (No. 2) Bill 2018 before the House. It is an important Bill as the Personal Injuries Assessment Board, or PIAB as it is commonly known, facilitates the objective assessment of damages at a much lower delivery cost and in a far shorter timeframe than does litigation. The cost of insurance working group's report on the cost of motor insurance was published on 10 January 2017 by the then Minister for Finance, Deputy Michael Noonan, and the then Minister of State with responsibility for financial services, Deputy Eoghan Murphy. The report suggested that the delivery costs for cases settled outside PIAB continued to be over 40% of compensation costs. Many commentators have suggested that the cost of personal injury claims is a contributing factor to the high cost of insurance premiums in Ireland. As Minister for Business, Enterprise and Innovation, I am very aware of the serious impact on businesses of high insurance costs and other costs of doing business. Encouraging more claimants to finalise their cases through the PIAB model rather than by resorting to litigation should lead to cost savings in the claims environment. This would be good for businesses, consumers and society as a whole by delivering compensation more quickly with lower costs and predictable outcomes.
The primary objective of the Bill is to amend the existing legislation, namely the Personal Injuries Assessment Board Acts 2003 and 2007, to strengthen PIAB by addressing operational issues to ensure greater compliance with the PIAB process and encourage more claims to be settled through the PIAB model. PIAB operates an administrative, paper-based process and assesses damages on the same basis as the courts in accordance with the laws of tort. Effectively, this means that PIAB assesses amounts for general damages for pain and suffering and special damages, which is the amount provided for financial losses, including wage losses, medical treatment costs and out-of-pocket expenses. PIAB does not determine liability. With the exception of claims for medical negligence, an intending applicant must make a personal injury claim through PIAB unless the case is settled directly with the other party. In assessing cases, PIAB usually requires the claimant to attend an independent medical practitioner for an up-to-date medical examination and final prognosis.
Within a legislatively defined time period of nine months, PIAB's assessors assess an award and issue it to both parties. If the award is accepted by both parties, an order to pay is issued against the respondent who then pays the compensation to the claimant. If either party rejects the award, PIAB issues an authorisation to the claimant. A PIAB authorisation is required before a claimant can initiate proceedings in court. Under the legislation, either party can reject a PIAB award. Award acceptance is not compulsory as making it so would impinge on the constitutional right of access to justice delivered by the courts. PIAB makes awards in approximately 12,000 cases annually with around 60% of claimants accepting them.
The acceptance rate has remained broadly consistent in recent years. These cases are dealt with speedily and at a low cost. The current delivery cost is approximately 6.5% of the value of the compensation and this mainly comprises the fees paid by the claimant and respondent and the costs of the medical reports required to assess the case.
In making its awards, the Personal Injuries Assessment Board, PIAB, uses the book of quantum so that awards reflect what is likely to be achieved through litigation but at a much lower cost of delivery. The overall average award made by the PIAB in 2017 was €24,879, with the average motor liability award being €23,234; the average employers’ liability award being €32,015; and the average public liability award being €27,638. Award values vary depending on the nature and severity of cases received. Today, the PIAB’s non-adversarial model delivers settlements to claimants without the need for litigation.
In 2014, a public consultation was held to examine the operation of the legislation and to identify any areas relating to the scope, powers or operation of the 2003 Act that required change. Some 29 submissions were received. The cost of insurance working group report made a number of recommendations in relation to strengthening the PIAB model, namely, to address non-co-operation with the PIAB and the frequency of the publication of the book of quantum.
The report on the rising costs of motor insurance from the Oireachtas Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach of November 2016 also recommended enhancing the powers of the PIAB.
The outcome of the public consultation process and the two reports referred to have informed the content of the Personal Injuries Assessment Board (Amendment) (No. 2) Bill 2018. Encouraging more claimants to avail of the PIAB model rather than resorting to litigation should lead to cost savings in the claims environment and this should ultimately lead to reductions in insurance premiums, thereby benefiting consumers and businesses.
I will now summarise the main provisions of the Bill. Section 2 amends section 13 of the 2003 Act in relation to the documentation required by the PIAB before the formal notification shall be served on a respondent to ascertain his or her wishes in relation to an assessment by the board of the claim. A formal notice will only issue to a respondent when an application together with a report prepared by a medical practitioner in respect of the personal injuries and the fee have been received from the claimant by the board. This amendment will not affect the operation of section 50. The Statute of Limitations will continue to be paused on making of an application to the board, whether it is accompanied by a medical report and fee. If the application is not accompanied by a medical report and-or the fee, the board may issue a preliminary notification to the respondent that a claim has been received identifying them as the person the claimant holds responsible for his or her injuries. However, the respondent will not be obliged to consider consenting to an assessment being made in the absence of a medical report and-or the fee being submitted to the board.
Section 4 amends section 17 of the 2003 Act regarding the discretion of the board not to arrange for the making of an assessment in certain situations as set out in section 17. These include situations where there is insufficient case law on the type of injury and the assessors cannot quantify the value of the claim, or in the opinion of the board, there is such complexity in issues regarding assessment of the claim, including, for example, issues involving multiple injuries or a pre-existing injury, that it would not be appropriate for the claim to be assessed, or where the injuries consist in whole or in part of psychological damage and it would not be appropriate for the assessors to assess the claim given the limited means afforded to them by the Act as to how they are to assess a claim. The assessors, unlike a court, cannot hear oral evidence from the claimant or observe the claimant undergoing cross-examination which may be appropriate in determining the value of a psychological injury in certain circumstances.
It is proposed to extend the categories listed in section 17 of the 2003 Act. This, for example, will include situations where the board is unable to serve statutory documents, or where the respondent has notified the board of his or her intention not to accept any assessment when made, or where a settlement has been negotiated in respect of a minor or persons of unsound mind to be approved by the court.
Moving to section 5, this section amends section 22 of the 2003 Act to provide for different levels of charges levied by the board on claimants and respondents for submitting electronic and paper formats of documents to them. As it is cheaper to submit and process documents electronically, this should be incentivised. There is also provision for the PIAB to levy staged charges on the respondent for the various stages of the claims assessment process.
Section 7 amends section 50 of the 2003 Act to ensure consistency in the disapplication of limitation periods under the Statute of Limitations within the PIAB process and to rectify any discrepancies arising from interpretations of the Renehan v. T & S Taverns judgment - 2015 IESC 8.
Section 8 amends section 51 of the 2003 Act by the insertion of a new section 51C to deal with cases of non-compliance with a request by the board under sections 23 or 24. The 2003 Act provides that where a claimant fails to supply details of his or her claim for special damages or where the claimant fails to attend a medical examination arranged by the PIAB, or where the claimant has failed to assist or co-operate with retained experts, the board is obliged to carry out the assessment. The assessment will not reflect the appropriate value of the claim and may therefore be rejected by the claimant. On rejection, the board releases the case and issues an authorisation to the claimant that allows the claimant to bring legal proceedings.
To deter non-compliance with the PIAB process, section 8, by the insertion of section 51C into the 2003 Act, introduces a deterrent in any subsequent legal proceedings in terms of legal costs whereby the court may, in its discretion, taking into account any failure to comply, make an order on what costs, if any, it will allow the claimant. The court can also order the claimant to pay all or a portion of the costs of the respondent. The amendment also provides a deterrent regarding legal costs for non-compliance by a respondent to a request by an assessor for information or documents or to assist or co-operate with retained experts. The court may, in its discretion, taking into account any failure to comply, make an order on what costs, if any, it will allow a respondent. This should contribute to maximising the use of the PIAB model, encouraging higher levels of consent to assess claims and increasing acceptance rates of awards.
The Bill, including this section, has been drafted in consultation with the Office of the Attorney General. While the general scheme of the Bill published in 2017 provided that, where the claimant has failed to comply with a request by an assessor under sections 23 or 24, the court would also have discretion as to what evidence would be admissible in court, in terms of claims for special damages or medical evidence, that was available but not submitted by the claimant to the board prior to the making of the assessment. The general scheme provided that where a respondent failed to comply with a request under section 23 for additional information, the court would have discretion to determine what evidence would be admissible in the proceedings.
On the advice of the Attorney General, the Bill has been drafted taking into account that the function of the court and the constitutional duty of any judge is to hear all the available evidence and arrive at a decision on foot of that evidence, and to determine issues of liability and quantum. A plaintiff also has a right to tender evidence before the courts. The court must retain discretion in any given case to ensure constitutional rights are vindicated and fair procedures are followed. This section of the Bill, by providing for potential financial consequences to be applied for non-compliance with requests by PIAB assessors should encourage parties to adhere to the requirements set out in the Act.
Section 9 amends section 54 of the 2003 Act to provide that the board shall review and update the book of quantum every three years, or sooner if the board decides it is necessary. The 2003 Act did not make it clear that the book of quantum should be updated at regular intervals. The book of quantum was first published in 2004 and updated in October 2016.
Section 10 amends section 54A of the 2003 Act to give the board power to obtain information from individuals or bodies to provide data for the purpose of the board fulfilling its functions in terms of preparing and publishing the book of quantum, and collecting and analysing data in relation to amounts awarded or agreed in settlements, and not just in relation to the board’s function regarding the making of a cost-benefit analysis.
Sections 11 and 12 amend sections 56 and 57 of the 2003 Act regarding the composition of the board to fully reflect Government policy that, insofar as appropriate, appointments to the board of non-commercial bodies are appointed following a Public Appointments Service process. The Bill also provides that board members cannot serve more than ten years on the board. This is in line with the 2016 code of practice for the governance of State bodies.
Provision is also made in the Bill that where a board member is nominated to the Seanad, or becomes an elected representative of the Oireachtas, the European Parliament or a member of a local authority, he or she may no longer serve as a board member.
Section 13 inserts a new section 74A to provide for a reserves policy for the PIAB.
Legal advice obtained by my Department is that legislative change is required for the board to remit surplus moneys to the Exchequer. The Personal Injuries Assessment Board, PIAB, shall now remit to the Minister, for the benefit of the Exchequer, any moneys in excess of those authorised to be retained by the Minister, with the consent of the Minister for Public Expenditure and Reform. The Bill specifically provides that the Minister will have regard to the operational, capital and contingency costs of the PIAB when determining the sum to be retained. At present, there is no legislative provision which provides that excess moneys can be remitted to the Exchequer. This amendment rectifies the position and implements a recommendation to the Department from the Comptroller and Auditor General that appropriate legislation be introduced to deal with excess funds held by the PIAB.
Section 14 amends section 79 of the 2003 Act regarding the service of documents by the board. It is proposed to legislatively underpin the use of electronic portals to enable the board to serve documents electronically where consent has been provided. The use of portals will also reduce administrative costs for all parties engaging with the board and introduce further efficiencies into the process. The Bill provides that the PIAB will have the facility to serve documents by using a document exchange mail service and this amendment will provide for this.
That brings me to the end of the provisions of the Bill. While some sections are technical, important changes are being made. I know there is significant interest in the Bill and that Deputy Michael McGrath initiated a Private Member's Bill in July covering the issues of non-co-operation with the PIAB, such as non-attendance at medical examinations and refusal to provide details of special damages, and, second, for the book of quantum to be reviewed every three years. I have outlined the measures proposed in the Bill on these two issues. I look forward to working with all Deputies and having their support for the Bill to enable its speedy enactment through the Houses of the Oireachtas. The Bill is one element of the Government’s response to facilitate cost savings in the personal injuries claims environment. More claims being settled through the PIAB rather than resorting to litigation should lead to cost savings in the claims environment. This should ultimately lead to reductions in insurance premiums, thereby benefitting consumers, businesses and society as a whole. I commend the Bill to the House.
I welcome the opportunity to speak. It is important to keep highlighting that there is a major problem in society and across the economy relating to the cost of insurance, including motor insurance, public liability and other insurance that is required to be taken out to cover liabilities. We have been discussing this issue for a long time. Certain actions have been taken but they are primarily establishing the facts as opposed to dealing with the consequences of them. We established the cost of motor insurance working group, which made recommendations and other recommendations followed from that. We have been slow in implementing these recommendations, which would have a profound impact on the cost of insurance.
The cost of insurance disproportionately affects certain sections of society and the economy. For example, motor insurance disproportionately affects those on lower incomes and living in rural areas. It has a profound impact on people on lower incomes who must often travel long distances for work because the areas they live in are determined by their low incomes. This is an attack on their entitlement to at least provide a reasonable standard of living for themselves. When people are paying €2,000 or €3,000 for car insurance, it can have a profound and disproportionate effect on families with low incomes.
The exorbitant cost of insurance also has a disproportionate effect on young people. The cost of motor insurance has a disproportionate effect on rural Ireland. The Minister represents a rural constituency. People in rural areas spend a vast amount of time travelling by car to and from places of work and education and to socialise. There needs to be an immediate effort to address many of these severe impediments to people.
The Fianna Fáil Party welcomes the Bill and hopes it quickly goes through the legislative process and has the intended impact. It has been drafted well and there has been broad consultation on it. There is also an acknowledgement that it reflects elements of the Bill my party published in July. Our Bill at least nudged this legislation in a certain direction and we welcome that. The public consultation of 2014 was followed by the working group on the cost of insurance, which has made its recommendations, some of which are included in the Bill.
Public liability insurance, which businesses must take out, has a profound impact. Those who take out this insurance are largely law-abiding and provide employment. Scamming through fraudulent claims takes place across this country. It is consistent and has reached epidemic proportions. We turned a blind eye to it for a long time because we were happy to keep loading the premiums. Businesses and people taking out motor insurance would keep paying. Something had to give, and what gave was that people could no longer afford car insurance. This caused an outcry and we are now reacting. In the context of business, we have to accept that we cannot assume that business can keep paying exorbitant increases in insurance. Insurance in some places now costs more than rates. This issue also has to be addressed.
The main reasons for the escalating cost of insurance are the significant legal costs arising from litigation and the cost of fraudulent claims. Fraudulent claims are built in to the premiums actuarially now and we do nothing about them. Legislators, law enforcement, courts and public prosecutors do nothing about it. There have been no prosecutions of people who go to court, lie, present fraudulent evidence under oath and take up court time telling barefaced lies and presenting fraudulent evidence. In the end, if a claims is struck out because it is fraudulent, there is no sanction. Fraudulent insurance claims are crimes without sanction or consequence. If someone goes into a shop, hops over the counter and takes money out of the till, there is a sanction. There will be a Garda investigation and perhaps a prosecution and conviction. However, someone can go into the same shop, intentional fall in the toilet, pretend to be hurt and go to court seeking compensation. If it is found that the claim was fraudulent and the claimant has committed perjury, there is no sanction. The case is struck out and the claimant walks out of the court. That has to be addressed because it adds a significant cost to insurance premiums and, therefore, businesses. This sometimes forces legitimate businesses to cut corners elsewhere because they have to pay rates, insurance and staff and other things suffer.
It is inherently wrong that law-abiding people are not supported by the apparatus of the State when people who try to scam them are not prosecuted by law agencies. That is profoundly unfair. The Taoiseach talks about wanting to represent people who get up early in the morning. Most people who take out car insurance and most businesses which have to take out public liability insurance, including farmers, hoteliers, shopkeepers and others, also have to get up and make a positive contribution to society and the economy. Nothing is done for them when they are victims of a fraudulent claim. Not only does this have a cost, but it also has a profound impact on individuals who are trying to pay their bills and staff and do what it is right in compliance with the law. They see this happening and the State offers them no support.
However, I assure the Minister that the day they cut a corner the long arm of the State will be very quickly extended to them. That issue must be addressed. Recently, probably due to the issue being highlighted, at long last we have seen an effort being made by the insurance companies to contest claims and unearth fraudulent claims and those who perjure themselves in court. That is welcome, but we must go a step further and introduce a sanction, whereby there would be a consequence if one intentionally perjured oneself by presenting fraudulent evidence.
The Minister accepted on Second Stage the Private Members’ Bill we published. As long as the legislation is introduced, I am not fussy about who takes responsibility for it, be it the Minister, the Department or this side of the House. The main point is that law-abiding citizens would see they had some support and protection from such criminals, because that is what they are. I hope the Civil Liability and Courts (Amendment) Bill which intends to amend section 26 of the Act will be brought before the committee. As it is a Private Members' Bill, I believe it is waiting for a money message from the powers that be to allow it to move forward. I urge the Minister to use her good offices to try to ensure that either she progresses the measure, which would be fine by me, or that it will be progressed by our side without the impediment of a money message being used to quash it.
Insurance is a noble concept, the purpose of which is to protect a person who is injured and that system must be protected. The PIAB is a good concept. We welcome the provisions included in the Bill that will strengthen it and encourage more people to go through the PIAB process. People must be obligated to at least co-operate with the PIAB when it is making assessments.
The book of quantum must be continually reviewed. In his report Mr. Justice Nicholas Kearns was scathing of the awards being made. High awards do have an impact. It is reasonable to make high awards to those who are legitimately injured, but it is unconscionable to make awards to those who are not injured and that happens every day of the week. That issue must be addressed. The PIAB will review the book of quantum on a continual basis. It should adjudicate on the awards it delivers by basing them on awards made in comparable jurisdictions, rather than using the highest court awards as the benchmark. If we consistently move towards the highest award, the high awards made by a court will become the benchmark for everybody. I presume the legal profession like high awards, given that 10% of a high award is better than 10% of a lower one. There is an inherent incentive for the system to support higher awards and for them to continue to increase. That issue must be addressed to ensure that when assessments are made of personal injuries, they are based on the norm in other jurisdictions, rather than what happens in the courts on a regular basis. I feel very strongly about that.
The PIAB had an impact when it was set up originally. What has happened over a period is that the legal profession has looked at ways of manoeuvring clients away from it and shepherding them back to the courts which provide more bountiful remuneration. Our obligation is not to fund the Four Courts indirectly through higher awards but to ensure people who are genuinely injured can seek fair compensation and those who try to seek compensation when they are not injured are punished.
I welcome and support the Bill. I thank the Department for its efforts at consultation and the fine drafting involved in the Bill and the fact that it also took on board some of our ideas in this era of new politics. We support that approach. I urge the Minister to consider our Private Members' Bill and allow us to move it forward or her to take ownership of it. I am not a covetous person. The Bill would send a strong message that scammers, fraudsters and criminals would be punished by the State when they tried to dip into the pockets of individuals and businesses through fraudulent claims.
I will probably only use five of the remaining six minutes as Deputy Kelleher has addressed many of the points we all want to make about insurance.
I welcome the Minister, Deputy Humphreys, back from China. She certainly did not come back on the slow boat because I saw a picture of her there recently and she is back here today. I think she had a successful trip. I say, "Well done," to her and all those who went with her from the agencies.
The Bill is another important step in dealing with a situation that has been out of control for many years. There has been much talk in Dáil Éireann and throughout the country about insurance claims and the payouts made. One might wonder sometimes why such a person was wearing a collar or how he or she got hurt and where the accident occurred. That said, I wish to be clear that I do not have a difficulty in looking after anybody who genuinely has an accident and his or her costs resulting from it. I am sure that is the case with most people.
We can talk again about the cost of motor insurance. Even this week I have heard from young people who have a full driving licence and not been involved in an accident, yet they are being asked for between €4,000 and €5,000. I mentioned in the House recently that my daughter who has a full licence and a good record had received an insurance quote for almost €6,000, which is horrible. I welcome the slight improvement in the position in recent months, but it is still an horrific scenario. It is a problem especially for young people, whom, as Deputy Kelleher said, have to travel long distances to work, as I do. Like me, the Minister comes from a rural constituency. I accept that it is not possible to have public transport in every area. As a result, for some people having a car is very important, especially young drivers. Many good things have happened in regard to road safety. Young people now have to undergo a rigorous programme in order to obtain a driving licence. That, in itself, should result in a reduction in the cost of insurance.
The Minister is also aware of the shockingly high cost of insurance for businesses. I refer, in particular, to the hospitality sector. There is a small country hotel in my town that does a lot of business and the annual insurance bill of which has increased to €50,000. A local family took it over some years ago. The hotel needed to be taken over and the family have made a fantastic success out of it. They are very hard workers and employ 26 people. Initially, when they took over the hotel, their public liability insurance bill was €12,500 and because it was a good thing to do, they decided to seek a reassessment. It was recommended that the cost of their public liability insurance be increased to €21,000 so as to provide a good level of cover. Four years later, that insurance bill has increased to €50,000. In the intervening four years there have only been two very small claims.
It really is a challenge for that family and for anyone in businesses like that. There is no need for me to tell the Minister this because she knows. Such businesses have to face these bills each year before taking in a penny. We can all say many people are going into these places and they are all doing well. We can increase the VAT rate again and so on, but the reality is there are vast bills to be paid behind the scenes. As Deputy Kelleher said, in many situations these bills now outstrip the cost of rates.
Section 9 deals with the book of quantum. This has been the subject of much discussion in recent years. It is now dawning on people that it is high time to look at the book of quantum. The fact that this will be reviewed every three years is a good thing. It is the bible used by the courts to award people money. Sometimes people think a judge decides on a given amount of money, but in reality he or she is looking at the book of quantum and make decisions based on it. It is good that the book will be updated at regular intervals. The book of quantum was first published in 2004. It was not updated for 12 years - until 2016. The fact that an update will be done every three years is good news. It will have a positive effect on the insurance business.
Information shows us in the courts some 12,000 cases are decided on annually and 60% of claimants accept the awards. It is incredible to think that there was an average increase in the cost of motor insurance of 66% between 2013 and 2016. Again, many questions have to be asked. Many questions are now being asked about the extraordinary level of increases. Certainly, some of this goes back to claims being made.
We are moving forward and things are moving in the right direction. This has to happen because it is a major crisis. The public have been talking about this for far too long. Like Deputy Kelleher, I welcome the Bill. I hope we can move things on swiftly and make real changes because Irish society is calling for this to change once and for all.
I acknowledge the work of the Minister in bringing forward this Bill. It is important to change how the Personal Injuries Assessment Board works. As I see it, this is an initial step in addressing the escalating insurance costs that are hurting motorists, business owners and community groups throughout the State.
Unfortunately little action has been taken by the Government to date to address scandalous insurance costs in Ireland. People and businesses are not seeing any difference in their ridiculously high premiums.
I refer to a comment Deputy Kelleher made in support of his plea for the Minister to accept his Bill or bring forward another Bill to deal with the issue of when people have gone to court, blatantly lied and perjured themselves and made up stories that have clearly be proven to be not true. When these cases are rejected and chucked out of court, those responsible should be automatically referred to the Director of Public Prosecutions and action should be taken against them. All of us are paying for the outcome of such conduct. Recently, I saw a clip of an incident. A woman went into a shop. She poured water on the ground and then left the shop. Then, a person went in after her. Then, suddenly the woman came back in and the second person fell on the water. The woman was the witness to the person falling on the water that she had poured on the ground. I understand the injury claim was subsequently rejected but no further action was taken. We need some action in such situations. This fraud needs to be tackled.
I am aware that the Government has set up the cost of insurance working group. Some of the recommendations of the working group are contained in the Bill. However, the working group is simply not enough. Businesses throughout Ireland are being bled dry by outrageous premiums that jump year-on-year regardless of whether a claim is made. I constantly hear from business owners and their representatives bodies about how insurance costs are threatening their existence and growth. Unfortunately no answers are available to customers from insurance companies on why their premiums are so high and no justifications are given for the extraordinary increases to which they are subjected.
Young motorists can face extraordinary premiums that can result in their being kept off the road. They cannot afford to pay €4,000 or €5,000 per year in premiums. This is particularly difficult for younger people in rural areas where there is no alternative source of transport. It is a major problem for these people to get to work or college. This needs to be addressed.
Insurance companies hold a special place in the Irish market as it is a legal requirement for motorists and businesses to purchase their services. This guaranteed business is of great benefit to the profits of these companies. It should, therefore, come with some additional oversight. Far more work needs to be done by the Government to challenge this industry and make the operations more transparent to ensure Irish consumers are protected. Perhaps the Minister can outline what other actions the Government will take with insurance companies directly. Although this Bill is one step, it is a small one. Far more needs to be done to really tackle this problem.
The Bill seeks to introduce changes to how the Personal Injuries Assessment Board operates. The body was set up with the intention of taking a certain portion of claims out of the court system, and to make the cost of claims cheaper as a result. The reality is that consumers are not seeing these saving in their premiums.
The Bill contains a number of recommendations arising from the cost of insurance working group, including cases of non-co-operation such as non-attendance at medical examinations, refusal to provide details of special damages and reviewing the book of quantum.
I welcome the spirit of the Bill and what it seeks to do. However, I wish to highlight some concerns. If the Minister could address some of these concerns and questions I would be most appreciative. Section 8 deals with a situation where assessors have requested further information or documentation from the claimant and have requested that the claimant submit himself or herself for a medical examination. If the claimant fails to present himself or herself for a medical examination, the court may make an adverse costs award in respect of the offending party. I understand the rationale behind this. The idea is to try to get maximum co-operation of claimants to make the process easier and quicker. My question relates to the possible constitutional issues arising from forcing someone to undergo a medical examination and any consequent refusal having an adverse financial impact on the person. Has this particular issue been examined by the Department?
Sinn Féin has a problem with and an objection to section 11. The section seeks to change the composition of the Personal Injuries Assessment Board. As it stands, two members of the board are nominated by Irish Congress of Trade Unions while one person is nominated by IBEC and one person by the Irish Insurance Federation or any successor of it. The proposed change would remove the power of ICTU to nominate two people to the board and replace it with one nomination from Insurance Ireland and one nomination from the Central Bank. Sinn Féin will not support this section. We will bring forward an amendment on Committee Stage to ensure the Irish Congress of Trade Unions retains its nominations to the Personal Injuries Assessment Board. I would appreciate if the Minister could explain why the Government wishes to take these nominations away from ICTU but not from the insurance industry, for example.
I have another question relating to section 13. Why exactly is there a need for an amendment to the principal Act to give the Minister for Business, Enterprise and Innovation powers to take money back from the Personal Injuries Assessment Board? How much money does the PIAB currently have in reserve? How much does the Minister intend to take back? What is the rationale for this change?
I thank the Minister for bringing forward the Bill. We intend to bring forward a couple of amendments on Committee Stage, as I have mentioned. I hope this is a start of a wave of action from the Government that will include challenging the insurance industry directly. The ultimate aim that we all seek is for lower premiums to be delivered for Irish consumers, businesses, community groups and other who must get insurance cover.
I welcome the opportunity to make a short contribution to this legislation. I support what the Bill purports to do.
I wish to acknowledge and put on record that this is the second tranche of legislation in recent times dealing with the issue around the cost of insurance. The Central Bank (National Claims Information Database) Bill was before the House during the past month. I do not want to look at this as stand-alone legislation. It is part of a programme and I need to acknowledge that.
I have no wish to sound too critical of the Government, yet when I spoke in the House some weeks ago, the Minister reminded me that the 2017 CSO figures showed a reduction in motor insurance of 11%. The Minister was quite right to say that.
I did not have the exact figures with me at the time, but I will allude to them. The annual rate of motor insurance increased by 11.6% in 2014 and by over 30% in 2015. These are significant increases. I mention this because it shows how long we have had to deal with this matter. The issue was identifiable in 2014 and 2015 and it is only now we are beginning to come to terms with it.
In looking at this legislation I was conscious that when I was elected in 2002, insurance costs, specifically motor insurance costs, were at very high levels. A candidate in my constituency ran on the sole issue of motor insurance costs and secured more than 1,000 first preference votes. I will not give the Minister a history lesson, but if I am not mistaken, the Personal Injuries Assessment Board, PIAB, legislation was passed in 2003 and became operational in 2004. The PIAB was set up and established within a couple of years of that and in its early years, as a result of the manner in which it was set up and the number of claims it settled, we saw significant reductions in the cost of insurance. My memory of the 2002 election is that we saw the impact of PIAB within two or three years. I referred to the rates of increase in insurance costs in 2014 and 2015, in particular, the latter when the cost of motor insurance increased by more than 30%. It has taken us a good number of years to get to the stage of bringing forward legislative proposals to reduce costs.
The Minister heard the contribution made by Deputy Kelleher who will work collaboratively with her to ensure all Stages are passed and the legislation is implemented. That is the challenge. It is important that we are somewhat timely in doing so.
The costs associated with claims are preventing premiums from being reduced. Claims for whiplash were mentioned, in particular, the awards for whiplash in Ireland versus those in the United Kingdom. Awards here are four or five times the typical payment for whiplash in the United Kingdom. PIAB figures show whiplash awards average approximately €20,000 per person. I was not surprised by that figure because reading over my notes, I realised that a year and a half ago, in April 2017, Charlie Taylor wrote in an article in The Irish Times that the average award was €15,000. He also noted that motorists here could save €150 a year in insurance costs if our awards were reduced to the European or UK average. This problem has been around a long time. I am glad the legislation is before the House. I am conscious that it seems to have taken a long time to get it here, and I hope we can conclude it quickly.
Deputy Kelleher spoke about the cost of fraud. As he stated, many recent cases have been thrown out of court and there is little or no sanction for those who make claims that are not upheld. That cost is incurred by insurance companies. Separate from cases getting as far as the courts in the first place, I understand insurance companies spend significant amounts of money validating claims and having investigators examine them to ensure they are not fraudulent. The cost of fraudulent claims is significant and, ultimately, that is reflected in the premiums we all pay.
Deputy Eugene Murphy spoke about the cost of insurance for young drivers. Other speakers mentioned the cost of insurance for young drivers in rural Ireland. As the father of a young driver, I can say insurance for young drivers is very expensive and they also find it very difficult to even get a quote. There are major challenges in that regard. The Minister might say I am not living in rural Ireland and my son does not need a car. While many young people do not need a car, it is important that they can drive, particularly in terms of future career prospects. If they learn to drive at a younger age, it comes easier to them. The cost of insurance for younger drivers is a significant issue.
The Minister mentioned people engaging with independent medical examiners. That is very important. We need to understand fully the reason our payouts, in particular for soft tissue injuries, are so much higher than those in other jurisdictions. We are all paying for this and independent medical examinations are required very early in the process. I have spoken to people who have suffered injuries and they say the injury endures for a significant period. However, medical examinations should be carried out during that period to determine the real or perceived extent of the injury.
The book of quantum plays a key role and sets the bar. As Deputy Kelleher rightly stated, it needs to be more than a reflection of court payments. It needs to reflect payments in similar jurisdictions where the cost of living is similar to the cost of living here, rather than jurisdictions that are radically different from ours. I do not understand the reason for the difference in payouts in this jurisdiction, which are multiples of those made in the UK. That is the case in certain payouts, and it is not appropriate. The book of quantum needs to reflect more than just what the courts award.
I mentioned fraud. Legislation must be enacted quickly to deal with people who commit fraud, which is currently a crime without sanction. Fraudulent claimants walk away as if they had done nothing wrong, whereas they have created significant costs. Such cases should not reach court. If fraud is identified anywhere in the process, from the time the claim is made, a sanction or charge has to be imposed on the person because such claimants create costs for the insurance companies.
While this side of the House is supportive of the Bill, we would be more supportive if the Minister were to advance and conclude the legislation more quickly.
I am glad to have the opportunity to contribute to the debate on this Bill. I will declare my interest. I am a barrister who represents people injured as a result of negligent acts by other people. One would think those unfortunate beings were the only people who contributed to the increase in the cost of insurance. Let me be clear. People are entitled to recover compensation when they are injured, be it in terms of public liability, motor insurance or employer's liability.
I have three daughters for whom the cost of insurance is an issue. The cost of claims and everything else are also issues. However, in that context the PIAB has contributed to a reduction in the cost of claims. It has provided a fast and inexpensive way of resolving claims for personal injuries where liability is not disputed. However, we must not forget that there are other contributors to the cost of claims. The blame for the increase in the cost of insurance seems to be laid on the backs of people making claims. In terms of value and costs, it might be a component part but there is not a word about the conduct of insurance companies. Have we all forgotten the losses that arose from the way some of the insurance companies conducted their business? Many levies are being imposed as a result of this conduct. I would like to know if anybody has determined how much we pay in levies. We are still paying a levy as a result of what happened to the PMPA, Quinn Insurance and, in recent months, Setanta Insurance. Nobody ever mentions these levies on our insurance policies.
We should be fair and honest and put everything on the table, including how much the levies cost.
They are certainly significant and some of them have been going on for many years. Let us be clear about that.
Of course, insurance companies are engaged in a race to the bottom. I remember people getting vans insured for €250 or €300. That was never possible. What happened? Some of those providers went out of business and other people were left carrying the can. Insurance firms were competing against low prices that attracted customers, but now somebody else has to resolve the situation. In July the Minister of State, Deputy D'Arcy, put through a Bill to compensate people affected by Setanta Insurance. Let us put everything on the table. A very one-sided view of life is being taken. The insurance companies are certainly winning the PR war. Everybody has bought into their propaganda, but I do not. As somebody who acts in the area, I can attest that insurance companies are not soft touches.
I agree with Deputy Kelleher on the need to root out fraudulent or exaggerated claims. They have no place in this. However, there are penalties for them. Under section 26 of the 2004 Act, where there is an exaggerated or fraudulent claim, the court has power to refer the matter to the Director of Public Prosecutions. The courts are independent. Some Deputies seem to want to take over the role of judges. Is that what is going on? We are very precious in this House about ensuring nobody trespasses in here. The Judiciary is also independent in its functions, rightly so. Having three daughters in their 20s I am all in favour of cheap insurance for young people, but let us have all the facts on the table and let us be clear. Those penalties are in place. They are always a threat. Applications are made and cases are rightly dismissed. In recent months, many cases have been quite properly dismissed. That is a matter for the courts. Once the courts make that determination that is the end of it.
Let us be clear on a few things. I know all about the Personal Injuries Assessment Board, PIAB, application. An applicant sends off the form and his or her medical reports. It would be a very foolish client who did not send his or her medical reports in, because nothing happens without them. The big problem is at the other end, with the respondent, who could be an employer, an insurance company in the case of a car accident, or anyone involved in a public liability case. If they do not submit a medical report, things become bogged down. I support this measure, which provides for a penalty to be applied if somebody does not take a step.
The Minister knows the law. She did not say that is mandatory. That is a matter to be taken into account by the courts. We cannot trespass on the independent domain of the court. I will always uphold that because I have no right to do otherwise. It is constitutionally guaranteed. Someone may start shouting, saying the Minister did not go far enough and it should be a €500 or €10,000 penalty. We cannot do that. The Supreme Court rightly laid down the law in the 1960s. We can go as far as laying out the policy and legal framework and the courts must interpret that.
Of course, certain types of injuries are excluded. If someone has a wholly or mainly psychological injury, no assessor is in a position to make a determination on it. It would almost have to be determined by oral evidence from the individual concerned and from medical people. As such that is rightly excluded. How could an assessment be made of a psychological or psychiatric issue just by reading two reports without seeing the claimant, thereby deciding the claim is worth €10,000 or €15,000? It does not work like that. The big claims are for medical negligence, and that is also excluded under the old Act. A significant cohort of claims fall outside it. Moreover, it only operates when liability is admitted. There are nine months in which to make a determination. When the award is issued, both sides have 30 days to accept it or reject it. If one side rejects it a certificate of authorisation issues. I believe section 50 comes into play.
I support fully the Bill. I want to see costs curtailed. I have no problem with that. However, it is about time we took account of the levies we carry from insurance companies. Their part in the costs should not be forgotten. I can guarantee that they account for between €50 and €100 of the cost of a policy. That is significant.
I refer to the book of quantum. I agree with Deputy Kelleher and the Minister on this. I have no problem with reviewing that every three years. I am not a solicitor, but most solicitors advise that if the figure offered is in close proximity to the book of quantum a claimant would be foolish to go to court. The award listed in the book of quantum acts as a level. Let us say a claimant is awarded €20,000. That award is not the walk in the park that people say it is. The book of quantum's listed award is used as a tender by the insurance company. If the claimant gets €19,900 in court the tender has not been met, so the claimant has to pay not only his or her own costs but also those of the other side. There is, therefore, an added incentive to accept awards in line with the book of quantum. I forget the number of claims, but more than 100,000 must have been processed since PIAB was established. The number must be 150,000. Those things are all important.
Let us root out fraudulent claims. Many insurance companies have recruited ex-gardaí and former detectives and are thankfully getting to the bottom of them. That is important. I support that every step of the way but I want a full picture, not just a selective one. I have met people who have suffered whiplash injuries and had their claims dealt with 15 years ago. They are undergoing physiotherapy to this day. That is whiplash, the supposed Mickey Mouse injury that a lot of people talk about. It is all right if someone is ready for an accident and set up for it, but it is different if something happens unexpectedly. A whole thesis has been written on this.
Compare Ireland with any other jurisdiction. Thankfully, we have a written constitution. Other jurisdictions have laws that can be changed, and people's rights diminished, at the stroke of a pen. Thankfully, that cannot be done in this country. Long live our Constitution. If we want to amend it we can do so, but it is the people who amend it, not any individual, group or lobby.
Very often things are slanted in favour of insurance companies at various stages of the process. There was a big issue here which the Minister has moved to deal with. I forget what section this concerns. I refer to the Statute of Limitations. That is of major significance. I will use as an example my friend, Deputy Broughan, who arrived here on the same day as me. Let us say Broughan Limited was in charge of the place where I suffered an injury and I sued the company and it turned out the company was really Broughan and Kelleher Limited and I only found out after initiating the claim and did not name them in time. I might wish to name Broughan and Kelleher but my two years have elapsed and my claim is terminated.
Let us say my legs were broken and I suffered with my back, but the two-year period was up under the Statute of Limitations. It was a big issue which was put before the Supreme Court in the Renehan case in 2015. The Supreme Court stated it was an injustice, but the argument was about whether the extended time period applied to Broughan or Broughan and Kelleher. The Minister is now saying it does not apply to Broughan but that it does apply to Broughan and Kelleher because one has only found out, which is fair. That is adopting section 2 of Statute of Limitations (Amendment) Act 1991 where one discovers or reasonably ought to have discovered. If one only discovers at the end of the process, one should not be penalised and the dis-application rule should apply in that context. I say, "Well done," to the Minister and her officials because it was perpetrating an injustice. That is an important point.
The preliminary notice to the person against whom liability is alleged but where the application is not accompanied by a medical report is only fair. How would one issue it, if there was no medical report? It is an important point.
I will not speak about electronic documents. I am not a supporter of them because I always like to see the bit of paper in a person's hand. That is just me, but so be it.
Section 7 amends the Statute of Limitations, while section 8 deals with the cost of proceedings where a claimant or respondent does not comply with a request of the assessors. It merely empowers the courts in that regard.
Deputy Kelleher's colleague, Deputy Michael McGrath, Fianna Fáil's finance spokesperson, will be happy to see the amendment to section 54 of the principal Act to provide that the board shall review and update the book of quantum every three years, or sooner if it is deemed necessary.
I note that section 10 extends the powers of the board to compel persons and bodies to provide information and documents. The board will then be in a position to obtain information from any person or body for the purpose of preparing the book of quantum. That is amazing, as Deputy Kelleher would agree. It should be forthcoming from every insurance company as it is in their interests to provide it. There should be no need for anyone to travel around the world looking for it. It should be stating, for instance, "You are wrong. Instead of €20,000, it should be €14,000." Let us get that information. It appears - perhaps I am misreading it - that obtaining such documents is the thrust of the amendment. In other words, the board would have to force me to furnish the information, which is mind-boggling. What do the companies have to hide? Perhaps it is their profits.
Ms Dorothea Dowling was instrumental in the setting up of the PIAB. I read some good articles by her lately in which she disputed some of the assertions being made by insurance companies. She was the person who was instrumental in and right at the heart of this process. As far as I can recall, Frank Fahey, then Minister of State at the then Department of Enterprise, Trade and Employment, introduced it in 2003. As I said, Ms Dowling has disputed some of the assertions made. I read her good, elucidating articles in the Irish Independent, in which she sometimes writes in the motoring section. They were well thought out. She takes issue, as I do, with some of the assertions made by insurance companies. It is time to drill down into their profits. Let us see if there is excessive profit-taking. Why did the Competition and Consumer Protection Commission have to enter their premises a while back to examine and take papers? Let us be clear on a few matters. It is not all one way. If we were to root out all of those involved, there is only a small cohort.
There are many people who have suffered genuine injuries and they are entitled to compensation. I will always stand with them. One might say it is self-interest, but it is not. I have also acted for insurance companies. Let us be clear: as a barrister, I could be with you today and against you tomorrow. That is the nature of the business. We are objective. In that regard, I always champion the rights of people to be properly compensated.
I note the powers of IBEC and ICTU to nominate members of the board. I suppose it is a sop to that great other Minister, Deputy Ross. He will be happy to see it because it will allow the Public Appointments Service system to make sure. I have no issue with that either. My party will support whatever has to be done.
The maximum period of service on the board will be ten years. That is also fair enough because we all go stale. However, the Minister, Deputy Humphreys, will never go stale because she is as fresh in representing the people of County Monaghan as she was on the first day, but some of us do go stale.
I note that the Minister cannot go the full way on a number of the issues raised in the original report on which the Bill is based. She cannot go the full way on some of them because they may well border on being unconstitutional. Commentators might ask why the Minister did not do this or that, but I understand clearly why she could not do so. The working group on the cost of insurance made several recommendations, but the Minister had to sieve them out. The Attorney General and his office had a detailed look at them. As a matter of fact, when I saw some of them initially, I was taken aback and figured that they would not see the light of day in the legislation and they have not because the Minister's function is to bring forward legislation that is constitutional. She has reached that threshold.
The Labour Party strongly supports the Bill. I merely state there are two sides to every story. The Judiciary is working hard to root out anybody who is undeserving or tries to milk the system, engage in the making of fraudulent or exaggerated claims. We all want that to happen. As there is already the power to do so, let us get on with it. For those who are genuinely injured, let us not always make them the villains of the piece.
I am glad that my old friend and colleague, Deputy Penrose, is not the barrister in court prosecuting a case against one of the companies of which I am a director. They are all community companies.
I am delighted to be able to speak briefly to the Personal Injuries Assessment Board (Amendment) (No. 2) Bill 2018. It is an important Bill. Personal injury claims and insurance costs are matters that are brought up by constituents virtually every week.
Recent reports show, as many Deputies have said, that the average award for whiplash is €20,000 and that such cases account for the vast majority of claims through the Personal Injuries Assessment Board. The 71% in the first half of 2018 was 71%. It was the Personal Injuries Commission, under Mr. Justice Nicholas Kearns, that originally informed us that compensation awards for soft-tissue damage were four and a half times the level in the United Kingdom. That is an extraordinary difference, given the close connections between the two economies, about which we are also worried in the context of Brexit. It also highlights the urgent need for a review of the book of quantum. It is extraordinary that in 2003 we did not make provision in legislation for regular reviews. The average compensation award in Ireland for soft tissue damage is now over €17,000, compared to just €3,984 in the United Kingdom based on the figures for the period between 2015 and 2017. That is a considerable difference and extraordinary. govem that the two societies are similar.
The Bill has been a long time coming and follows the cost of insurance working group's report on the cost of motor insurance in January 2017. It seemed, following Deputy Michael McGrath's Bill last summer, that the Government finally had to take action.
The working group was established following the skyrocketing motor insurance premiums that had caused consternation and outrage among the people who send us to this House. Many of us would have preferred a more radical solution. In particular and notwithstanding the comments of Deputy Penrose, we might look at the position in New Zealand which was in first place in the world in regard to the ease of doing business and also had the accident compensation scheme which essentially abolished the notion of fault-based liability for accidental injury that still applies in the PIAB and the court system in Ireland today.
The Bill amends the Personal Injuries Assessment Board Acts 2003 and 2007 and strengthens the remit of the PIAB. The working group recommended in recommendation No. 15 of the PIAB legislation review that “cases of non-cooperation such as non-attendance at medicals and refusal to provide details of special damages” be assessed. It also recommended in recommendation No. 19 that the “frequency of future Book of Quantum updates in terms of any future changes to its production” be examined. There was also a public consultation process on all of the matters before us.
The Bill, rightly, strengthens the provisions to attend medicals by effectively making the process mandatory. Recommendation No. 15 of the working group's report is addressed by section 2, whereby the 2003 Act is amended in order that a fee and medical report must be received by the PIAB before a formal notification is issued. A preliminary notification may be sent in cases where the fee or medical report has not been sent to the PIAB. Issues surrounding lack of clarity and the Statute of Limitations will be addressed by section 7.
The key section is section 8 which provides for an amendment to section 51 of the principal Act by the insertion of a new section 51C to deal with cases of non-compliance with a request by the board under section 23 or 24 of the principal Act. Where a claimant fails to supply details of his or her claim for special damages, fails to attend a medical examination arranged by the PIAB or fails to co-operate with retained experts, the board must carry out the assessment. If the claimant rejects this assessment, the board must release the case and issue authorisation to enable the claimant to proceed to court.
The key sanction contained in section 8 seems to be the constraints on subsequent legal costs, whereby the court will have discretion to make an order for the costs it will allow the claimant. Section 8 seems to closely follow the proposals in section 3 of the Personal Injuries Assessment Board (Amendment) Bill 2018 introduced by Deputy Michael McGrath. In the case of personal injury claims, a claimant must bring a case to court within two years. Deputy Penrose referred to the famous Renehan case, where an issue arose when a new respondent was added to the case who argued that the limitation period had elapsed and, therefore, the claim was statute barred.
A very welcome provision is section 9, whereby the PIAB will have to publish an updated version of the book of quantum every three years.
The PIAB was established under the 2003 Act in order to address the number of claims going through the courts system and the high awards being granted. Around that time, insurance premiums were increasing rapidly and the companies blamed expensive court cases and the litigation process. However, since the establishment of the PIAB, insurance premiums have remained stubbornly high. Hence, the continuous concern in this House and at the finance committee, which did a lot of work on this issue in the last Dáil, that the cost of insurance remains a serious burden on small businesses, schools, clubs and community development bodies and every household and citizen.
I commend Deputy Michael McGrath of Fianna Fáil who introduced the Personal Injuries Assessment Board (Amendment) Bill 2018 last June, a key reform measure we were happy to study and which is reflected in the Bill before us. Deputy Michael McGrath's Bill sought to address the issue of some claimants using the PIAB simply as a rubber stamp on their way to the courts. His Bill put an onus on a court hearing a personal injuries case to have regard to the failure of claimants and respondents to attend a medical examination. The Bill before us approaches the consequences of that failure in a similar way.
Since its establishment, the PIAB must issue an authorisation before a claim can proceed to court, but premiums remain very high. This is something we have heard time and again in this House and at the finance committee and it is echoed in the figures. In 2017 there were over 33,000 applications to the PIAB and 12,500 awards, a reduction on the figure for t he previous year. The value of awards in 2017 was €315 million, while the average time to process claims and awards is reported to have been 7.3 months. The highest award in 2017 was over €600,000 and there were 105 awards of more than €100,000, although the majority of awards were under €20,000. The number of claims seems to follow population, with one third of claims in Dublin, 9.6% in Cork and 4% in counties Meath and Louth.
Many of us, including Deputy Penrose, have raised the cost of litigation. When replying to me during Leaders' Questions recently on another matter, the Taoiseach told me that we were very litigious people, which we certainly are. It is a consistent issue. The excellent Oireachtas Library and Research Service staff have provided a very good briefing on the Bill, as they do on all key legislation. They highlighted that the former Minister of State and Deputy for Galway West, Frank Fahey, had said in the past that litigation costs added 40% to the cost of compensation. The figure is now over 42%, which is unacceptable. When the PIAB was set up in 2003, it was hoped we would have a speedy means of finalising genuine personal injury claims, rather than going through this expensive litigation system.
The review of the book of quantum is welcome. It reminds us again of the major differences with the United Kingdom. I see that departmental officials are present. Has the Department durng the years studied the situation in Northern Ireland and Britain to find out how its less costly awards are arrived at? I know that there is a discount rate which is used to assess the cost of future loss. That rate is based on the Ogden tables, actuarial tables that examine cost in future years, for example, for somebody who has suffered a life changing injury. Deputy Penrose referred to cases of this type in which he has represented citizens in the courts. Will the Department keep this matter under review as we move forward with the new legislation, given that it could look to Britain as an example? Perhaps we might llook, once and for all, at the New Zealand system and see if the House has the courage to go straight to that system. In any case, the procedure in the United Kingdom seems to be ahead of ours.
Deputy Penrose also referred to the independence of judges. This issue has arisen many times in the House, for example, in the context of traffic law, for which the Ministers, Deputies Ross and Flanagan, are responsible. In a recent speech the Chief Justice, Mr. Justice Frank Clarke, called on us to look at the impact the legislation we were passing would have on future litigation, in other words, whether legislation would almost provoke future litigation. I questioned the Minister, Deputy Flanagan, on the matter. To reply to the Chief Justice with the reply I received, the Minister said that, as we now engage in pre-legislative scrutiny, there was constant scrutiny of the issue. We could use the vast experience of the Judiciary, led by the Chief Justice, to understand what exactly happens in the courts, why the book of quantum seems so high and why so much money is spent on litigation. This is another issue that might be addressed in the future.
It is disappointing that recommendation No.16 of the cost of insurance working group is not addressed in this Bill and that we must await further legislation in this regard. The Minister will be aware that recommendation No. 16 provides that we ascertain and set out the measures necessary to implement pre-action protocols for personal injury cases. I note there has been some criticism in the media regarding the financial reserves of the PIAB, which at the time of receipt of the report in August totalled approximately €17 million, being remitted to the Exchequer. To most of us in this House it is obvious that this should be the case because the surplus reserves of the PIAB are the people's money. As there is no legislative basis for this to happen, it is provided for in section 13 of the Bill.
I welcome the Bill. It is an important step forward. I again commend Deputy Michael McGrath on providing us with the formula to make progress on this issue and Deputy Kelleher on his work which means we will have a speedier and less costly process in future. Essentially, this is a move towards reducing the heavy burden insurance costs place on businesses and households.
I thank Deputies for their contributions and welcome the general expressions of support for the objectives of the Bill.
Deputies Kelleher and Eugene Murphy referred to the book of quantum. At the time of publication of the Bill, the second and final report of the Personal Injuries Commission had not been published. This report was subsequently published on 18 September and its key recommendation is that the judicial council, when established, be requested by the Minister for Justice and Equality, Deputy Flanagan, to compile guidelines for appropriate general damages for various types of personal injury. When judicial guidelines are in place, it is intended that they will supersede the book of quantum. The intention for the future is that the judicial council will take ownership of the judicial guidelines for personal injury compensation. The Personal Injuries Commission notes in its most recent report that the development of the judicial guidance follows best international practice and will lead to faster resolution of claims, as well as greater consistency of awards, which is critical to improving the claims environment. This issue was also raised by Deputy Broughan. The Bill providing for the establishment of the judicial council is a legislative priority for the Government. The intention is to make significant progress towards the enactment of the Bill by the end of this year.
On the PIAB recalibrating the book of quantum, Deputy Kelleher made reference to using international comparisons when revising the book of quantum and the levels of damages for the various injury types contained in the book. This is not possible as there is no legal basis or mechanism for the PIAB to do this. Ultimately, levels of damages are set by the courts and this influences the levels of compensation paid throughout the system. Precedents set by the courts are followed by the PIAB and the insurance sector. As I said, the key recommendation is that the judicial council, when established, be requested by the Minister for Justice and Equality to compile guidelines for appropriate general damages for various types of personal injury.
Deputies Kelleher and Quinlivan referred to fraudulent or exaggerated claims. The PIAB does not investigate fraudulent or exaggerated claims. The purpose of the PIAB is to independently assess claims for compensation arising from personal injuries sustained as a result of a motor, workplace or public liability accident and where both parties - claimant and respondent - consent to an assessment. The investigation of fraudulent or exaggerated claims is a matter for the insurance companies involved and An Garda Síochána. As stated by Deputy Penrose, there is legislation covering fraudulent claims. I agree with Deputies Kelleher and Quinlivan that there has been an acceleration in fraudulent claims in recent years and that this is a matter of concern to business owners. I know of a business owner who had three claims from one family in one week. This type of practice has to be dealt with.
On the cost of insurance working group, CIWG, and motor insurance costs, recommendation 26 recommends exploring the potential for further co-operation between the insurance sector and An Garda Síochána in regard to insurance fraud investigation. The second and final report of the Personal Injuries Commission supports the CIWG's recommendation and recommends the establishment of a Garda fraud investigation unit. I am aware that discussions are ongoing with my colleague, the Minister for Justice and Equality, and the Garda Commissioner in that regard.
Deputy Kelleher referred to his Private Members' Bill, the Civil Liability and Courts (Amendment) Bill 2018, which is a matter for consideration by my colleague, the Minister for Justice and Equality. Deputy Quinlivan spoke about the composition of the board of PIAB. In line with Government policy to have more board members appointed through the Public Appointments Service, PAS, section 11 removes ICTU and IBEC as bodies designated under the Act to nominate members to the board. It will be open to ICTU or IBEC to apply through the PAS process when vacancies arise. Seeking expressions of interest for board appointments through the PAS process allows for appointments to be made from a greater number of potential candidates with the desired skill sets, which can vary over time depending on the skills available to the board.
Deputy Quinlivan also raised the issue of reserves. Section 13 provides for a reserves policy for the PIAB. It also provides that the PIAB shall remit to the Minister, for the benefit of the Exchequer, any moneys in excess of those authorised to be retained by the Minister, with the consent of the Minister for Public Expenditure and Reform. The purpose of this section is to implement a recommendation of the Comptroller and Auditor General, received in 2017, that appropriate legislation should be introduced to deal with the excess funds held by the PIAB. Legal advice obtained by the Department is to the effect that legislative change is required to enable the board to remit excess moneys to the Exchequer. The Bill specifically provides that the Minister will have regard to the operational, capital and contingency costs of the PIAB when determining the sum to be retained. This means that sufficient funding will continue to be available to the PIAB to carry out its statutory functions.
Deputies also raised the issue of medical assessments and constitutional rights. The independent medical examination is an important part of the board's assessment process. These examinations are required to obtain an up-to-date prognosis on a claimant. Each claimant, when making a claim to the PIAB, must submit a medical assessment form from his or her treating practitioner. This should provide details of the injuries sustained and the treatment provided at the time of the injury. However, medical reports received from the claimant's treating doctors and submitted with the application form often involve an examination of the claimant too soon after the accident for a recovery to have occurred or for the doctor to advise when recovery would be expected. Therefore, an independent medical examination is arranged with a doctor of the appropriate specialty from the PIAB's independent medical panel. The Bill was drafted in consultation with the Office of the Attorney General. It is important it operates within the Constitution and that we do not remove from people their constitutional right to go through the courts system.
I again thank Deputies for their contributions. I look forward to working with them as I bring this practical and important legislation through its next Stages.