Dáil debates

Tuesday, 16 April 2019

Civil Liability and Courts (Amendment) Bill 2019: Second Stage [Private Members]

 

8:45 pm

Photo of Barry CowenBarry Cowen (Offaly, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I move: "That the Bill be now read a Second Time."

I am happy to speak on this Bill this evening. Contrary to what the Taoiseach has espoused, this Bill forms part of a series of constructive measures put forward by Fianna Fáil to tackle the high insurance costs businesses and individuals are facing throughout the country. We debated a Fianna Fáil motion on business insurance here some weeks ago and some play and leisure centre owners came to witness it. Those owners are on the brink. People running businesses do not have the time to turn up here to view a debate on insurance, but these people are now desperate and on a cliff edge.

We now hear almost weekly of businesses going to the wall because of the excessive cost of insurance. The rises reported are astronomical. The owner of a play centre in Navan, County Meath, Ms Linda Murray, has highlighted her experience. She was quoted €2,500 for insurance in 2012 but last year her quote was a staggering €18,500, which is an increase of 640%. As bad that was, worse was to follow for Ms Murray. She cannot get a quote at all this year so she faces two stark options. She will have to self-insure or cease trading. Ms Murray's business is not alone in this regard.

Businesses throughout the country are being put under enormous pressure. Many are choosing to self-insure but we are not certain of the overall number. It is highly risky and, of course, leaves a potential claimant in the lurch if a serious accident occurs. This is not a sustainable solution to the problem but businesses are being forced to choose between this and simply closing. It is not just and it is not right. These are hard-working people running businesses we all cherish and rely on. While we are talking about play centres closing today, we could be talking about childcare facilities closing tomorrow. The cost and availability of childcare is already in a dire state of affairs. There are not nearly enough childcare facilities. We will spend millions of euro of taxpayers' money in the coming years to make childcare more accessible and affordable for more parents. I fear those funds will be wasted if we do not see insurance reform.

The reform that is happening is too slow. We are still waiting for a national claims information database which was to be up and running in June 2018. We are still waiting for a system that will compel insurance companies to inform policyholders of claims made against them. We are still waiting for a judicial council to be established to tackle the level of personal injury awards. We are also still waiting for a publicly funded insurance fraud unit in An Garda Síochána and we are still waiting for an integrated insurance fraud database. Who knows when these endeavours will be done?

Investigations on potential anti-competitive behaviour are all the while ongoing in the European Commission and in the Competition and Consumer Protection Commission. The Government, unfortunately, has completely turned its back on the insurance problem and left small businesses to fend for themselves. Insurance fraud is among the many reasons insurance costs are shooting up. It is certainly not the only reason but it is a substantial one. Insurance fraud costs us all, and those known to have made a fraudulent claim should suffer the consequences.

Approximately two weeks ago representatives of Alliance for Insurance Reform appeared before the finance committee when Mr. Peter Boland quoted a member of the public who had attended one of its meetings. The quote sums up the entire problem of insurance fraud. The person in question said:

If I had a need for big money and I had a choice between robbing a bank and faking an injury, I'd pick the fake injury every day. More money and no consequences if I'm found out.

There appears to be no downside to bringing a fraudulent claim. While there have been cases of claims being thrown out, there has been no follow-up or penalty. There appears to be no cost or consequence for engaging in this practice. While the majority of claimants act in good faith, a minority bring fraudulent claims to court in the hope they will receive large awards in the tens or hundreds of thousands of euro. That is simply wrong. If someone was to simply rob money from a bank, the book would be thrown at him or her if he or she were caught. However, when someone makes a fraudulent claim in court and is found out, nothing happens. There is no prison sentence or fine and there is no recognition of the significant costs incurred by those who must defend the claim.

The Bill aims to get tough on insurance fraudsters. If it is enacted, the cost of bringing an insurance claim will be significantly increased. Section 26 of the Civil Liability and Courts Act 2004 sets out what constitutes insurance fraud. It provides that if a plaintiff or claimant in a personal injuries action gives or adduces, or dishonestly causes to be given or adduced, evidence that is false or misleading, in any material respect, and he or she knows it to be false or misleading, the court shall dismiss the action. The section further provides that if a person has sworn an affidavit that is false or misleading in any material respect and that he or she knew it to be false or misleading when swearing it, the court shall dismiss the plaintiff's action. Section 26(3) provides that, for the purposes of the section, an act is done dishonestly by a person if he or she does the act with the intention of misleading the court. The definition in the section is tight and serves its purpose well. If someone stands up in court and intentionally misleads it, it shall be deemed a fraudulent act. However, the only thing the court can do under the Act is dismiss the case. No other action can be taken. It is a matter for the Director of Public Prosecution to take up the case and seek a conviction. Section 26 must be tougher to take cognisance of the serious risks and costs faced by the defendant who defends a claim dismissed under its provisions. This amendment Bill proposes to insert in section 26 a provision that in any case dismissed under the section, the claimant must pay the legal costs of the defendant. That will increase the cost of knowingly misleading the court. Those bringing claims in good faith have nothing to worry about from this change which will only impact on those seeking to deceive the courts.

Of course, the Oireachtas cannot instruct the Judiciary in that regard. We cannot simply tell the courts to do this and let that be the end of it. The courts need this direction because every case is different and every claimant is different. The language of the amendment Bill takes this on board and replicates the language already used in section 26. A court may not give an order to pay the legal costs of the defendant if it believes it would be contrary to natural justice to do so. In the case that it is contrary to natural justice, the court shall note this in its decision. This gets the balance right between increasing the penalties for fraudsters and respecting the difference of each case and the fact that each claimant has his or her own circumstances which must be taken on board. Last year my colleague Deputy Kelleher introduced a similar Bill to amend section 26. That Bill proposes that where a court dismissed an action pursuant to section 26, it should direct that a transcript of the action and any relevant evidence be sent to the Director of Public Prosecutions. The Bill before the House should be taken in conjunction with our Bill last year. Together, the two Bills will make section 26 far stronger than those who clearly mislead the courts in making personal injury claims.

The second part of the Bill seeks to increase the maximum fine that can be imposed by the District Court on summary conviction for committing fraudulent actions under the 2004 Act. A summary offence is one which can only be dealt with by a judge sitting without a jury. This type of offence is heard by the District Court. Under the 2004 Act, the maximum penalty that can be imposed on summary conviction is 12 months in prison or a fine of €3,000. The Bill proposes to amend the 2004 Act to provide for the imposition of a class A fine, which is a fine up to a maximum of €5,000. An indictable offence is one in respect of which a jury sits and it is heard before the Circuit Court or the Central Criminal Court. The maximum penalty that can be imposed on conviction for an indictable offence under the 2004 Act stands at ten years in prison or a fine of up to €100,000 or both. However, while we can have all the fines and sentences of imprisonment in the world, nothing will change if cases are not prosecuted before the courts. If policy holders and insurance companies settle out of court and fail to defend fraudulent claims, that fraud will not be detected. If the courts fail to dismiss cases under section 26, that fraud will go unpunished. If the Director of Public Prosecutions does not take cases in which insurance fraud is suspected, yet again it will go unpunished. If An Garda Síochána does not put in place arrangements for the reporting of suspected insurance fraud, nothing will happen. Fraudsters will continue to get away with cheating the system and the costs will continue to fall on honest, hardworking customers. Businesses will continue to be pushed to the brink and countless jobs will continue to be put at risk. This cannot continue. Figures released recently by the CSO indicate that fraud, deception and related offences have increased by a staggering 18.4% since last year. While I accept that these figures are reserved by the CSO, if anything, the numbers of instances of fraud, particularly insurance fraud, are likely to be far greater than it reports. That is simply because most cases of insurance fraud are not reported.

The Government must take the lead on this issue. As an Opposition party, Fianna Fáil can propose legislative changes and motions and keep putting the Government under pressure, but nothing will happen unless the Government as a whole recognises the problem. Why has it not taken the lead by providing the money for a dedicated unit within An Garda Síochána to tackle insurance fraud? Why have files not been sent to the Director of Public Prosecutions for prosecution? Why are we still waiting for an insurance fraud database to allow the industry to better track cases of insurance fraud? For far too long, the Government has dragged its feet on the issue. It does not see it as a priority and is failing to lead the way. How many businesses must go to the wall before action will be taken? The Government must fully establish national claims information databases inclusive of public liability and employer's liability insurance. We need an index to track insurance costs for businesses over time. A judicial council must be established to bring forward guidelines on personal injury award levels. It has been nearly a year since the Government first saw the final report of the Personal Injuries Commission which stated soft tissue damage awards in Ireland were four times higher than in England and Wales. We need legislation to compel insurance companies to inform customers of claims made against them.

These are among the many areas which were considered by the cost of insurance working group on which the Government has failed to deliver. Members on this side of the House have offered our full co-operation to meet the challenge. We have supported the quick passage of legislation when it has been put before us. At every stage, we have sought to get to the bottom of the insurance crisis. I hope that today this Bill will receive the support of the whole House. This is not revolutionary legislation. It is a simple Bill to increase the penalties for the making of fraudulent claims. However, that is only part of the problem. We need more focused attention by An Garda Síochána which has long called for the establishment of a dedicated insurance fraud unit within the force. The Government has dithered on the issue for far too long. We need to see more cases being brought before the courts in pursuit of convictions. We must get the message out that insurance fraud does not pay. The Bill will go some way towards sending such a message.

8:55 pm

Photo of Michael MoynihanMichael Moynihan (Cork North West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I welcome the opportunity to speak to the Bill. We are putting this legislation forward to address the serious issue of escalating insurance costs. In the past 14 months Fianna Fáil has brought forward two Private Members' motions, for the debates on both of which the Visitors Gallery was packed. One was on play centres, while the other was related to the business insurance reform group and moved in March 2018. Both groups who packed the Visitors Gallery were here to send a message to the House and the Government that the escalating cost of insurance was no longer acceptable. Fianna Fáil has cited many instances of increased costs. Last week on the Order of Business I referred to a farmer whose insurance costs had previously increased from €3,000 to €8,000 and whose cheapest quote this year was €24,000. That farmer is looking to the Government to tackle the insurance cost issues. There are insurance cost related issues and challenges across every aspect of Irish life, whether for motorists, small businesses, restaurants, public houses, farms and, as evidenced recently, marts. The care sector is also affected, including the childcare sector.

In Charleville in north Cork, insurance for St. Joseph's Foundation increased from €150,000 to more than €500,000. The foundation is dependent on a one-off grant from the HSE and fundraising to address these costs. These are real challenges facing people across our communities when looking for insurance, yet the Government is not tackling them head on.

This Bill attempts to address fraudulent claims. There have been countless amounts of evidence, commentary, articles and inches of editorial space on the cost of insurance. This is about the person paying the premium. Last week, there was a lengthy debate on this matter. Insurance companies are making significant profits off the backs of ordinary citizens. We must address the raft of issues. For example, why has a Garda unit on insurance fraud not been established? There is no panacea for reducing premiums to competitive levels in any sector, but why is it that, in spite of any legislation that has been proposed by us, and we have tried to progress numerous Bills, the Government has not decided to tackle this massive crisis head on? There have been many Government debates on, for example, external financing issues, but this is an issue that the Government could take on. It could try to ensure that the ordinary citizens of the Republic get fair premiums.

Evidence from CCTV cameras can only be stored for a certain amount of time, yet people can make claims two years after an incident. That is not acceptable and has to be challenged. Many businesses have readily told us that they are going without insurance. That is a damning indictment of the Government's inaction. I appeal to the Minister to take this legislation seriously, enact it and ensure that every idea we have proposed and every challenge we have put to the Government is accepted in an attempt to reduce these escalating costs for ordinary citizens.

9:05 pm

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

"I have reached a point, not only in my legal life but in my life generally, where I am convinced a moment has come in this country where something really has to be done about our compensation culture." These are not the remarks of a business person or politician. They are the remarks of Nicholas Kearns, former President of the High Court and chair of the Personal Injuries Commission. He is not someone who will have to fork out thousands of euro for insurance. He is not someone who will be laying anyone off after closing his business because of insurance. This is a call for action from the Judiciary to a Government whose ear has been deaf to such calls. It has been deaf to the voice of business, including the businesses that occupy these galleries, of the Alliance for Insurance Reform, of insurance companies and of the many people who have been seeking action, and nothing substantial has happened. Businesses are closing and people are being laid off.

The Bill seeks to send a message that dodgy claims are no longer acceptable and will be followed up on. As Deputy Cowen has described, the range of measures in the Bill will send the message that businesses and insurers are no longer easy pickings for those looking for an easy buck. The Government has to row in behind this by supporting and fast-tracking the legislation and by providing the Garda Commissioner with the resources necessary to set up the Garda fraud unit to tackle fraudulent claims or claims that are clearly unsustainable. I acknowledge the profile that has been given to many cases by the media in recent weeks, in particular by Charlie Weston of the Irish Independent. In those cases, the claims were clearly unsustainable and were only pulled out of court at the last minute, yet they were not investigated afterwards. The Garda needs to be resourced to set up a unit to investigate such instances. This legislation needs to be passed so that the Garda can be equipped with the most up-to-date legislative measures to investigate and pursue cases where there are clear question marks over claims that fail or are withdrawn in court. If the Legislature, Government and police force do not send a message out, businesses, be they retailers, services, play centres or care centres, will continue to close and jobs will continue to be lost.

The former Taoiseach had a phrase about wanting Ireland to be the best place in the world to be a small business. It is the best place in the world to be an insurance company. Some of the largest insurance companies in the country earned €250 million in profits while small businesses were closing or laying people off to pay their unsustainable fees. There has been no measure of how what is paid out in Ireland for soft tissue injuries compares with Britain's figures even though the circumstances and so on are similar. There has been no brake on these payouts and costs. It seems that no one in the Government is listening.

There are a range of legislative measures and initiatives that would not cost money. While I acknowledge that the Judicial Council Bill 2017 is now moving through the Seanad, it was delayed because the Minister's Independent colleague seemed to be insistent on the Judicial Appointments Commission Bill 2016 going through before it. While he was getting his wish, businesses were closing and people were being laid off. I welcome the fact that sense has finally prevailed in that regard. It is to be hoped we will see an impact.

Do not let another opportunity go. Do not let other businesses go to the wall. Do not let people lose their jobs while the Government dithers on insurance reform and on taking action on the extreme cost of insurance. It strikes me that, when it comes to insurance reform, the Government is whistling while small businesses and jobs are burning. It is time for action, not plámás.

Photo of Charles FlanaganCharles Flanagan (Laois, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank Deputies Cowen, Calleary and Michael Moynihan for setting out on behalf of Deputy Michael McGrath the proposals under the Civil Liability and Courts (Amendment) Bill 2019, which Deputy McGrath introduced as a Private Members' Bill last week. As Deputy Cowen mentioned, the Bill comprises three sections and proposes two amendments to the Civil Liability and Courts Act 2004 and one amendment to the Criminal Justice Act 1951.

I wish to state that the Government has decided not to oppose the Bill on the understanding that substantial amendments to it will be required and that there will be engagement with the Deputies opposite to seek agreement on those amendments. At the same time, the Government has noted that the Bill addresses matters that have been considered by the cost of insurance working group. As reflected in the setting up of that group, the Government recognises that we have a real challenge with awards inflation and claims inflation in the insurance sector along with the premium inflation that comes from them. At the same time, we have a highly profitable insurance sector, with the annual profits of our top ten insurance companies running at between €6.1 million and €201 million at the end of 2017. The total assets of insurance corporations are reported by the Central Bank to have been €305 billion at the end of last year. There is a role in this situation for insurers, too, including by taking a more concerted and solutions-based approach to resolving the fact that certain areas of risk are being commercially avoided across the sector to the detriment of vulnerable businesses and consumers. I listened to what the Deputies had to say about how this was an issue. I do not disagree.

Section 1(a) of the Bill proposes an amendment to section 26 of the Civil Liability and Courts Act 2004. This section provides that a court shall dismiss a plaintiff's personal injuries action in circumstances where the plaintiff or another person knowingly engages in the giving of false or misleading evidence unless the dismissal of the action would result in an injustice being done. This amendment would require the court, where it so dismisses an action, also to make an order that the plaintiff shall pay the legal costs of the defendant unless this would result in an injustice being done. However, section 26 of the 2004 Act deals with the issue of dismissal of a case on the basis of false or misleading evidence. It does this in respect of the relevant proceedings and any affidavit sworn in support of those proceedings under section 14 of the Act. The court shall dismiss an action in such circumstances "unless, for reasons that the court shall state in its decision, the dismissal of the action would result in injustice being done". It is clear, therefore, that the avoidance of an injustice already runs to the root of section 26 as currently implemented and, to that degree, it is already aligned with the Bill. I accept that the proposed subsection is intended to avoid a situation where the Oireachtas might be seen to be instructing the courts on how justice is administered, but further work will be necessary if we are to be satisfied that this will not become the case if orders of costs are issued in the manner proposed.

Section 26 of the 2004 Act also needs to be read in conjunction with section 25, which makes it an offence to give or adduce false or misleading evidence in a personal injuries action.

It also makes it an offence to give, or dishonestly cause to be given, such an instruction or information to a solicitor, or a person acting on behalf of a solicitor, or an expert, as defined in section 25, in respect of a personal injuries action. For the purposes of section 25, the act is done dishonestly if the person does it “with the intention of misleading the court”.

Under section 1(b), the Bill proposes an amendment to section 29 of the Civil Liability and Courts Act 2004, which deals with offences under Part 2 of the Act. This Part of the Act relates to personal injuries actions and provides for offences relating to a verifying affidavit under section 14 and false evidence under section 25.

Section 2 proposes an amendment to section 4 of the Criminal Justice Act 1951. This amendment appears to duplicate the proposed amendment of section 29 of the Civil Liability and Courts Act 2004 in respect of fines and sentencing, as I have just described, and, as such, it may not be necessary. The Bill is, to some degree, a restatement of what is already happening to costs before the court in personal injuries cases. We need, therefore, to be careful of any undermining of the Statute Book that might result from restating powers the courts already have in one particular instance but not in others. Ultimately, the Bill would impose a requirement on the courts to make orders for costs, despite this being a matter for which there is some existing judicial discretion. I remind the House that, under the principle that costs follow the event, the courts have the power to award costs and have done so against a plaintiff at the discretion of the judge in many cases. The court also has the power to limit costs where a plaintiff brings proceedings in a court that does not have the lowest jurisdiction and can make differential costs orders by reference, for example, to a proportion of the costs, a date or steps in proceedings. A further important consideration is that the principle that costs should follow the event is being given greater legislative authority under Part 11 of the Legal Services Regulation Act 2015.

The wording of section 8 of the Civil Liability and Courts Act 2004 was recently amended to ensure that defendants in personal injuries actions are notified in writing of a claim within one month of the date of the cause of action. The section was also amended to require a court to draw inferences from a failure by a plaintiff to comply with this requirement and, where the interests of justice so require, require it to make no order as to the payment of costs to the plaintiff or to reduce such costs. Measures have been undertaken to increase the awareness of these obligations among relevant parties and the relevant rules of court have been updated.

In its report on the cost of motor insurance, published in January 2017, the cost of insurance working group reviewed sections 25 and 26 of the Civil Liability and Courts Act 2004. It noted that the number of recorded prosecutions and convictions for the offence of false evidence in section 25 is very low and that this suggests a need for further co-operation between the insurance industry and An Garda Síochána. On the basis that much more could be done by the insurance industry and other defendants to pursue allegations of insurance fraud, the framework for the reporting of alleged insurance fraud cases to the Garda authorities is being strengthened. The working group was satisfied that sections 25 and 26 did not need further review and went on to express its belief that for section 26 to achieve more effectively its aim of tackling personal injury fraud, there is a major onus on defendants to challenge misleading evidence, where appropriate, by taking the matter to courts rather than settling on the steps of the court for fear of an unsatisfactory outcome.

A number of Deputies sitting opposite me mentioned Garda involvement and Garda units. As the House will be aware, in December 2018, the Garda Commissioner indicated his preference that, in principle, An Garda Síochána should not be funded by any source other than the Exchequer in addressing the matter. That notwithstanding, the Commissioner has indicated that, taking into account factors such as the availability of resources and competing demands, he is examining an improved investigative capacity within An Garda Síochána to tackle this important area. I undertake to keep the House informed of that and I expect action on the part of the Garda Commissioner in the not too distant future.

A range of legislative and policy measures have been taken by the Government on foot of the work of the cost of insurance working group, its fraud round table, its legal subgroup and the Personal Injuries Commission, while a number of others are at an advanced stage of preparation. As shown even by those few examples I have given in response to the Bill, these mutually reinforcing measures have a particular focus on the area of insurance fraud and, as such, are strongly intended to augment the original policy objectives of sections 25 and 26 of the Civil Liability and Courts Act 2004. Any ongoing consideration of the Bill will have to satisfy these important objectives.

On the Judicial Council Bill 2017, I am pleased that in spite of some challenges in the Houses, we have completed Committee Stage and I expect a number of subsequent amendments to address further the matter of cost of insurance claims to be passed.

I will not take issue with any of the facts outlined by Deputy Cowen or other Deputies sitting opposite me in respect of the cost of insurance working group. I am, along with the Minister of State, Deputy D'Arcy, the Minister for Business, Enterprise and Innovation, Deputy Humphreys, and, to an extent, the Minister for Finance, Deputy Donohoe, very conscious of the issue and we welcome initiatives on the part of the Opposition such as the Bill. I assure Deputies Cowen and Michael McGrath that we will safely see the passage of the Bill on Second Stage at the earliest opportunity. We will be happy to engage with the Deputies opposite to ensure that any legislation we enact is constitutionally sound and legally robust. I welcome the opportunity for the debate. The House will have further opportunities in coming weeks to report progress on what is a difficult and challenging matter. It behoves us all to ensure, from both a resource and legislative perspective, that we do our best for people.

9:15 pm

Photo of Maurice QuinlivanMaurice Quinlivan (Limerick City, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

The Minister will be aware that the Joint Committee on Business, Enterprise and Innovation recently published a report on the costs of doing business. According to all the stakeholders we met, the main factor was insurance and, as other Deputies have outlined, their inability to secure insurance at a cost they could afford. It is causing significant problems. I do not understand why there is no urgency in the Government to deal with the issue and I cannot understand the Government's approach to the cost of insurance crisis. It is yet another crisis unfolding under the Government's watch. Bold action could address it quickly if the Government had the interest to do so, although I do not believe that it does or that it recognises the urgency. Rather, it stands idly by while the situation worsens. As with its approach to the housing crisis, the Government's unwavering commitment to the free market economy wreaks havoc on our society. Small businesses are closing, people are losing their jobs, while entrepreneurs who pour their lives into building their businesses are losing everything for which they have worked, solely due to the exorbitant cost of insurance.

I appreciate that the Bill deals mainly with the issue of insurance fraud, an important issue but not by a long shot the only reason for the high cost of insurance. Insurance companies are having a laugh at people, consumers, politicians and regulators - all the way to the bank. In recent weeks, Aviva Ireland posted profits of €113 million, an increase of €14 million on last year, RSA Insurance announced profits of €35 million for the past 12 months, while FBD Insurance reported profits of €50 million. These massive profits are on the back of unaffordable insurance premiums, which are not only closing businesses but also keeping people off the road because they cannot pay thousands of euro per year in car insurance premiums. The considerable increases in the cost of policies in the voluntary, community and charity sectors also have a severely detrimental effect on their ability to sustain their projects and, in some cases, to carry on. All of us will have met stakeholders who have outlined the issues they have with the cost of insurance, rising premiums and their inability to pay. A family resource centre in my area has used its reserves to pay for insurance this year because of the significant increases, but it will not have those resources for next year. We need action as quickly as possible. I have lost count of the number of Bills, including some sponsored by my colleague, Deputy Pearse Doherty, motions and suggestions put forward by the Opposition to tackle the insurance problem, yet the Government frustrates these measures and refuses to act itself.

Ultimately, Fianna Fáil is the party keeping the shambolic Government in office. Now that Brexit has been kicked down the road for six months, it would be sensible for Fianna Fáil to call a halt to the charade, withdraw its support for Fine Gael, and allow voters the opportunity to choose an alternative Government that is prepared to take on big business and tackle the cost of insurance crisis.

When will the Garda insurance fraud unit be up and running? The Minister stated it would be in the not too distant future, but this gives no comfort to anybody. Does he intend to reinstate blue book oversight of the insurance industry? Will he seek a commitment from insurers that they will drop premiums in return for any reform that will reduce their costs? As I stated, they are making big profits. Is the Minister able to update us on the Competition and Consumer Protection Commission, CCPC, investigation into insurance companies that has been ongoing for almost two years? Will he update us on the status of Sinn Féin's Consumer Insurance Contracts Bill?

9:25 pm

Photo of Donnchadh Ó LaoghaireDonnchadh Ó Laoghaire (Cork South Central, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Ar an gcéad dul síos, beimid ag tacú leis an mBille seo. Is ábhar fíorthábhachtach é seo. Shamhlóinn go dtagann sé thar dheasca gach aon Teachta agus Seanadóir. Bíonn tionchar aige ar eagraíochtaí pobail, gnólachtaí agus a leithéidí. I am sure in any engagement Deputies have with businesses and community groups the issue of insurance comes up. It is absolutely crippling many businesses. Small and medium-sized businesses which make up the majority of Irish businesses and employ the majority of workers in the private sector, are seriously struggling. It is the case, as Deputy Quinlivan said, that many community organisations, family centres and sports clubs are finding it really very difficult to keep their costs down and focus their hard-earned fundraised money on the activities for which they were established.

Deputy Cowen made reference to play centres. It is a specific sector that is finding it very difficult. I am sure other Deputies have been contacted by them. One example is Chuckies, a well known outlet in Cork. It has approximately 37,000 customers, 2,500 of whom are classified as regular. The business has been going for approximately 16 years. It is well established in the community and has a big involvement in local community, voluntary and social causes. For example, it runs autistic days in association with the Rainbow Club. Like many play centres, it is at the pin of its collar in trying to meet the cost of insurance. It is finding it almost impossible, if not impossible, to find an insurer based here and the premiums are absolutely enormous.

We will support the legislation, but fraud is not the only issue. There is no question that insurance fraud is not a victimless crime as it affects all of us, but there are also many other issues that need to be addressed. In the Bill Deputy Michael McGrath cites section 26 of the 2004 Act as the section he wishes to improve. This will require careful consideration. The Minister has addressed the fact that section 29 deals with the issue to some extent. Subsection (1) states a person guilty of an offence under this Part shall be liable on conviction on indictment to a fine not exceeding €100,000 or imprisonment for a term not extending ten years or both. My understanding of subsection (1) in its totality is that it increases the maximum fine that can be imposed from €3,000 to €5,000 and places the legal costs on the plaintiff, a matter which is already at the discretion of the judge hearing the case. This is a suggestion worth considering and we need to discuss it further, but it is complex and making it judges "shall" is not as straightforward as it is sometimes made out. Obviously, it is common for costs to be awarded to whomever the judge sees fit, but the discretion of the judge is obviously important also. We need to consider this issue carefully, particularly in the context of the long established legal maxim of awarding costs following the event, which has a more concrete statutory basis in the Legal Services Regulation Act. We need to tread carefully, but it is certainly a proposal that is worth exploring further.

Section 2 of the Bill is a restatement of and makes reference to section 1. It places an additional reference to very specific cases in the 1951 Act.

To return to the issue of the cost of insurance more generally, it is crippling. Action on this issue has been slow and disappointing and caused frustration. It is almost three years since the Oireachtas Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach produced its very progressive and strong report on the cost of insurance. The cost of motor insurance is a significant issue for many constituents who find it practically impossible to find an insurer to put them on the road and those who do receive quotes, they are out of control, particularly younger and older drivers. A particular category who receive quotes that are practically incomprehensible comprises returning immigrants. The joint committee found that the motor insurance industry had been deliberately hiding key information from public view and engaged in cartel-like behaviour. As far as I am concerned, that is the insurance companies throwing people to the wolves. The report stated all witnesses who had appeared before the committee, except those for the insurance industry, had highlighted as a serious problem the absence of data sharing and a complete absence of transparency throughout the sector. The absence of this information meant it was impossible to get to the root causes of motor insurance price increases. The committee stated this increased it concerns about how the insurance industry was operating and calculating risk. I am sure many people, whether for business, personal or motor insurance, will testify that a premium can be a little like a lottery and that they never quite know what they will receive.

The report also suggested another cause of the spikes in the cost of insurance which had seen some people's premiums increase by 100% was that insurance companies had been using their motor insurance books to bolster shortfalls in investment income in other areas. The CCPC and the Central Bank were also criticised. The committee found that the CCPC had insisted its remit was economy wide and limited to enforcement of competition law, something that does nothing to ensure the industry acts in the interests of those who avail of insurance and pay large chunks of money annually to insurance companies.

On the issue of insurance fraud, we have wasted a lot of time discussing the Garda insurance fraud unit. Towards the end of last year I received documents under freedom of information legislation that displayed a series of missed deadlines by Insurance Ireland since early 2017 to progress the proposal to set up an insurance fraud unit in An Garda Síochána funded by private industry. I heard the Minister state it was inappropriate for the industry to fund a section of An Garda Síochána. I agree, but that should have been the conclusion from the outset. We wasted an awful lot of time waiting for engagement and proposals from the insurance industry, as the freedom of information request shows. It was leading the Government on a merry dance on the issue. It had absolutely no interest in getting behind the proposal. From the very outset, it should have been for a fully publicly funded section of An Garda Síochána to deal with this area, but we wasted time and are no closer to it now because we were waiting for proposals. It really is frustrating, at a cost of approximately €1 million. It is entirely possible to fund and within the gift of the Government, if there was the political will, to do so. It should do it now, but it really is a shame that Insurance Ireland has delayed its establishment.

To be honest, despite its protestations that fraud is a cause of increased premiums, I am not sure tackling fraud is as much of a priority for the industry as it should be. Although it was belated, it was interesting to see the Tánaiste point last Thursday to the massive profits which Deputy Quinlivan outlined. Aviva made a profit of €113 million, which was up by €14 million. RSA made a profit of €35 million in the past 12 months, while FBD reported a profit of €50 million. These are very profitable organisations. I to not believe fraud goes half the way towards explaining the increased premiums. I am glad that the Tánaiste is belatedly realising this and I hope the Government is belatedly realising it because the time has come to take a very strong line with the insurance bodies. There is much more of a tale to tell about the practices in which they are involved. There is a need for much greater transparency on the premiums they charge because it is consumers, community organisations, individuals and businesses that are suffering. We need to see a lot more from the Government. I want to see it take a stronger line with the insurance industry, publicly fund a Garda insurance fraud unit and support and work with detailed legislative proposals such as this.

9:35 pm

Photo of Danny Healy-RaeDanny Healy-Rae (Kerry, Independent)
Link to this: Individually | In context | Oireachtas source

9 o’clock

I am glad to get the opportunity to talk again on the very important matter of insurance. It is such an issue with everyone. People, young and old are angry about the costs of insurance for everything. We know the hoops that younger people, for example, must go through when trying to get a car on the road for the first time. With the costs of insurance for such drivers, they try to buy the cheapest car possible. They then find the insurance companies will not take a car that is more than ten years old even though it may have passed its NCT. This anomaly seriously needs to be addressed. If the car has passed the NCT then it should be as good as the new car that comes out of the factory in every way, or that is what we are told. Many a family in rural places also needs a second car for taking the children to school and to all of those vital swimming and dancing lessons and so on.

The haulage industry is going through a terrible time currently with the cost of fuel and insurance. Likewise, taxi drivers have to pay premiums in the region of €17,000 and €18,000 to get their taxis insured. This is their livelihood. The insurance is costing nearly €300 or €400 per week.

Small hotels, bars and restaurants find it impossible to get insurance now. Sports clubs and show committees are also affected. Places such as Kilgarvan, Glencar and Dingle, for example, run one-day events to retain their identity. With the post offices, creameries and shops gone, it is very important to let communities have at least one day so they can call themselves Kilgarvan people, Dingle people or Glencar people. There is the committee that organises the St. Patrick's day event in Sneem, for example. The world fiddle day in Scartaglin, the Sliabh Luachra music trail, the Castleisland fair day and the Patrick O'Keeffe music festival are all very important and vital to rural communities in the area. The events are suffering and paying through the nose for insurance. Some of them are falling by the wayside because they cannot pay for the insurance.

Photo of Mattie McGrathMattie McGrath (Tipperary, Independent)
Link to this: Individually | In context | Oireachtas source

I welcome the opportunity to speak briefly on this hugely important legislation. The threat to small businesses from escalating insurance costs and bogus claims is having a severely detrimental impact on our communities. I do not know what the Minister is doing. His eyes must be closed.

I commend the work of my colleagues, Deputies Michael McGrath and Cowen, and for their persistence in following this matter through. Deputy Michael McGrath had previously made clear that there seems to be no real disincentive to bring forward bogus claims. There is nothing. They can do whatever they like.

The purpose of the Bill is to provide for an increase in the penalties for those found guilty of an offence under section 26 of the 2004 Act. Those convicted of an offence under section 26 can currently receive a maximum fine of €100,000 or a sentence of ten years. Those summarily convicted can receive a maximum fine of €3,000, a sentence of 12 months or both. This Bill increases the maximum fine that can be imposed for a summary conviction to a class A fine, which currently stands at €5,000.

I put it to the Minister that something urgently needs to happen. The journalist, Charlie Weston, reported in January that plans for insurers to fund a new Garda unit to tackle fraud claims have been knocked on the head by the Garda Commissioner, the Aire, and the Minister of State responsible for insurance reform, Deputy Michael D'Arcy. This in turn led to the Government being accused by the Alliance for Insurance Reform of engaging in a “perpetual round of bickering and pass the parcel” instead of progressing key insurance reforms.

I put it to the Minister, Deputy Flanagan, that this is deeply regrettable especially given that, as Charlie Weston has also observed, the idea was based on the insurance fraud enforcement department operated by the City of London Police funded by insurance companies in Britain, but over which insurance companies have no operational control. Why can we not do this here? Who are we covering? We need to be as creative as London if we are to address this problem.

I do not know what the Minister is doing, but civil legal aid is a huge part of it. In response to a parliamentary question from me the Minister, Deputy Flanagan said that more than €605 million had been allocated for legal aid since 2011. The information I have received, however, shows that the costs for criminal aid legal for every year covering the period 2011 to 2017 ranged from €49 million to €58 million. The average cost per annum during the same period for civil legal aid shows that it has never dropped below €30 million. Indeed, there has been a €9 million increase in the costs from 2011 to those incurred in 2017. I put it to the Minister that this is a gravy train and that he is afraid to derail it. Every business, from the cradle to the grave, is being fleeced by insurance costs and bogus claims while the Minister does nothing but stand idly by. The Minister is fiddling while Rome burns. I do not know why he is protecting the vested interests and the legal interests with all of that money. Businesses are being suffocated, stifled and smothered out of existence while the Minister stands idly by. They are just waiting for the Government to go canvassing and knocking on their doors. Let us see the answer they get.

Photo of Michael Healy-RaeMichael Healy-Rae (Kerry, Independent)
Link to this: Individually | In context | Oireachtas source

We all know what the problems are but we need to know what solutions can be brought forward to try to resolve this critical situation. Insurance reform is needed. Action is needed to finally put the nail on what I would call bogus claims. It is totally unnatural. The Minister, Deputy Flanagan, is a politician - forget about being a Minister - who deals in the real world out there with constituents. He knows it is highly unusual that some unfortunate people seem to fall into holes everywhere they go, cannot go to a nightclub or a pub without falling and cannot drive along the road without having some sort of an accident. They seem to be extremely accident prone and it seems to run in families. It is like serial objectors, in that there are people who are continuously involved in litigation. Questions have to be asked. It amazes me that when a person goes before the courts, his or her history with regard to claims is not looked at. It should be because that is the only way we will stamp out this type of rot. People who operate public houses, dance halls, discos and hotels are on their knees because of the crippling insurance fees they have to pay.

It is ironic that in the space of one week some weeks ago, I met a group of taxi drivers who complained to me about the high costs of their insurance, as well as meeting four fine, respectable lorry drivers who worked in the transport industry as private operators and who told me they were looking at giving up, getting out and finding alternative jobs. These people had driven lorries all of their lives and had operated their own businesses. They are highly respectable people but they must give up due to the high costs of insurance and because everything is stacked up against them.

People who run our community halls and groups are the backbone of the events and organisations. The one thing everybody is saying now is that they are worried about insurance and claims. They say "We cannot do that in the street tonight because if we organise it and somebody falls, we will be responsible for it." I put it to the Minister that we are losing a lot of the great events. Some were little simple things that were enjoyable and held in different villages and towns, such as a circus pulling up or some sort of event or sports day. It was some harmless activity, but now people are terrified of what would happen if somebody fell and twisted their small finger, resulting in a big claim. An overhaul of the Judiciary is needed with regard to how the courts system is working. We have to address this serious problem or people, in trying to pay for insurance, will be priced out of existence.

I acknowledge Deputies Michael McGrath and Cowen for the excellent work they have done in bringing this very important subject and debate before the House, and to have us all on our feet highlighting again to the Minister and to the Government that something has to be done. Every Deputy is dealing with this problem in his or her constituency. People who operate events in dance halls, discos, nightclubs and hotels are terrified. They are on their knees. As the event may have a big turnover and a large volume of people going in, some on the outside might think the business is making a lot of money.

If they had to pay the costs that these people have had to pay in terms of massive increases in their insurance premiums over many years, they would be frightened. I again thank Fianna Fáil for bringing forward this Bill.

9:45 pm

Photo of Eamon ScanlonEamon Scanlon (Sligo-Leitrim, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I am sharing time with Deputy James Browne.

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
Link to this: Individually | In context | Oireachtas source

Is that agreed? Agreed.

Photo of Eamon ScanlonEamon Scanlon (Sligo-Leitrim, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I commend my colleagues on bringing forward this important Bill to tackle the insurance fraud culture in Ireland. Insurance fraud costs us all. The Government needs to act more quickly to tackle the issue of escalating insurance costs. We are all awaiting the establishment of a dedicated Garda anti-fraud squad. Businesses throughout the country, including pubs, farms and marts, have been crippled by massive increases in insurance. We heard recently about crèches not being able to survive because of insurance costs. Unless something is done very quickly, a lot of people will lose their jobs. That is where we are heading.

In recent times, the insurance companies have been taking a more serious look at the claims being presented in courts, which is to be welcomed. In the past 12 months in particular, people have been withdrawing their claims because of the work being done by the insurance companies. However, even when a claim is withdrawn, there are a lot of costs attached to it. The insurance companies have to employ legal practitioners to determine whether a claim is justified. Many of them are not justifiable and so they are withdrawn, but at a cost to me and everybody else in this country in terms of high premiums. That is wrong.

Motor insurance was mentioned as well, particularly for young people who live in rural areas. The Minister, Deputy Flanagan, comes form a rural constituency and he knows exactly what I am talking about. There are many young people living in rural areas who, thankfully, are in a position to get employment, but as they do not have the luxury of the Luas, the DART or other public transport, they need a car to get to work. I know this is not the brief of the Minister, Deputy Flanagan, but something needs to be done for people on learner permits. They could, perhaps, be allowed to drive a car during work hours, with a curfew in place for the remainder of the day. It is a proposal worthy of serious consideration.

The Personal Injuries Assessment Board was set up a number of years ago. It worked successfully for a number of years. The number of claims dealt with through the Personal Injuries Assessment Board was as high as 70% at one stage but that number has fallen back to 32%. More work could be done to get these claims processed by the Personal Injuries Assessment Board, in respect of which costs are not high. This process allows people to present a claim and have it adjudicated on without incurring substantial legal costs. It would be an improvement.

We know that motor insurance premiums have increased considerably over recent years. Public liability insurance has gone through the roof. As I said earlier, businesses cannot afford to pay it. This is creating a lot of problems for businesses and jobs are being lost.

Photo of James BrowneJames Browne (Wexford, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I welcome the opportunity to speak on this Fianna Fáil Bill which seeks to increase dramatically the penalties for those who commit insurance fraud. I am calling for urgent action by Government to tackle rising insurance costs. The message for the Government is that this issue must be a priority. To date, there is no sign of urgency, only lethargy. There is a phenomenal amount of anger, frustration and disappointment at the lack of progress in dealing with the issue of rising insurance costs. Motor insurance and public liability insurance are increasing at unsustainable rates. Added to this is the increase in excess levels and expanded exclusion clauses included in insurance policies.

Businesses throughout the country are facing crippling costs for insurance. Businesses are closing, jobs are being lost, and our economy is being undermined. I have dealt with many businesses in Gorey, Enniscorthy, Wexford, New Ross, Bunclody, Ferns and throughout the county of Wexford that are struggling to remain open. Charities, community groups and sports clubs are all badly affected. Many businesses have experienced substantial and unjustifiable insurance increases. Honest people are suffering. The majority of claims made under insurance policies are legitimate. There are two major issues concerning claims. First, in the case of legitimate claims, payouts by courts are more than four times those of comparable claims in the UK. This is unacceptable and unsustainable. Second, there is a serious level of fraudulent claims. We are all aware of many instances of fraudulent or exaggerated claims being made and settled. There have been instances of policyholders pleading with insurance companies to contest these claims but to no avail.

We need to get tough on insurance fraud. We need to tackle the insurance fraud culture in Ireland. It is not a victimless crime. Insurance fraud costs us all. We need to see tough penalties imposed on those who take false claims. This Bill seeks to increase the penalties for those who bring fraudulent claims. Section 26 of the Civil Liability and Courts Act 2004 makes it an offence knowingly to give evidence that is false and misleading. If a claim is dismissed because of section 26, it ignores the significant costs incurred by either the defendant or the insurance company defending the claim. To defend a case in the court of law is expensive and it puts many people off defending a claim. This Bill stipulates that where a case is dismissed under section 26, the claimant will have to pay the legal costs of the defendant. This will not only compensate defendants but also act as a significant deterrent to insurance fraudsters. In addition, the Bill seeks to increase the maximum fine on summary conviction to a class A fine, which currently stands at €5,000. Currently, the maximum penalty on summary conviction is a prison sentence of up to 12 months and-or a fine of €3,000. This Bill seeks to increase the time served for a conviction to a maximum penalty of up to ten years in prison and-or a fine of up to €100,000.

This Government is once again playing catch-up on insurance reform. It has yet to establish a national claims information database to track the level of claims, which was to have been done by June 2018. It has yet to tackle insurance fraud, to establish a judicial council to compile guidelines for general damages relating to personal injuries, to establish a publicly funded anti-fraud unit in An Garda Síochána, to establish a business insurance premium index that would track prices over time, and yet to take any action towards stabilising personal injury claims. All the while the European Commission and the Competition and Consumer Protection Commission continue to investigate the industry for anti-competitive behaviour. The Fine Gael-Independents Government has a mandate from this House to make the necessary reforms to tackle insurance fraud. It is wasting that mandate in its failure to address the serious crisis of the rising cost of insurance. This Fianna Fáil Bill, which seeks to increase dramatically the penalties on those who commit insurance fraud, sends out a clear message. The Government needs to listen and to act to prevent more businesses closing.

Photo of Ciarán CannonCiarán Cannon (Galway East, Fine Gael)
Link to this: Individually | In context | Oireachtas source

On behalf of the Minister, Deputy Flanagan, I thank Deputy Michael McGrath and other Members for their active participation in today's Second Stage debate. It is evident from the discussion that the issues of insurance costs and insurance fraud are of fundamental concern, while also being very difficult to tackle comprehensively.

As is clear from the range of recommendations made by the cost of insurance working group, its legal subgroup, its dedicated fraud round table and the Personal Injuries Commission, a concerted response, although complex, is required. We have to take this Bill into consideration in that context. Some of the interventions this evening have, therefore, related to the adverse impact on enterprise and private citizens of insurance fraud, which seems to have had a tacit acceptance as some kind of victimless crime. As evidenced by the work of the cost of insurance working group, however, and by the various interventions on the matter before the House in committees, there seems to be a renewed determination to deal with the issue this time around, notwithstanding our impatience to see our responses have immediate practical effect. This has informed the range of legislative and administrative measures being taken in response to the cost of insurance working group, along with others in detailed preparation.

In addition, it is increasingly evident that insurers are making much greater efforts under existing law to crack down on suspected fraudulent claims. They recognise that the short-term costs incurred will be significantly offset by the long-term value of deterring fraud. A number of recent high-profile court judgments have left no doubt about the legal consequences of insurance fraud and the legal sanctions that apply. There is no room to rest easy about this. The key responses include the new Personal Injuries Assessment Board (Amendment) Act 2019, which was commenced on 3 April last. This Act will reinforce the Personal Injuries Assessment Board process. New guidelines for the reporting of fraudulent insurance claims to An Garda Síochána have been published. The act of recording statistics on insurance fraud is now taking place on the Garda PULSE system.

In its 2017 report on motor insurance, the working group on the cost of insurance sought to bring about further co-operation between An Garda Síochána and the insurance sector in respect of insurance fraud investigation. This included the possibility of a dedicated Garda insurance fraud investigation unit, which would be funded by the sector. As the House will be aware, the Garda Commissioner indicated in December 2018 that his preference, in principle, was that the force, in addressing this matter, would not be funded by any source other than the Exchequer. I understand the Garda Commissioner has indicated that he is continuing to look at establishing an improved investigative capacity within An Garda Síochána to tackle this key area while taking account of factors such as the availability of resources and competing demands.

In parallel, significant progress has been made on enhancing the level of engagement and co-operation between An Garda Síochána and the insurance industry. Part of this arose from the fraud round table, which was hosted by the Department of Finance with stakeholder consultation. This has resulted in a working commitment between the Garda National Economic Crime Bureau and Insurance Ireland's anti-fraud forum to meet regularly to discuss and act on current and ongoing issues which arise in the area of insurance fraud.

In response to a recommendation set out by the working group on the cost of insurance in its January 2018 report, the Law Reform Commission, LRC, is conducting a detailed analysis of the possibility of developing constitutionally sound legislation to delimit or cap the amounts of damages awarded by a court in respect of some or all categories of personal injuries. This forms part of the LRC's fifth programme of law reform, which was approved by the Government on 20 March 2019. I understand that the LRC is giving immediate attention to this project and aims to publish an issues paper before the end of the year.

It should also be noted that in its final report, which was published in July 2018, the Personal Injuries Commission, which is chaired by the former President of the High Court, Mr. Nicholas Kearns, noted this development and expressed the belief that the LRC is the appropriate body best equipped and best resourced to undertake this study. The commission has recommended that the future judicial council should be assigned under its statute the function of compiling guidelines for appropriate general damages for various types of personal injury. It has said that pending the introduction of such legislation, the Judiciary should participate with representatives of the Personal Injuries Assessment Board and the Department in the formulation of guidelines as to quantum in cases of claims for damages in respect of soft tissue or whiplash injuries. These matters are under consideration between the Minister for Justice and Equality and the Chief Justice. The Judicial Council Bill 2017, which has completed Committee Stage in the Seanad, will also provide for judicial training in this area.

The Central Bank (National Claims Information Database) Act 2018 was commenced on 28 January 2019, on foot of a recommendation made by the working group on the cost of insurance, to facilitate a more in-depth analysis of annual trends in motor insurance claims. This was seen as key to developing an understanding of the impact that claims and their costs are having on premiums. A data subgroup chaired by the Department of Finance was set up to oversee the development of the database and the underpinning legislation. The availability of information collected under this legislation allows policymakers to have a better understanding of the factors that influence the cost of insurance.

A cursory consideration of the various outputs - I draw the attention of Deputies to the latest update from the cost of insurance working group, which has been published on the website of the Department of Finance - will confirm that a concerted policy approach is being taken by the Government to address insurance costs and insurance fraud. Departments, Government agencies, the insurance industry and the wider business sector are on board. The Judiciary, the courts and the law enforcement agencies have engaged in a manner appropriate to the independence of their functions. Consumers are engaging to ensure they get a fair deal on insurance at the level of enterprise or as private citizens. We have a whole series of mutually reinforcing measures in play. It is intended that their collective implementation will give greater effect to the law and to the regulation of this area. We must achieve this in a way that can better serve bona fide insurance consumers and legitimate claimants while deterring and penalising fraudsters. The insurance sector itself needs to come on board as well. It needs to take a more determined approach to finding viable ways of providing cover in neglected or deserted areas of enterprise and community activity, which are being hit so hard from an insurance point of view at present.

Given the convergence of today's Bill in relation to avoiding an injustice with section 26 of the Civil Liability and Courts Act 2004 and with the ongoing programme of action being taken by the Government, the Minister, Deputy Flanagan, is looking forward to working with Deputy Michael McGrath to make progress on the issues concerned. At the same time, it has been set out that there are fundamental policy, legal and constitutional issues that need to be placed on a clear footing if the making of orders of costs in the manner being proposed under this Bill is to happen without unintended consequences.

9:55 pm

Photo of Mary ButlerMary Butler (Waterford, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I welcome this opportunity to speak on the Civil Liability and Courts (Amendment) Bill 2019. Fianna Fáil has consistently called for the insurance market to undergo much-needed reform. Unfortunately, this has not been reciprocated by the Government. This is evident in its reluctance to tackle the issues of insurance costs and insurance fraud. Small businesses, in particular, feel the effects of increasing insurance premiums head on. Many small local businesses, such as shops, pubs and farms, have incurred huge increases in insurance costs in recent years and are no longer in business as a result. Many people fear for the future of their small businesses due to increases in insurance costs. We are still waiting on the establishment of a dedicated Garda anti-fraud unit, a national claims information database and a judicial council to provide guidelines for general damages relating to personal injuries.

I am the Chairman of the Joint Committee on Business, Enterprise and Innovation, which decided last year to look at the cost of doing business. Deputy Quinlivan referred to this major issue for competitiveness, especially for small and medium-sized enterprises. A wide range of issues were presented to the committee. The increasing cost of insurance was cited to the committee as one of the main issues affecting the cost of doing business. Among the reasons advanced for the increases in premiums were the increasing levels of awards, insurance fraud and the ensuing legal costs. The level of fraudulent, false or exaggerated claims was highlighted as a major concern by a large number of stakeholders. A number of witnesses told the committee that in the current system, there is little disincentive to make fraudulent, false or exaggerated claims.

The Irish SME Association, ISME, called at the joint committee for a statutory offence of perjury to be introduced so that statements of claim to the Personal Injuries Assessment Board would have to be made under an affidavit of verification. The committee heard that perjury is a common law offence in Ireland. We were told that levels of investigation and prosecution are very low, with just eight convictions since 2005. The committee recommended that the Government should examine the feasibility of updating the law on the offence of perjury.

Many citizens make injury claims. While the vast majority of these claims are made in good faith, we cannot overlook the issue of fraudulent claims. Section 26 of the Civil Liability and Courts Act 2004 outlines the guidelines surrounding fraudulent and exaggerated claims. It provides that it is an offence knowingly to give false or misleading information throughout the course of a claim. If a claim is dismissed under section 26, a cost is still incurred by the defendant. It is very expensive to defend a case in the courts. This deters many people from wanting to defend a fraudulent claim. For this reason, the Bill suggests that where a case is dismissed under section 26, the claimant will have to pay the legal costs of the defendant in question with discretion from the court. This will compensate defendants while significantly reducing the number of fraudulent claims by acting as a hindrance to those who are considering making dishonest claims.

We can suggest many measures to tackle increasing insurance costs and insurance fraud. Without follow-up action, however, we will not see the benefits of these implementations. It is unacceptable that we are still without a dedicated Garda unit that is specifically tasked with fighting insurance fraud.

This was one area the committee examined. The Alliance for Insurance Reform calls specifically for the establishment of a Garda insurance fraud unit. The cost of insurance working group recommended examining the feasibility of a specialised and dedicated insurance fraud unit within An Garda Síochána. Insurance Ireland also supports in principle an independent Garda fraud unit. The committee recommended the establishment of a Garda insurance fraud unit.

Most people are honest and make claims when it is justified. Indeed, there are many who do not claim when they could. There are, however, a few who take advantage of the high personal injuries awards available in the Irish system. There is absolutely no deterrent for those who do this. This practice is a consequence of the level of awards in Ireland, which is way out of sync with that in other jurisdictions.

The costs to businesses as a result of insurance fraud and an insurance fraud culture that has escalated have cost us all. Is now time for action. This Bill should seriously be considered by all parties and none as a start.

10:05 pm

Photo of Barry CowenBarry Cowen (Offaly, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I thank all those who made a contribution to tonight's debate following our introduction of the Bill. I thank the Minister for Justice and Equality and his colleague, the Minister of State, Deputy Cannon, for their contributions. I acknowledge their commitment, and that of Sinn Féin and others, to not opposing this Bill. I acknowledge the commitment of the Minister to seek to further strengthen the Bill, amend it and work with us to ensure it has the full support of both parties and ultimately, all representatives of the people.

It is now time for action. We have seen the publication of reports as far back as 2017. They have contained various recommendations, which were acknowledged and appreciated but questioned regarding implementation and associated legalities. It boils down to three issues being addressed. The first is the bill of quantum in regard to the judicial council. Eventually this matter found its way into the Oireachtas, despite procrastination and obfuscation by many and the blaming of other legislation, including the Judicial Appointments Commission Bill. Be that as it may, the commitment that was given, again on foot of a motion we brought before the House on the issue, has been honoured in the first part. I acknowledge again the commitment on the part of the Minister to deal with the issue in a timely fashion to ensure the issue is back before this House because we cannot preside over a system that continues to award five times more than what is awarded in the United kingdom, for example.

The other objective is to strengthen legislation to ensure fraudulent claims are dealt with appropriately by the courts and that proper deterrents are put in place to ensure fraudulent claims do not arise in courts as regularly as they have done to date. If one were to decide whether to rob a bank or initiate a fraudulent claim, one would conclude it is much easier to initiate a fraudulent claim. One will get much more out of it and there are no consequences if it fails. The book is thrown at one in the other case, and rightly so. It should be thrown at one in both cases. We hope that the Minister's word on this Bill is good to ensure existing legislation will be strengthened. I am aware that the Minister said there are sections in the 2004 Act that seek to do what we propose to do here but they do not do so effectively. If they did, we would not be introducing this legislation. Eventually the Minister acknowledged this Bill will strengthen, enhance and augment existing legislation. If that be the case, so be it.

The Minister said he hoped there would be an announcement in the coming weeks on the role An Garda Síochána can play and the role a fraud unit within the force can play in ensuring fraudulent cases are brought before the courts. Existing penalties, although we recommend augmenting them further, would be quite sufficient if they were not touched but it is a matter of bringing the cases to the courts. An Garda will not be found wanting if it is adequately resourced and funded.

Two years ago, the Government first acknowledged the failings on its part to protect its citizens adequately regarding how they were being treated in respect of insurance, not only business insurance but also motor insurance. Two years later, we still do not have the three-pronged attack nailed down. For our part, contrary to what the Taoiseach might say in his public pronouncements on Fianna Fáil's initiation of policy, we have not been found wanting in introducing adequate and proper legislation and debating it in the time allotted to us to so do.

I take the Minister at his word. It is many years too late but it is never too late to do the right thing. In this case, it is imperative that the Minister act quickly so we can all go back to our constituents and say that, further to the reports initiated two years ago and the recommendations contained therein, there is a three-pronged attack I have laid out that can now be put into effect to ensure affected individuals have a chance in business and can survive and thrive.

Question put and agreed to.

The Dáil adjourned at at 9.35 p.m until 10.30 a.m. on Wednesday, 17 April 2019.