Dáil debates

Wednesday, 5 October 2022

Personal Injuries Resolution Board Bill 2022: Second Stage


3:22 pm

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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I move: "That the Bill be now read a Second Time."

Tá áthas orm an Bille fán mBord um Réiteach Díobhálacha Pearsanta, 2022 a thabhairt os comhair an Tí. Is Bille tábhachtach é seo a sheachadann an gealltanas sa chlár don Rialtas an Bord Measúnaithe Díobhálacha Pearsanta, PIAB, a fheabhsú agus a athchóiriú.

I acknowledge and pay tribute to the significant work undertaken by my colleague, Deputy Robert Troy, in conceiving and developing this Bill. The former Minister of State's leadership in this area and his work with stakeholders in recent months has resulted in the Bill we are introducing today. I also thank the Joint Committee on Enterprise, Trade and Employment under its Chairman, Deputy Maurice Quinlivan, for its pre-legislative scrutiny of the general scheme of the Bill and its recommendation for its swift passage. I hope to work with the committee on this in the coming days.

The Bill will complete action 19 in the Government's action plan for insurance reform. Good progress is being made in the action plan, with approximately 80% of the actions now being delivered. Significant actions already completed include the introduction of the new personal injuries guidelines, the enactment of legislation to strengthen laws on perjury and the establishment of an office to promote competition in the insurance market.

The PIAB process is much more cost-effective and efficient than litigation. The purpose of the Bill is to amend the Personal Injuries Assessment Board Acts 2003 to 2019 to increase the number of personal injury claims resolved by the board without recourse to litigation. PIAB assesses claims for compensation arising from personal injuries sustained because of a motor, workplace or public liability incident. PIAB provides a fair and transparent assessment process in which personal injury claims are resolved in a straightforward and efficient way. The model is a positive one for society as it delivers compensation more quickly, with lower costs and predictable outcomes. The recent report of the Central Bank on employers' liability, public liability and commercial property insurance shows that from 2015 to 2020 the average settlement time for injury claims through PIAB was 1.8 years, compared with 4.5 years through litigation. The report also shows that for the same period the average legal costs for employers' liability claims of under €100,000 settled by way of PIAB was €562, compared with €18,290 for a litigated claim, despite the average compensation being similar. The benefits of the model are clear. However, I believe we can and must do more to resolve claims without recourse to litigation. The model can be strengthened to resolve a greater number of personal injury claims. This view is shared by a range of stakeholders.

The Bill will establish PIAB as a new and enhanced personal injuries resolution board. Central to this will be the introduction of mediation as a new service to resolve personal injury claims. Mediation offered by the board will follow the recognised principles of mediation, including being a fully voluntary process, ensuring confidentiality and impartiality and providing the opportunity for the parties to determine the issues that require resolving. Where the parties do not consent to mediation, the existing process in respect of assessment of a claim remains.

An advantage of mediation is the ability for parties to get speedy access to a process that may produce a satisfactory and agreed outcome for the parties in a short time. Mediation is already successfully used by bodies such as the Residential Tenancies Board, the Workplace Relations Commission and the Financial Services and Pensions Ombudsman. It serves as a way to facilitate the resolution of issues between parties, and my proposals are modelled on existing legislation in respect of these bodies.

The Bill contains several amendments to enhance the role of the board with regard to promotion of its work, as well as data analysis and reporting, and it allows for the retention of more complex cases, such as purely psychological ones, by the board. The Bill also provides for the issue of costs should a case proceed to litigation.

The Government is introducing a new provision to strengthen the process by making it an offence to provide false or misleading information to the board. This should increase confidence in and strengthen the process, which relies on accurate and truthful information for its just and proper operation. I thank Senator Mullen for his contribution to this part of the Bill.

It is important to note that the reforms listed in the Bill, including the introduction of mediation, will not prolong cases. The board will remain obliged under section 49 of the Act to assess claims within nine months of confirmation of the respondent's consent to the assessment process, notwithstanding exceptional circumstances provided for in the legislation.

I will now summarise the main provisions of the Bill. Section 2 provides for the name of the body to be changed to the personal injuries resolution board to reflect the new functions of the board.

Section 3 sets out the application process to allow claimants to make an application for mediation, assessment or both, and the mandatory elements, including the requirement to supply a personal public service number or alternative identification.

Sections 4 and 5 provide for the notification by the board of a claimant's application to the respondent and to ask whether the respondent consents to mediation, assessment or both, and provides for the procedures to be followed by the board afterwards.

Section 6 provides that where a respondent consents to mediation or assessment, or both, of a relevant claim or is deemed to consent to assessment, these are not considered to be an admission of liability with regard to the relevant claim. Section 7 expands the types of claims that will be considered by the board by removing the discretion for the board not to make an assessment for claims of a wholly psychological nature or where a long-term prognosis is not yet available. Section 8 extends the provisions relating to presumption of capacity of both the claimant and the respondent regarding the making of an assessment to also include mediation. Section 9 introduces a new chapter 1A into the principal Act. It contains six sections, namely, sections 18A to 18F, which introduce mediation as a new service to resolve claims under the board's process. The section details the mediation process and outlines how a mediation is completed. An unsuccessful mediation will move to assessment where a respondent has consented to same.

Section 10 updates the reference in section 19 of the principal Act to provide for mediation. Section 11 provides that the board, with the consent of the Minister, may make regulations to impose charges in respect of its services. The section provides that where a respondent has failed to pay the relevant fee to the board in the required timeframe, the board can apply an additional administrative charge.

Section 12 amends section 38 of the Act and sets out that where a monetary value has been agreed in mediation, the board will issue an order to pay. It also provides for an order to pay to include any outstanding charges payable to the board by the respondent. Section 13 sets out the procedure to be followed where a claimant withdraws consent previously given to the board to retain a claim past the statutory timeframes set out in section 49 of the Act.

Section 14 enables the board to retain claims where, based on a medical report, a long-term prognosis will not be available under the nine-month statutory timeframe. It provides for a period of up to two years in addition to the nine months for a long-term prognosis to become available. Section 15 provides that the extended time allowed for a long-term prognosis to become available, as provided for under section 14, will be included for the purposes of pausing the Statute of Limitations. This will apply while claims are with the board and for a period of six months after the board issues an authorisation.

Section 16 is noteworthy. The purpose of the section is to encourage greater acceptance of awards by the board, particularly as both the board and the courts must now assess personal injury claims under the personal injury guidelines. It sets out procedures for a claim that has left the board following an assessment, been accepted by the respondent but rejected by the claimant, and proceeded to litigation. Where a claimant brings proceedings in such circumstances, no award of costs may be made in favour of the claimant where the award does not exceed the board's assessment. The section also provides that the assessment value will be deemed to be an offer of tender of payment made by the defendant as of the date the respondent accepted or was deemed to have accepted the assessment. This serves to limit, in certain circumstances, the level of costs that a respondent may have to pay from the point of the acceptance date.

Section 17 provides for four new functions to be accorded to the board. These are to facilitate the resolution of claims through mediation; to collect and publish information relating to personal injury claims, including awards made under the personal injuries guidelines; to conduct or commission research, analysis or studies on matters relating to the function of the board; and to promote awareness of its role and the benefits of resolving claims through the board.

Section 18 extends the requirement for certain persons to provide information to the board. Section 19 provides that the board may report suspected offences to An Garda Síochána. Section 20 provides that the board shall provide the Minister with information about the performance of the board's functions.

Section 21 sets out that the provision of false or misleading information to the board by a claimant, respondent or a third party is an offence. Section 22 provides for the exclusion of the mediation process from the provisions of the Freedom of Information Act 2014. This is required as mediation is a confidential process.

Finally, section 23 provides the Short Title of the Bill as well as the citation and makes provision for enactment by statutory instrument.

The Bill has been developed through extensive engagement with consumers, businesses, community groups and bodies such as the Alliance for Insurance Reform. The resounding message from all is the urgent need for reform. This Bill delivers reform while respecting the fundamental right of access to our courts.

We all know that the cost of claims is a driver of insurance premiums. This Bill will increase the number of claims settled through an enhanced resolution process and will reduce the cost of claims. This will impact positively on the cost of insurance, which is vital for so many groups across our country, as acknowledged by the joint committee. As I know from my recent meetings with stakeholders on this legislation, it is important that this Bill is now enacted.

Táim ag tnúth le díospóireacht na dTeachtaí le linn don Bhille a bheith ag dul ar aghaidh tríd an Oireachtas. I commend this Bill to the House.

3:42 pm

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

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

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

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

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

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

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

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

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

3:52 pm

Photo of Maurice QuinlivanMaurice Quinlivan (Limerick City, Sinn Fein)
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I am pleased to speak on the Bill. I thank everybody who has been involved in bringing it to where it is today, especially the former Minister of State, Deputy Troy, who presented it to the committee and championed the Bill. If implemented and resourced correctly, it has the potential to reduce the costs involved with insurance claims and pass on premium savings to customers.

The Joint Committee on Enterprise, Trade and Employment, which I chair, in its report on the Bill, which was launched in July, recommended a swift passage of the Bill and urged that the concentrated focus on the different insurance reforms should continue. The committee report also said it was encouraging to see a new system of quantum of damages bringing down the level of settlements. However, the rates of litigation are still too high and the proposed Bill should allow more to be settled by PIAB. The committee report also stated that efforts must continue to achieve greater transparency in the sector, greater competition for the benefit of consumers and greater consistency in claims handling to reduce unnecessary costs.

The critical thing with the Bill is resources. At a time when families and businesses across the State are facing immense pressures due to rising energy and fuel costs, it is welcome that we have the opportunity to debate a Bill that should and must help to alleviate a particular expensive cost that businesses, house owners and motorists face, namely, insurance. The personal injuries guidelines have over the last year significantly reduced the cost of claims for insurance companies but it is vital that these reduced costs are passed on to customers, many of whom have been fleeced and gouged by some companies over the years. Premiums must be reduced for customers. Reducing costs for consumers, businesses and local sports and community groups has to be an outworking of this Bill. Reducing premiums is one of the key reasons we in Sinn Féin have worked, campaigned and lobbied so hard for insurance reform for years.

We welcome the main tenets of the Bill, namely, to increase the number of claims settled through PIAB so as to reduce expense, time and stress in many cases; to introduce the option of mediation in insurance claims, with parties given the option of consenting to mediation facilitated by the personal injuries resolution board, PIRB; and to allow for the assessment of more complex injury cases, including those of a psychological nature. These are welcome objectives. Its performance has shown that PIAB is a successful independent State body in assessing personal injury compensation claims.

Concerns have been raised in some quarters about whether the mediation option will add bureaucracy and costs to the PIAB process. We appreciate that concern and anticipate examining this aspect of the Bill in more detail via scrutiny on Committee Stage. As Deputy O’Reilly said, we will probably put down amendments. Ultimately, assessing insurance claims through PIAB is a quicker and cheaper option through which to make insurance claims. In 2020, it was estimated that the cost of litigation was €16,064 but that, if done through PIAB, the average cost is €841, which is a massive difference. From a time perspective, the amount of time to settle reduces on average from 4.2 years through litigation to 2.3 years through PIAB, which will greatly reduce the stress for people.

We in Sinn Féin have constantly advocated the strengthening of the powers of PIAB as a method of reducing the legal costs in claims settlement. This Bill is overall a positive step in the reform of the claims landscape following the adoption of the personal injuries guidelines in 2021. PIAB has shown itself to be successful in self-financing but it is important, if this Bill is enacted, that it continues to have the resources it needs to improve its performance and the volume of disputes it can assess, thereby avoiding costly litigation. Extending the authority of PIAB to resolve claims should result in further reductions in both time and cost of claims. When this is achieved, I repeat, these savings must result in reduced premiums.

I welcome the Bill. It will, of course, need further scrutiny on Committee Stage but it has the potential to introduce some positive changes, which is welcome. However, we still need action on premiums being charged by insurance companies as these are having a detrimental impact on many businesses and sporting and cultural organisations across the State. Any of us involved in local voluntary groups or community festivals will understand that many have been cancelled or reduced. I am involved in the St. Mary's festival, which had a regatta from the 1930s but, in the last couple of years, it has had to exclude children because the organisers could not get insurance at any cost. In conclusion, I commend the Alliance for Insurance Reform, my colleague, Deputy Doherty, who has championed insurance reform and others who have championed the need for insurance reform for many years. This is one step in that direction.

Photo of Réada CroninRéada Cronin (Kildare North, Sinn Fein)
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I am happy to speak on this stage of the Bill and thank everybody who has worked on it so far. As the House will be aware, my party works all the time to support and strengthen the rights of citizens with regard to institutional, corporate or Government bodies where the balance of power and, therefore, the balance of financial and professional resources is automatically not in their favour. One of the reasons we have continually advocated for the powers of PIAB to be strengthened is that, in doing so, it will reduce the legal costs involved in claims settlements. When it comes to personal injuries actions, how many times do we hear in conversation that the lawyers are laughing all the way to the bank, and when they are not laughing, they are counting? While I am in favour of all work being paid well for a job well done, we are equally aware of the need to reduce legal fees where possible, particularly when there is a cost to the citizen and to the public finances, which is the result of the citizens’ hard work. That is to be used for the people's need and good. Avoiding unnecessary litigation through PIAB intervening early to facilitate early and fair agreement on both sides, so additional costs can be minimised or avoided, is something worth protecting and strengthening.

My colleagues will address other aspects of the Bill but I would like to look at the proposed mediation element of it and, if there is time, to refer to the inclusion of psychological injury. In case those in IBEC are listening, I would love to know how they think victims of domestic violence can take out their psychological injuries and show them. Before I discuss mediation, I would like to mention that I have been meeting representatives of small businesses in my constituency of Kildare North over the last couple of years. They are dealing with huge insurance costs. While some of these claims can be thrown out at the end, in the meantime their insurance costs have rocketed and it is crippling them financially, and also slowing down real injury claims for honest people. Irish people have a great sense of fair play. I believe that mediation will go a long way to resolving some of those issues.

Mediation by mutual agreement, as allowed for in the Bill, is something to be welcomed, albeit, as Deputy Louise O'Reilly said, on a qualified basis. Anyone who has had any dealings with the law, court cases or injuries claims knows how exhausting and stressful it is. I have lost count of how many times I have heard people, in particular when dealing with the State, say that all they really wanted was an apology. Institutionally, an apology can be seen as a liability and, too often, both sides feel they have to get lawyered up. Only at the end of a long, costly and destructive litigation does the State issue the apology anyway, along with the compensation which sometimes was not looked for in the first instance. If mediation allows for the State in particular to apologise as opposed to defending the indefensible in court, as it has done too often simply because it has limited public funds to do so, pushing the citizens to their limits, I am all for it once it is managed correctly. If there are any good, fair and humane mechanisms that we can use to get in early, get the two sides talking and, more importantly, get them listening to each other under an expert mediator who is trained in the law and in human need, expectation and behaviour, it is to be welcomed. It is a big “if”, but if it is managed correctly, no greater costs should accrue.

The fact that, internationally, mediation is becoming a sought-after area of specialist legal study and practice is testament to its success for both sides and for legal representatives who are not out for all-out war on behalf of their clients. If we mediate well, we can manage human situations well.

I am glad to see that the Bill seeks to extend the powers of PIAB and PIRB to assess more complex injuries that would include psychological injury.

There is less humanity in this approach, given that the worst and deepest injuries can sometimes be the ones we cannot see. IBEC should remember that. Litigation can be psychologically damaging and, therefore, any decent method of addressing injury through this process is to be welcomed.

As Deputies O'Reilly and Quinlivan have stated, our support is qualified and we will table amendments on Committee Stage. The mediation process must demonstrably reduce costs. Some fear that this additional layer could create extra delays and costs within the PIAB process once the mediation segment is factored in. Were that to happen, it would be the polar opposite of the Bill's purpose. The Bill's provisions have excellent potential if managed correctly, but we will examine the detail of the how and the how much.

4:02 pm

Photo of Jennifer Carroll MacNeillJennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
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I welcome the opportunity to speak on the Bill. I am glad its focus is on mediation, which reduces stress and cost and helps to manage a process better overall.

Many Deputies have spoken on the Bill, but I wish to speak on a related matter of litigation, that being, the Comptroller and Auditor General's report, published last Friday, on the 2021 accounts of the public services and specifically chapter 20 on the management of the clinical indemnity scheme. I will first declare a personal interest in the scheme's management. This was a subject that was considered with the State Claims Agency by the Committee of Public Accounts many months ago, where Deputies challenged the agency on the funds it expended on litigation, the overall awards, the management of litigation on behalf of the State and the management of the ongoing risk to the State. It is a considerable liability. One of the challenges is to reduce risk even further in hospitals so that there are not only fewer cases for the State but, more important, fewer incidents that affect people's lives. As I told the Leas-Cheann Comhairle when entering the Chamber, and the Chairman and clerk to the Committee of Public Accounts, I have experience in this regard. One of the key pieces of exposure to the State is that of catastrophic birth injuries as well as birth and maternity injuries more generally. I have an active case with the State, which I wish to declare. Obviously, it gives a better understanding of some of the challenges.

A key element of the Comptroller and Auditor General's report has to do with the national incident management system, NIMS. The most costly and devastating injuries that happen in hospitals are those that happen in maternity hospitals to women - Deputy Cronin referred to psychological injuries as well - and babies. The exposure to the State can be large. The committee's concern was that we kept seeing a pattern of cases, be they involving brain injuries or cerebral palsy, and we wanted to know what the State Claims Agency was doing to hold the hospitals to account. Where were the patterns and were certain hospitals more problematic than others? The House will recall that Dr. Peter Boylan published a good report in 2016 on maternal deaths and injuries in the State, focusing on Portlaoise and other hospitals. The committee wanted to know what was going on and how to ensure it did not happen again.

There are many cases of birth injuries and deaths. It is frustrating to be a parent who is part of that community and to see this issue arising time and again in the same hospitals. One wonders whether anything will ever change. Our challenge to the State Claims Agency was to ask how it was interrogating the NIMS. The Comptroller and Auditor General has issued a brilliant response on the issue. He analysed the NIMS and wrote:

Overall, in the period 2017 to 2021, only 25% of claims received [by the State Claims Agency] had previously been reported by the DSAs as incidents on NIMS prior to claim notification.

Of the 75% of claims not previously reported ... the SCA concluded that - in 22% of cases, there was insufficient information available to determine whether or not the incident should have been reported;

- it was reasonable for the incident giving rise to the claim to have been recorded on NIMS in 21% of cases ...

- in around one third of all cases (32%), the DSA would not have been aware of the incident ...

It is clear that at least one fifth of those cases that ultimately turned into litigation cases for the State should have been recorded. It is only when hospital management is put under pressure in its responses that we get the opportunity to change the culture.

We challenged the scale of the cerebral palsy injuries. According to the report, 60% of claims with the State Claims Agency arose from maternity cases. That is 60% of the State's liability arising just from maternity hospitals. As members of the Committee of Public Accounts, we hold the health service to account more broadly. From a personal perspective, though, every one of those cases is life altering for the babies and families concerned. Every Deputy in the Chamber knows a case of that kind. None of those families who have to litigate their claims want to be in that situation or to go through the process of having report after report done on their child just to try to reach a balance where they can fund the child's altered life as a consequence of the injury.

The cerebral palsy cases represent €1.4 billion of the €3.4 billion liability, or 41% of the overall claims. At the end of 2021, there were 163 active cerebral palsy claims related to maternity services. It takes longer to finalise those cases, lasting up to approximately five years. That is five years' worth of stress, as the House can imagine. As such, the sooner the State Claims Agency moves en masseto the mediated system, which is a central part of this Bill, the better. Of course, claims must undergo appropriate due diligence, but mediation is always a better system.

In 2021, there were 335 active cases relating to catastrophic injury, with an estimated outstanding liability of €2.4 billion. The average liability per catastrophic injury claim is €7.2 million compared to €300,000 for other clinical negligence claims. It does not make for good reading, particularly when you know what is happening more intimately, but it is the basis from which we can start to hold the hospital boards more accountable for what happens within their hospitals. The Committee of Public Accounts was told by the State Claims Agency that there were approximately 26 cases of cerebral palsy every year and that this was in or around the average internationally. I know that the agency did not mean that heartlessly, but that is 26 families and 26 children. We know that it is not the case that some of them are unavoidable. We know that there are many cases in which mistake after mistake was made. More often than not, the women were simply not listened to in a maternity hospital of all places. The figure of 26 must be reduced, not just from the perspective of the State's liability, but from the perspective of each of the families and their children that will be affected.

Photo of Patricia RyanPatricia Ryan (Kildare South, Sinn Fein)
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The purpose of the Bill is to amend the Personal Injuries Assessment Board Acts to facilitate an increase in the number of personal injury claims that may be resolved through the board's process and without recourse to litigation. It is to be welcomed that we will free up our courts to deal with more serious cases. Encouraging more claimants and respondents to avail of the board's model through mediation or assessment should lead to cost savings in the claims environment and contribute to reductions in insurance premiums. I say "should", but last year a Sinn Féin survey found that 58% of respondents who had received their renewals since the new personal injuries guidelines came into effect actually saw their premiums increase. As such, the House might forgive my scepticism. We heard previously from a Minister of State that the Government was engaging directly with insurers to hold them to account and to ensure that savings were passed on to customers following the introduction of the personal injury guidelines. The evidence shows that this approach has failed.

My colleague, Deputy Doherty, has introduced a Bill that would require insurance companies to show how they were passing savings on to their customers. The Bill would require the insurance industry to provide information to the Central Bank outlining how the cost of claims had reduced as a result of the new personal injuries guidelines and how insurers had passed those savings on to their customers euro for euro. Irish consumers have repeatedly been ripped off by insurance companies that have put their customers at the bottom of the pile. It is about time that we held the insurance industry to account.

The Bill places an increased emphasis on the resolution of claims through an amended personal injuries framework that facilitates mediation and assessment as a means of resolving personal injury claims. The proof of the pudding, though, will be in the eating. The Government needs to monitor this carefully. Sinn Féin's legislation requires just this, namely, the publishing of a report on the effects of the previously introduced guidelines and that consideration be given to the report when framing future legislation.

Nobody has done more work to prevent insurance customers being ripped off than An Teachta Doherty. We all remember the joint committee meeting where claims of widespread fraud were made until An Teachta Doherty asked how many cases had been reported to the Garda. Insurance reform is badly needed and real action is needed to strike a fair balance in this regard. In government, Sinn Féin will deliver the necessary action.

4:12 pm

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

4:22 pm

Photo of Colm BurkeColm Burke (Cork North Central, Fine Gael)
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I thank the Minister of State for the Bill bringing forward.

While there has been a drop in the cost of insurance, I am wondering if the cost of insurance could have come down more in view of the fact that the average PIAB award has decreased by 42% to €13,525. We have not seen the same decrease in insurance costs. It is something that we need to get a far better response on from the insurance industry. In fairness, Departments over the past number of years have brought forward legislation to assist in making the process cheaper to access and the cost levels are not the same. It is important that we get an adequate response from the insurance companies, and I am not satisfied that we are.

The issue the Bill does not cover is claims against the State and against local authorities. We do not appear to get an overall breakdown per annum. While we might get some information from the State Claims Agency and while individual local authorities give it out to councillors, we do not get an overall yearly report for all the local authorities regarding the level of claims that they have paid out. For instance, I understand that if, in the morning, the State Claims Agency settled every claim currently pending against the State, including against Departments but also in respect of hospitals' medical negligence claims and medical practices that come under the State, it would cost between €4 billion and €5 billion. That is something that needs to be looked at as regards how we can introduce a better process for dealing with those claims, whether we can introduce mediation to a much more significant degree, whether there is a need to look at the structure of compensation in that area, and whether it should be confined to the present system of lump sum. We need to look at it.

Photo of John Paul PhelanJohn Paul Phelan (Carlow-Kilkenny, Fine Gael)
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I thank the Leas-Chathaoirleach and I thank Deputy Colm Burke for sharing his time.

I wish to make a few points on this important legislation. I welcome it and welcome the fact that some progress has been made over the past few years through various reforms in the insurance sector, and I also welcome the Minister of State, Deputy Calleary, back from his brief hiatus into office.

Some progress has been made in different aspects relating to the insurance sector. Deputy Calleary's colleague, the Minister of State, Deputy Fleming, may be directly responsible.

I acknowledge that the office to promote competition in the insurance sector in Ireland has been established but one of the glaring issues in so many aspects of insurance is the lack of competition between providers. In some sectors of the economy, businesses, in particular, are unable to get quotes at certain times when certain underwriters have pulled out of the market. Those problems seemed to have eased somewhat.

The personal injury guidelines, which were mentioned by Deputy Catherine Murphy and others, have kicked in in the courts but we only have to look at decisions of the courts on a fairly regular basis still to see that decisions made and awards granted are still varying substantially. Each case is taken on its own merits but one would have expected maybe a degree of uniformity to have emerged once the guidelines were put into effect. That has not really been seen to emerge yet.

This legislation is good in the sense that it proposes a number of extra powers for the PIAB, which has been a welcome arrival. It is almost 20 years in existence.

This legislation specifically allows for mediation, which is to be very much welcomed.

I disagree somewhat, maybe, with some of what Deputy Catherine Murphy said. Maybe I am picking her up wrong, but I think she spoke about punishing people who do not go down the route of the board. People still have a constitutional right to vindicate their rights in court. I do not think there should be any question of punishment. I am always more in favour of the carrot than the stick. If PIAB is working efficiently and its replacement now in the resolution board works efficiently and quickly and delivers an appropriate result, by its nature I think that would lead more people who would be potential litigants into taking that course of action. Generally, over the years, PIAB, in its previous incarnation, managed to achieve that. There were various bumps along the road.

I often find with constituents who have individual queries that there is a lack of knowledge from time to time among the general public as to what PIAB is and what it does. I am sure all the public representatives in this Chamber and elsewhere have at various times pointed constituents in the right direction. I welcome the fact that the Bill contains specific provision for that and I welcome the legislation in general.

4:32 pm

Photo of Ruairi Ó MurchúRuairi Ó Murchú (Louth, Sinn Fein)
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I also generally welcome the Bill. Why are we dealing with all this legislation? What is the idea of it? What is the benefit of the personal injuries resolution board? The whole idea is that we are creating a framework and a set of structures that will eventually lead to reduced premiums and that we have an functioning insurance market, because we do not really have that at the moment. That is the major problem.

The personal injuries guidelines were obviously a necessary step in the right direction. PIAB has seen a 42% reduction in payouts for personal injuries. That was a move that needed to happen. Obviously, we would like to think that people would avail of mediation from the point of view that anything that can be kept out of the logjammed courts system we have in this State should be kept out of it. We all know we do not need to add legal cost upon legal cost in circumstances in which people find themselves needing compensation. If a person is injured in a particular set of circumstances, he or she should have insurance coverage. We all know there are people who have been horrifically injured, and there is a need to ensure we have insurance for them.

There is a problem, however. If we are talking just about public liability insurance, we know there are businesses that can only semi-operate some of the services they operated previously. Some cannot afford to do otherwise. We talk about the cost-of-living crisis and we know the issues we have with accommodation, whether personal or business. One of the major costs that have hampered everything from businesses to community organisations to community premises and all sorts of sporting groups and so on is the high price of public liability insurance. That is where offers can be made. Anyone who has been at a public event recently would be shocked to see full use of a bouncy castle. We know that is a particular issue.

The problem is that we do not have enough players in the market. We know there are particular issues in that regard. We know there are still legislative moves the Government needs to deal with. We know the whole area of duty of care needs to be done and dusted. We need to get to a place where I am not dealing with community centres being quoted €11,000 or €12,000 for insurance premiums. Generally, we find out that there may be a claim, but the claim probably relates to four different outfits. It relates to a company, building or community voluntary organisation and it will not even matter at the end of the day. They will all deal with increased premiums. It will not be down to the one person who would be seen to be accountable. That is without even getting into the rights and wrongs of particular cases.

The Minister of State has a lot of work to do to deal with the whole area of insurance.

Photo of Neale RichmondNeale Richmond (Dublin Rathdown, Fine Gael)
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I appreciate the opportunity to share a few brief thoughts on this extremely important legislation, which I of course welcome. More importantly, not only do I welcome it, but I sincerely hope we see its passage through the Houses extremely swiftly because it is important that we see this come into place.

We think back to 2016 and the establishment of the cost of insurance working group and the 66 actions now being taken in this area. All those actions need to be undertaken and completed to address the very real and genuine concern across the entire insurance sector, driven not only by the Minister of State's Department but also the Department of Finance and the Minister of State, Deputy Fleming. I very much welcome and will reflect on the impact the personal injuries guidelines and the work of PIAB have had. I truly hope that, with the introduction of this legislation and, in due course, the personal injuries resolution board, we will see a greater move towards mediation and the level of payouts that will in turn see prices drop. That is why we are all speaking about this. The huge concern across all sectors is that insurance was so high and the choices so limited that it was putting businesses out of action and making it impossible for people to do very ordinary things. We have seen limited success so far, particularly when it comes to motor insurance and the 46% drop in premiums across the board. It does not end there, however, because there are still many areas that simply have not caught up.

With your discretion and indulgence, a Leas-Cheann Comhairle, I will speak to one specific area where the prohibitive cost of insurance and the lack of choice in the insurance market are preventing businesses from staying open in the sector and new businesses from entering the sector. I am speaking of the area of childcare, specifically in respect of the provision of crèches and Montessori schools. Across the State we see people limited to one provider or one broker, and when that broker was not issuing new policies, they found themselves reliant on a British provider. There were so many schools and services across the country, no doubt in the Minister of State's constituency, just like in mine, that faced the very real prospect of having to pull out of the market. I do not know how it is in other constituencies, but certainly in mine, Dublin Rathdown, finding a place with a childcare provider, be it early years or after school, is extremely difficult. The prices are exorbitant. Only 81% of childcare providers in my constituency have signed up to the new funding model, Together for Better. That is a real challenge, and while there are many factors creating that challenge, the cost and lack of availability of insurance are among the most concerning. When we look at the whole area of insurance and, more generally, financial services and the options being provided to businesses and individuals in this State, we genuinely have to ask why we have such limited choice when we are part of the world's largest economic bloc, the Single Market. I know this is probably more in the area of the Department of Finance than in the Minister of State's Department but, with respect, more needs to be done not only to encourage our own providers to stay open but to attract other providers.

Post Brexit, understandably, a lot of fuss was made about the fact that so many financial services sector jobs, particularly in large insurance firms, were moving to Dublin because these firms wanted to ensure they could still passport into the Single Market. However, we are not seeing that trickle down to the individual choice of consumers, be they businesses or individuals, across all sectors. It is that choice in the market that will drive down premiums alongside reducing the level of payouts because the sector has not caught up with the legislation yet. We are not seeing enough premiums follow downwards. All the good work of PIAB and the personal injuries guidelines are not enough to drive down premiums. I sincerely hope this legislation, passed swiftly, will play another part in driving them down because some of the premiums businesses and individuals are being asked to pay in this State are absolutely scandalous. They would not be acceptable in other member states of the European Union. The sooner we as a Dáil collectively get behind legislation like this and pass it in a swift manner, the better.

4:42 pm

Photo of Martin BrowneMartin Browne (Tipperary, Sinn Fein)
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Any progress that is made in enabling the quicker and cheaper settlement of claims without having to go to the courts has potentially positive benefits for individual private customers and for businesses across Tipperary and nationally who are facing severe cost increases. It is Sinn Féin's desire that a properly designed Bill will assist in this by cutting down on litigation and getting the issue of compensation resolved quicker and at a lower cost. We have all seen too many instances of businesses closing or cutting back and community events being cancelled because of the high cost of insurance. The very fact that since the introduction of the personal injuries guidelines the average awards for personal injuries claims are down by 42% compared with 2020 shows the value of PIAB and a system for which Sinn Féin has long campaigned, where the deep pockets of insurance companies do not tip the scales in their favour. We need to ensure that this continues unabated in the expansion, through this Bill, of the work PIAB will do. If this is to be achieved, alongside a potential increase in the number of personal injury claims that can be resolved through PIAB via the introduction of assessment of injuries of a psychological nature, we have to ensure that this Bill is fit for purpose and is adequately resourced to allow PIAB to effectively do the work that is planned for it.

It was noted during the pre-legislative scrutiny process that more clarity is needed about how the dual purposes of assessment and mediation are addressed and dealt with within PIAB. The Minister of State noted that individuals would not work on an assessment and a mediation of the same case. Has the Department determined how many staff would be needed to facilitate this two-pronged approach to ensure PIAB is adequately staffed and does not become subject to a logjam? If what I have just mentioned results in mediation staff being outsourced, what steps are being taken to ensure they become as embedded in PIAB as possible to ensure that claimants have as much faith as possible in them being part and parcel of the PIAB and not subject to external influences?

It is also a fact that despite the positive work being carried out by the board, claimants still feel obliged to engage the services of a legal adviser in the mediation process. A full 29% of costs associated with settling injury claims between 2015 and 2020 were legal costs. Again, the Department indicated that consideration would be given to the issue of legal expenses still being incurred. Will the Minster of State expand on that and on what is proposed?

I support the strengthening of the role of PIAB. It allows for cheaper and quicker access to dispute resolution with the purpose of lowering insurance prices. However, we need to ensure this ethos is not forgotten in the course of refining and expanding its remit. For this reason, it is important that we place this Bill under as much scrutiny as possible. I appeal to the Minister of State to consider the contributions that all Members make to this Bill so that we can ensure that homes and businesses across Tipperary and nationally can benefit from the expansion in the role of PIAB, through their premiums and through the process of claim resolution.

Photo of Matt ShanahanMatt Shanahan (Waterford, Independent)
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As has been said a number of times already, insurance costs as a result of personal injury awards have been a blight on the Irish business landscape for a number of years. It is not stretching it to any degree to say that a lot of businesses have been on the verge of self-insuring in recent years. In actual fact, I know of some that were trading without insurance for a period because they just could not sustain the cost. We are still seeing businesses failing to secure adequate liability insurance and that is a significant problem going forward. I hope it is an issue that the Department will look at.

On top of that, we have also seen insurance companies exit the market. It is fair to say there has been a very significant lack of transparency in the market in terms of what the claims situation was like. That must be addressed, particularly now as we try to deliver insurance reform, which has been a very long time coming. I remember a previous Fine Gael Minister of State, who has come and gone, championing insurance reform in this House but it is only now that we are getting into the thrust of it.

My colleagues and I in the Regional Group have been active in this area. We have been working to try to improve the landscape and have liaised with businesses, particularly in the SME sector. We have pressed for the introduction of more significant perjury legislation. Perjury, unfortunately, has played a key part in a lot of compensation claims over the past number of years. We have seen CCTV evidence showing set-up traffic accidents, where people clearly were not in cars and yet they went into court and committed perjury by claiming they were passengers in vehicles. Hopefully that is coming to an end. Someone who has led on insurance reform in this country is Mr. Pat McDonagh of Supermacs. He was one of the first people to introduce video surveillance in hallways and close to toilets to show that people were actively trying to create slips and falls in order to avail of personal injury payouts. It has been a very significant problem and remains so.

I am sure the Minister of State is aware that there has been a reduction in motor premiums over the past 12 to 15 months, which has been put down to the ongoing work of insurance reform. What is amazing is that at the same time, insurance costs have risen for the business sector. That does not make sense. The claims environment does not reflect the premiums that a lot of businesses are paying. Some have never had a payout, yet they have seen their insurance premiums rise by 100%, 150% and 200% in the past year. There is still something fundamentally wrong with our insurance sector that needs to be tackled.

Everyone will agree that many low-level claims can be adequately dealt with outside of the courts system. With a working book of quantum, it should now be possible to apply transparency to many claims. We have seen that system operate across Europe and particularly in the UK. Our nearest neighbour has operated that system very well. However, it also remains the case that even after the recent judicial guidelines, the values in our book of quantum are still far in excess of those in the UK. That should be revisited in the coming years.

I welcome the Personal Injuries Resolution Board Bill which will, if properly supported, significantly reduce the cost of administering personal injuries awards and should, therefore, reduce the cost of liability insurance for individuals and businesses. However, my colleagues and I have a key concern which I raised at meetings of the Oireachtas Joint Committee on Enterprise, Trade and Employment, when we were looking at PIAB as part of the pre-legislative scrutiny process. A mechanism needs to be inserted in this legislation that will allow reforms to counter any unforeseen challenges to the operation of PIAB or PIRB into the future. Such a review mechanism is already built into the founding legislation of the Legal Services Regulatory Authority. There are three main components to which I draw the attention of the Minister of State. The aforementioned legislation allows that within 18 months, and not later than after each three-year period, a review of the operation of the Act is called for and that would be welcome in this case. It also provides that not later than 12 months after the review commences, a report is to be made to both Houses of the Oireachtas and findings, conclusions and any recommendations resulting are to be made to the Minister of the day. Again, this would be extremely beneficial to the operation of this legislation.

Beyond that, another provision is that recommendations under relevant subsections may include amendments to the Act, "including to part 7 of the Solicitors Acts 1954 to 2015 or any instrument made under those Acts" as the authority considers appropriate arising from such findings and conclusions. Finally the legislation provides that in conducting a review under this section, the authority shall consult with the Competition and Consumer Protection Commission, CPCC, professional bodies and such other persons as it considers appropriate for such purposes. I would like to see amendments being tabled along those lines for this legislation and I will certainly be looking to do that because we need to have an ongoing review of this legislation. We cannot just enact it and then assume it will be fit for purpose into the future. There are plenty of challenges still coming down the road in terms of the instigation of this legislation and we need to be able to ensure that it is doing the very thing it is supposed to do, which is to reform the delinquent situation we have had in this country for years in terms of personal injuries compensation.

I am happy to point the Minister of State to the references I have just mentioned. Another thing we need to do is stop some of the scaremongering that is being carried out by some parties who would rather not see this legislation being enacted fully. I refer to recent media reports that awards for minor injuries will not cover medical costs due to inflation. That is completely erroneous. Medical costs and other out-of-pocket expenses are covered under the special damages provision and are not affected by any recent reforms.

Some further public information needs to be put out there to show that this Bill has been worked on for quite a period of time - perhaps too long - but at least we now seem to be getting to something that is going to deliver reform.

Having considered the length of time we in this country have spent talking about insurance reform, we now have to be sure that what we are going to enact is fit for purpose and can be adapted in the future to deal with whatever difficulties may come down the tracks. As I have said, I welcome where we are going with this Bill. I will table some amendments, but I broadly welcome the Bill.

4:52 pm

Photo of Seán CanneySeán Canney (Galway East, Independent)
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I am delighted to see Deputy Calleary here in his brief as Minister of State. I wish him well and I am delighted he is present to deal with such an important Bill for the country. I look forward to working with him on it and wish him the best of luck in his role.

When I was in the private sector, I engaged a lot with insurance and the construction industry. I saw claims come in and go out, and dealt with claims in the courts. The one thing I learned was that the day you went to court with a claim was the day you were losing, because the legal profession is an industry in itself when it comes to dealing with claims. We went to court on the basis that the claim was not right and was being manufactured or whatever. On two occasions, I went to court because I felt determined enough that we, as a company, needed to defend our honour and insurance record. Not every small business will go to the extreme of going to court and challenging a claim. That is a problem because businesses do not have the resources to do it or would prefer to do a deal and get on with things. The problem is that when people go to court and defend in a case, they will still not get the benefit of cheaper insurance because they have saved the insurance company money. They will just be another statistic for them to look at.

The Bill is a basis for good legislation, with a few exceptions. What we need to do is stop the gravy train for the legal profession. We need to make sure that whatever money is being spent on paying out insurance claims is going to somebody who has a genuine reason to be compensated. We do not want an industry around this to develop.

When I was in construction, I always found it baffling that there were multiple insurances covering the same risk. A builder had to take out public and employers' liability on a building while work was taking place. At the same time, the building contractor had to take out public and employers' liability on the same building. Every subcontractor had to have the same liability insurance in place, otherwise they would not be allowed into the site. A multitude of insurance premiums were being paid out to cover the same risk, which was a building and all of the activity within it.

At one stage, we tried to get umbrella insurance to cover everybody on a site for a client. The credit we received on our premium was so little that it was not worth changing the paperwork because the insurance company did not want a precedent to be set whereby fewer policies were needed to cover the risk. It is important that we realise that is going on and is costing our construction industry a fortune.

I am an active member of Belclare Community Council. Corofin Community Development Association and other community development associations across the country hold their breath when it is time to renew their insurance premiums because they do not know what it is going to be. A lot of small businesses are only trading because they have decided to do so for one more year. Given what businesses have been through with Covid, and what they are now going through with increased costs and all of that, it is important that when we put legislation place, it is effective and does something for people and not the insurance industry.

The Regional Group was cognisant of the fact that some people were putting in fraudulent claims. There were no consequences for those who were found to have said something fraudulent. That is being corrected, but the message needs to be driven home that we have to stop anybody who is even contemplating doing something like that in their tracks. We need a deterrent, rather than a penalty afterwards to stop people from doing such things.

There are two things that the Bill could improve. There is a fear on the part of business people, including Pat McDonagh of Supermacs, that by introducing mediation we will introduce further costs, delays and legal charges because legal people will want to sit at the table. If the Bill can make sure that does not happen, it is important that we do that. There is no point in having a process whereby there is mediation that is not binding. If there is mediation, it needs to be binding on the participants. That would be very important. It would mean that people go to mediation on the basis that they will have to accept the outcome. If they say they will not accept the outcome when they do not like it and can go some place else, we will then add another layer of costs to the process.

Another issue raised by AIR is the claims database. The claims database available at the moment is the property of Insurance Ireland, the umbrella organisation representing insurance companies in Ireland. We should consider having a claims database that is owned by the State and available to people in the industry who need it. Cases have been highlighted by AIR where insurance companies have been kept out of competition because there is somewhat of a closed shop. We have an opportunity and responsibility to make sure that whatever legislation is passed is effective. The Minister of State knows that the legislation we introduce to try to reduce the number of claims, make the claims process more efficient, ensure money gets to where it needs to go and reduce the high costs of claims does not always necessarily lead to reduced premiums. If we have an industry where people have a fair crack at competing, and know the rules of engagement and do not try to manipulate them for their own sake, we will have a more attractive market for other entrants to come in and offer insurance.

Certain cohorts in our society find it very difficult to get insurance. We also have to look at the idea of introducing national insurance, as we have for local authorities. It could cover people through State intervention to make sure they can do business and have insurance cover that will help them in any claim that might arise. At the end of the day, we have a plethora of different sized businesses in this country. A small operator with one machine to dig roads or whatever has to have the same level of cover as a large civil engineering contractor, in terms of the limit of liability he or she has. The terms and conditions have to be the same. We have to make sure that if a guy is digging across a road or boreen in County Galway or Mayo, his insurance costs are not so high that it is not worth his while doing that work and larger contractors have to be found to do such work.

We need to spread the cost to ensure there is a more efficient industry and make sure that the premiums that companies are paying make it viable for them to remain in business. I will examine the Bill. As my colleague said, we may table amendments but we will discuss that with the Minister of State's officials

5:02 pm

Photo of Richard BrutonRichard Bruton (Dublin Bay North, Fine Gael)
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It is often said that sunshine is the best disinfectant. One of the things the Government has done very successfully is change the debate about insurance, which used to be conducted entirely in the dark and there was a blame game with people pointing the finger at fraudsters, ambulance-chasing lawyers and insurance companies that did not care about what premium they set because they could always collect.

The data transparency we have seen in the past couple of years is a considerable step forward. It has a long way to go. The Minister should look the quality of the data and the information they give us to help shed light on what is actually happening because we are not seeing quite the level of transparency we need. If we had greater transparency, we would have less litigation and greater certainty that insurers were passing on the gains they were making from the significant reforms the Government has made over the past couple of years.

It is worth recording those changes and the quantum of damages that come in. PIAB has already been reformed. This is a further reform. Perjury and price walking have been reformed and a fraud co-ordination has been put in place within the Garda. The Competition Act has been greatly strengthened with far greater powers in the hands of the competition authority. We are beginning to see those results. Motor insurance is down 43% from its peak and came down by 10% last year.

However, there can be no room for complacency because the insurance bill that businesses and households have to come up with is close to €3 billion every year. We are used to talking in billions but that is approximately half of our energy bills. Thus, it is a significant element of what we are doing. While we have seen progress in motor insurance, the same cannot be said of employers and public liability. It is very important that this Bill seeks to expand the remit of PIAB, which is to become a resolution board, because it is undertaking mediation.

I welcome mediation and that PIAB will now be keeping, within its remit, claims that concern psychological injury only and long-term illness where it is hard at the initial point to know the final outcome. It is very important that we remove any obstacles to PIAB handling cases.

However, the truth is that the proportion of cases of employers and public liability going to litigation was still rising in 2020, which are the latest data we have, up to 63% and 60%, respectively. The reality is that, by value, that now means 85% of employers liability and public liability is going to litigation rather than being handled by PIAB.

We also see that premiums continue to rise. They rose by 2% in 2020 but by 27% between 2013 and 2020. They rose 27% in seven years. However, in sectors such as arts, entertainment and recreation, premiums rose by 103% in seven years. They rose by 86% in construction; 73% in transport; and 71% in manufacturing in the same period. We are seeing real difficulties in sectors that are very important to us in that employers liability and public liability continue to be a serious problem.

The figures the Central Bank publishes and the Department has made available speak for themselves. The legal costs of claims on employers and public liability, if they go to PIAB, are €1,600 per case. If they go to litigation, the costs are €25,000. Those figures speak for themselves. One is paying nearly €23,500 more in legal costs to lawyers and, of course, the evidence shows that litigation does not bring any extra money to the victim of the incident that occurred.

We very much need to get the message through to people that going the direction of litigation when there are quanta of damage in place, when the courts are using the same quanta of damages as the PIAB, is not a route to either a quicker or better settlement. It will take twice the time and achieve no greater settlement.

More could be done with regard to data mining to demonstrate to people that is the case because we see averages much of the time. People will say that their case is different and will get a gain. They say their cases are especially complex and will not be understood by PIAB and that they need to go to court. It can be demonstrated that is not the case and I wish to see more data doing so and showing the award that could have been got in PIAB, side by side, with the award won through litigation.

Perhaps we should go beyond that and recognise that if people fail to get more through litigation than they did by going to PIAB, their costs would be in jeopardy. That is the case in other cases where a claimant lodges money in the court. If they fail to exceed that, the costs issue is not automatically awarded to the claimant.

We need to recognise a few things Deputy Canney raised that I agree with. I do not think one can have binding mediation. That is a contradiction. Binding mediation would be arbitration but the fact that mediation was rejected can certainly be taken into account in subsequent cases.

One of the things that strikes me about litigation is that while 63% of employer liability goes to litigation, only 1% ends up in court. This is purely a game among lawyers. It is a form of mediation and jockeying that is costing an enormous amount but is not achieving anything. We need to ensure that mediation is not expensive. That is right, but we also have to recognise that mediation is an awful lot better than two and a half years of wrangling among lawyers with the clock ticking on all the time. Mediation is a great step forward. Are there any areas where PIAB will not have discretion to take on the case?

We need more timely data. We need to track the claims in order that we can prove that people are not getting any benefit by going elsewhere and we need to push on with the legislation on occupational liability and duty of care, which I know is the business of another Minister, but it is important that it gets done.

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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Cuirim fáilte roimh an deis labhairt ar an ábhar seo tráthnóna inniu. We are all aware that the insurance market is not working for consumers. PIAB was established to facilitate compensation to people who suffered personal injuries in a way that was fair, transparent and cost effective without the need for costly litigation.

PIAB has been effective in reducing costs and producing prompt outcomes for claimants. From 2015, right through to 2020, the average personal injury award for motor claims through PIAB was €22,000 compared to €23,000 through the courts. It is almost identical. That is a clear message that should go out to people. People do not get more money through the courts. It just delays them and the lawyers will make the big wins.

The big difference is in legal costs. The average legal costs going through PIAB were €665, compared to €15,000 through the courts. It is clear that PIAB is working for claimants but not for the legal industry, which can extract more for itself through litigation.

Given this is the case, it is a source of great frustration that only 15% of motor claimants settled through PIAB in 2019 and 2020, compared to 36% who settled through litigation. PIAB is working well but it is not doing enough work. We need more work to go through PIAB. This legislation seeks to enhance and reform it.

The Bill proposes to change the name of PIAB to the personal injuries resolution board and another provision relates to increasing the scope of injuries that the board can now assess.

In the past, PIAB was unable to assess claims consisting of psychological damage, given that they were not provided for in the book of quantum. The assessment of these injuries is now provided for in the personal injuries guidelines, with the Bill providing that the board will now be able to assess claims of this nature and that is welcome.

With regard to the new personal injury guidelines, I note that the average PIAB award has fallen by more than €12,000. It has almost halved since the new guidelines were adopted. I again urge the Government to support my judicial council (amendment) Bill which would put pressure on insurers to ensure transparency in order that the benefits of these reduced costs are passed on to consumers and not pocketed by the industry.

This Bill provides for a mediation process which the board will facilitate. Under mediation, parties will be able to avail of legal representation or independent legal advice.

At present the Bill does not outline who will be responsible for costs if a mediation is unsuccessful and I ask for clarity on this issue. An important provision of the Bill relates to the claimant who rejects a PIAB award but fails to get a higher award in court. There is already legislation on the Statute Book about this but this removes the discretion and in this case such a claimant must pay his or her own and the defendant's costs in the litigation process to encourage greater acceptance of the PIAB process and fewer cases moving to the courts.

I welcome the policy objective of the Bill but there are issues that deserve further scrutiny and we will have an opportunity to do that on Committee Stage. It remains an open question whether this process will create additional delays or costs to the PIAB process or if it will have the impact we all desire where the number of resolutions is increased and the costs are ultimately reduced. What is clear is that the PIAB works well but we need more people to be using it as the only recourse, thereby reducing claims, costs and ultimately insurance for consumers.

5:12 pm

Photo of Richard O'DonoghueRichard O'Donoghue (Limerick County, Independent)
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The Government has prioritised reform of the insurance sector to reduce the cost of litigation and ultimately premiums. The PIAB was set up in 2003 to deal with motor liability, employer liability and public liability. It has been successful in reducing both the costs associated with claims and the time taken to resolve claims at no cost to the Exchequer. The PIAB process annually saves tens of millions of euro that would otherwise be paid in legal costs. It has resulted in a significant decline in personal injury claims. The impact over two years is an expected overall decrease of over 30% on 2019 levels. The Central Bank is responsible for publishing a report analysing the data. The report showed the pursuit of litigation contributed significantly to the overall statement cost and that the cost of claims settled by litigation had increased significantly since 2015. For those settled with a court award, legal costs totalled 49% of the cost. The hope is that through the Action Plan for Insurance Reform we can all enjoy reduced premiums, fewer court cases and less litigation and fraud.

I wish to bring something to the Minister of State's attention. The PIAB was set up to deal with motor liability, employer liability and public liability. I was and still am in construction and we had our insurance renewed recently. I was talking to different businesses across the board and this affects all of them. I would like the Minister of State's help with it. Your insurance liability is based on turnover and due to the escalating cost of materials and the running costs of any business, insurance premiums are being shoved up. At the end of the year you will have less profit but a higher turnover and will pay more for insurance because of the higher turnover. This needs to be addressed. Whether you are a coffee shop, a local shop, a hardware store - it does not matter what business you are in - your turnover is higher but your profit is either the same or less. Despite this, you are paying higher insurance premiums. That is not right. Those are inflation costs. We need the Government to deal with this. Businesses in all sectors are struggling due to inflation and are paying higher insurance costs and it is not being dealt with. It is the same with motor, public and employer liability across the board.

There is an area this Bill will help with. We have people who have made more than one claim. I am talking about people who might have had two claims per year for the last ten years, within a family unit, and this was not being picked up on. The data needs to be reflected back here about serial claimants within a family unit. That was actually happening. After that, you could go in on a county and see how many claims were being pursued. Then, when you, or your children or partner, went for motor insurance, you were all getting an insurance premium based on the amount of claims being made in each county. If you were in Cork, you could have a lower rate, a higher one in Limerick, a lower one in Tipperary, and so on. It was all based on the amount of claims within an area. Many of these claimants were people making a business of claiming. I hope the PIAB addresses people who are making a business of claiming and thereby distorting the figures. It is the normal person who must go out and pay for his or her insurance who is paying for this. I need the Government to look at the situation of insurance premiums rising for businesses due to a higher turnover caused by inflation, even though profits are lower. I would like the Minister of State's help with that. Any help he can give I will work with him on to ensure businesses get a fair premium cost and are not being targeted because of inflation costs.

Photo of Michael Healy-RaeMichael Healy-Rae (Kerry, Independent)
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I will be sharing my time with Deputy Danny Healy-Rae. I welcome this debate because this Bill is important given the work the PIAB has been doing over the years. As we are all aware, the courts and the Judiciary were overburdened with a massive amount of this type of work and there was need for a more streamlined and sensible solution to secure redress in these types of cases that was more cost-effective for the State, business and individuals. I therefore thank the people in the PIAB for the work they have been doing. We want to make it more user-friendly and attractive so a greater volume of work goes through it. We want the board to be more adequately resourced so it can take on more work and all that will entail.

This Bill will provide for a limited number of new consumer protection provisions for the sector, including a proposed alternative dispute resolution procedure, the publication of quality of service information and compensation for delays in the porting and switching process and missed installation appointments. These are mandatory provisions of the European electronic communications code, EECC. Two further obligations not provided for in the EECC are also proposed to be included, that is, the ability to set minimum quality of service standards that operators must meet and the establishment of a customer charter. The Bill will provide for the necessary amendments to the Communications Regulation Act 2002 to align that Act to the EECC and to ComReg's current functions and powers, including its investigations and the procedural powers. These amendments will include: a broadened information gathering power; the ability to use already gathered information; the ability to better assist the Minister with policy-making; and improvements to the notification, privilege and overcharging provisions.

One thing we cannot let go from this debate is the cost of insurance and what that means to business. As the Minster of State is well aware I already highlighted in this House that all businesses in Kerry recently received a renotification of their rates bill. This is putting pressure on businesses. There are a few things you must do when you are in business and they are that you must pay your bills, you must pay for the energy and the light to keep the door open, you must pay the staff and you must pay your insurance. You cannot operate any business and you cannot function without having proper, adequate insurance cover for yourself, your employees, your buildings, your property, your machinery and whatever else. These are the basic costs that must be handled and addressed.

Due to what I call blackguarding of the system, the cost of insurance had gone up enormously. We had a new event happening whereby insurance companies were settling many cases without even consulting the person who had the policy with them in the first instance.

That has to be wrong. Where someone is paying an insurance company to insure their property, if there is a claim and if the insurance company is negotiating with the person who is making the claim, surely the customer has a right to be kept informed and consulted at all times.

I have no problem whatsoever if a person has injuries and they need compensation to put themselves back to where they should have been. We all know the purpose of insurance. It is to replace the loss, cover for the loss incurred and to put the person back to where they were before the accident or incident. However, we have had situations where people were either extremely unlucky in millions-to-one type of stuff or else there was blackguarding going in the system where members of the same family happened to come upon the same hole on a footpath or the same pothole in a road and happened to fall into it. Talk about hard luck; it was like the Bermuda Triangle. Those types of cases came before the courts and, unfortunately, they were settled by local authorities. All local authorities have been scourged by this type of activity.

That is not for one second to take from the genuine person who would have a genuine accident or incident where they are perfectly entitled to be compensated, but not ten people going out for the purpose of just seeking money. We have had cases of staged car accidents. All these different types of things have happened over the years. We have seen the videos of people inside in shops and miraculously falling down on the ground. It was only coincidence that they might have done the same thing a year or two before. It was like a sideline income. We need to try to protect businesses from that.

We need to give all support we can give to PIAB in the future for the good work that it does in reducing costs because as we all know the legal process is extremely expensive. Anything we can do to keep down that cost at the end of the day is protecting the consumer because somebody has to pay for it. If small businesses cannot pay for the types of bills that I am talking about - electricity bills, rates and insurance - they will close their doors. That local community will then be robbed of that business. The local employment will be gone from the area and it is just bad. I would welcome anything we can do to stop that type of misuse of the insurance industry.

I again plead with the Minister of State to resource PIAB adequately to ensure it can take on more work to do good which is what it has been doing since it was brought into being. I welcome that at that time legislators saw fit to put PIAB in place in the first instance. It has basically done what it said on the tin, but we just need it to do more of it.

5:22 pm

Photo of Danny Healy-RaeDanny Healy-Rae (Kerry, Independent)
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I am glad to get the opportunity to talk about this very important matter. We all welcome anything that would help to reduce the cost of insurance and regulate the amount of claims and awards that are made. Some sizeable amounts have been given to people who were blackguarding the system, taking advantage and making false claims because we all know it has been increasing the cost of insurance. We all accept that insurance is there for a purpose. If someone has had a genuine accident - whether it is on the road, in the workplace or wherever, it is there to ensure that they are properly compensated and remunerated to the level they are entitled to.

We do not want to deny anyone the right to claim for what they are entitled to, but sadly we have seen cases of whiplash claims going back over the years and the savage awards that were given by judges to these people. We have even seen claims for whiplash with €77,000 being awarded here in this country and for the same type of claim £7,000 is awarded over in the UK. As I have said here previously, do those people here in Ireland have a brass neck or was it a gold neck they had to get such a sizeable amount? That was very unfair and was militating against the people who I feel are being discriminated against even today in attaining insurance at a reasonable cost.

The one group of people that have continually been vilified and have to pay more are the young fellows starting out on the road, being asked to pay anything from €2,000 to €4,000 when they are starting out on a learner permit with an accompanying driver. That is a savage sum. It is way more than some of them earn in a summer while they are home from college or whatever and trying to work and acquire a full licence to get on the road properly. They are being vilified before they do any harm at all. I believe that every young fellow, boy or girl, should get a chance to get reasonably priced insurance for a start. If they do harm, do wrong or whatever, they should be charged what has to be charged of them then.

We have many instances where people may have claimed for flood damage and they cannot get insurance for their homes anymore. We have had such cases in Glenflesk because some entity decided that there could be a once-in-100-years flood that could affect their homes and those people are being denied insurance for their homes. Many parishes, villages and communities try to run annual carnivals and festivals to retain their identity. Sadly, some of them failed to take place this year because they could not get insurance or the insurance premium being asked of them was too much. Even hunting clubs have serious problems in getting any insurance following some claim back a few years ago because there is not enough competition in the market and insurance companies can decide not to cater for that at all. I honestly think that since Quinn left the market there has been a huge void. There has been no real competition and it has been a long time since we heard the kind of competition that he was giving. Sadly, the ordinary punter is suffering.

PIAB is changing name and it will now be called the personal injuries resolution board, PIRB. The process may be broadly summarised as follows. The claimant applies to PIAB for compensation. PIAB then informs the respondent giving them 90 days to agree to the PIAB assessment. If the respondent agrees, they must pay a fee otherwise PIAB will authorise the claimant to pursue the claim through the courts. Where PIAB makes an assessment, the claimant has 28 days to decide whether to accept the award. The respondent has 21 days to decide whether to accept the assessment. If the claimant or respondent rejects the assessment, PIAB issues an authorisation for the claimant to pursue the matter through the courts.

It would be much better for everyone. Not everyone can agree to PIAB's assessment and unfortunately they will have to pursue the legal option. It is only right that option remains for them. We all wish and hope they would go through the PIRB option now and give it a chance. If they do not accept it, at least they are after trying. It excludes legal costs, the savage legal costs that mount up. We see that in large claims the legal costs nearly equal what the claimant gets. It is an important and valuable option for people who have a claim to go through this system, which is less expensive and will be less expensive for insurance premiums going forward, especially for youngsters who are trying to get insurance.

5:32 pm

Photo of Jim O'CallaghanJim O'Callaghan (Dublin Bay South, Fianna Fail)
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It is now nearly 20 years since the legislation that established the Personal Injuries Assessment Board was enacted by the Houses of the Oireachtas. If we look back to 2002 and 2003, we can see there were three reasons the Houses of the Oireachtas decided we wanted to establish a new statutory body to assess personal injuries. At that time, there was a great desire to have insurance reform. There was very significant concern about the high cost of premiums, particularly in respect of road traffic insurance. The Government and Oireachtas at the time wanted to ensure the cost of those insurance premiums would come down. It was believed that by establishing a more efficient assessment process, this would occur. Also at that time there was significant concern, as has been highlighted by the Deputies Healy-Rae, in respect of fraudulent claims and people who had played the system. One of the first objectives was to reform the insurance system that operated. The second objective of the Oireachtas in establishing PIAB was to ensure the system would operate faster. Many people who would bring a claim had to wait years before their claim would be assessed and determined. By having an assessment board, individuals who had claims would be able to go before the board and have their claim assessed quickly. The third purpose of the Personal Injuries Assessment Board was to cut down on legal costs. There was too much money being spent on legal costs and there was a desire on the part of the Oireachtas to ensure the claimant would get the money, as opposed to the claimant being involved in a lengthy process that would involve lawyers getting a disproportionate part of an award or a percentage on top of that.

When we look back at the three objectives, there has been significant achievement on the second and third. We have seen the system speed up significantly. One now can bring a claim before PIAB, have it assessed quite quickly, and if one wants to accept that recommendation and the defendant is prepared to accept it, there can be a very prompt resolution of the claim. There has also been a significant reduction in legal costs, not just in terms of the cost of cases that go to the courts but also in costs of claimants who bring their claim exclusively through PIAB. However, there has not been enough success in respect of the whole issue of the first objective of insurance reform. That was to ensure that as a result of bringing in these measures for efficiency, the cost of insurance premiums would come down. We established PIAB. We have established the Judicial Council. We now have judicial guidelines. We really need to see insurance premiums coming down. Insurance companies need to play their part in ensuring the requirement of the public to be able to get premiums at cheap prices are available. When we look at the reforms, it is surprising we have not seen reductions in the premiums, which I know the Minister of State, Deputy Calleary, and the Government want to see.

As Deputy Danny Healy-Rae emphasised very clearly, it is important to point out that PIAB is not taking over the function of the courts. PIAB is not a body that administers justice under Article 37 of the Constitution. It is not a court as provided for under Article 34 of the Constitution. The reason PIAB has succeeded is that it has not gone down that route, or rather the Oireachtas has not permitted it to go down the route of trying to become a form of the administration of justice. The reason it is not the administration of justice, of course, is that individuals who go before PIAB and get their assessment do not have to accept it. That applies for the defendant in any claim as well. They have an entitlement to go to the courts. As long as that exists, it will not be regarded as being the administration of justice.

We saw last year what can happen where a statutory body goes too close to administering justice. The Minister of State will be aware of the case of Zalewski which was heard by the Supreme Court and concerned the Workplace Relations Commission. That just managed to obtain a finding from the Supreme Court that it was just on the right side of administering justice. We have to be very careful, if we are going to delegate responsibilities from the courts to statutory bodies, to ensure that if those bodies are going to administer justice as is permitted by Article 37, they have to comply with fair procedures. We saw in the Zalewski case that the Supreme Court indicated there were a number of procedures being operated in the WRC which were not fair and did not provide persons who claimed they were unfairly dismissed fair procedures.

The other interesting part of the legislation the Minister of State is bringing before the Oireachtas today is that it is not only changing the name of the Personal Injuries Assessment Board to the Personal Injuries Resolution Board but also that there is a real purpose behind that. We are going to have a new section in the legislation which deals with mediation. A person will come before what will be called the resolution board. They can be given an assessment and will also be informed of their entitlement to have their claim mediated. Again, there is no mandatory requirement on a person to go down the mediation route, but I note from the legislation that the Personal Injuries Resolution Board will provide mediators.

One thing I am not aware of from reading the legislation, which the Minister of State might want to think about on Committee Stage, is the extent to which those mediators will come from within the resolution board or whether they will be hired from outside the resolution board. I welcome the fact there is going to be a mediation process available. It is preferable in any dispute in any walk of life that people should be able to try to resolve their differences without the necessity of having to go to court. The advantage of a mediator is that he or she will come in, does not have the ability to impose a settlement on the parties to a dispute but can give a recommendation to those parties as to what the mediator thinks should occur.

The only thing I would say, however, and I think the Minister of State should take this into account, is that there is some requirement to ensure a mediator who is working for the Personal Injuries Resolution Board has a legal knowledge and awareness of how that case will be dealt with if the claimant decides not to go down the route of accepting the recommendation but rather to go to court. To be an effective mediator, one has to be able to tell the parties to the dispute the likelihood of their claim succeeding or failing if they go to court and the nature of the damages they are likely to be awarded should they go to court.

There has been a massive campaign in recent years criticising people for bringing fraudulent claims. That is absolutely correct. Anyone who brings a fraudulent claim should be punished. However, the vast majority of people who bring claims are legitimate claimants.

Photo of Mattie McGrathMattie McGrath (Tipperary, Independent)
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Ba mhaith liom comghairdeas a ghabháil don Aire Stáit. Tá fáilte roimhe ar ais san áit seo. I welcome the Minister of State back. He was always a very engaging Minister and always did his best to meet with Deputies from the Opposition and everywhere else. I wish him luck. I advise him to avoid the golf classics. I only say that in jest. I know he was there for a perfectly good reason, to pay tribute to his late colleague and his late father's good colleague, the late Mark Killilea.

I welcome the legislation. We need insurance reform. We are changing the name of PIAB to the Personal Injuries Resolutions Board. Resolution of all conflicts is very important. As a businessman myself and as somebody involved in so many community projects, I know the ravaging that insurance is doing.

If we end up now, which we probably will, with more companies leaving the market, as with the banking situation, we will be in more trouble because there will be monopolies. I hope the changes here help. I know the number of people who have used the previous board is quite high. It has been a way of getting resolution outside of the court system. The last place anyone wants to go to resolve anything is trasna na h-abhainn, or across the river, and end up with the wigged gentlemen - I nearly said the hooded gentlemen - who are one of the other arms of the State. It can be a costly and a disquieting experience. I have been there a few times. It is a place where every word costs a lot of money and sometimes you get nowhere. However, you have a fine bill at the end of the experience.

I refer to insurance reform. I am dealing with the Minister of State’s colleague, the Minister of State, Deputy Fleming, on the thatched houses. We are trying to preserve our heritage. I know I am straying a small bit, but with the Acting Chair’s permission, I will talk about heritage houses that are protected. There is one particular one in the village of Bhaile Uí Lúbaigh in Cathair Dún Iascaigh in Tipperary. J. Keating’s pub is a lovely pub but it is now dúnta. It cannot get insurance to insure it as a dwelling. It was always a combined dwelling and pub. It was before the petitions committee last week, but I was unable to attend. This needs to be sorted out. It is a beautiful, protected and thatched structure. It is in the middle of the road opposite the church. It is a lovely setting. The people cannot get insurance for it but they are living in it. That should not be happening in any functioning society.

There are countless community events that are not happening this year. Many of them have succumbed to not being able to get insurance or not being able to afford it if they got it. Is mór an trua é sin. That is terrible. Communities that want to give their time voluntarily and run events safely with health safety standards in place cannot get insurance. Even if they can get it, they cannot afford it. That is simply not a satisfactory situation.

There is also the cost of insurance to employers and business people – employers liability, public liability, you name it, and motor insurance. We are talking about reforms. In this case, this is a welcome reform. However, will it have teeth? That is the problem here. We have new a board and a new name, as Gaeilge freisin. However, will it have teeth? Many of these boards love to have the head office, the plaque on the wall, the fancy furniture and seats, the CEOs and everything else. However, a lot does not happen. Perhaps I am too critical of PIAB because it has done something. However, resolution is important. It is important that we have mediation and resolution.

Regarding bogus claims, in An Caisleán Nua, my own village, we put up a playground. I was actually chair of the committee. It fell into disrepair and was closed. My daughter, Councillor Máirín McGrath, got involved in a new committee. Thosaigh sé arís. They started it up great guns. Next thing there were two claims, with adults falling out of basket swings. There was a case in Dublin but there was alcohol involved. However, this was during the day and there were signs up stating they were for children under 12. They then got solicitors and barristers to take the cases. In fairness, the cases were laughed out of court but lo and behold, the cases are now being heard in the Court of Appeal. We are waiting on a judgment. Everyone knows what it costs to go to the Court of Appeal. I do not know who these people are. Are they sugar daddies or is it no foal, no fee? However, it is despicable. It is despicable that community groups who want to put facilities in place for the children of the parish and surrounding parishes cannot do so. They provide great joy and engagement but then you will have people who want to make hay from it.

The main part of the defence in the appeal was that when the former Prime Minister, now imithe, Boris Johnson, was mayor of London, he was actually in one of these swings and was pushing a member of the royal family. I do not know which of the princes it was. It was for the Special Olympics in London back deich mbliana ó shin - ten years ago or more. The case was made that if it was fit for the prince and Boris Johnson, then it was suitable for adults in the village of Caisleán Nua na Siúire in Tiobrad Árann theas under the shadow of the Knockmealdown Mountains. However, it was for an ad for the Special Olympics.

The solicitors and barristers who took that case should be ashamed of themselves, as far as I am concerned. I know you have a right to the court and to justice, but this is farcical in the extreme. We want to encourage communities. Mol an óige agus tiocfaidh sí. Mol na daoine sin agus tiocfaidh. That is what we need in our communities. However, we have these kind of false, fake and fraudulent claims. They just cause this quiet unease. If this case is lost, it will probably be the council which picks up the tab. That is taxpayers' money. The playground will probably be closed forever if we do not get the right decision from the Court of Appeal, if you do not mind. It is a pretty new court in Dublin.

With those few words, I rest my case. I thank the Acting Chair for allowing me in the first round because I was to be in the second round.

5:42 pm

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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I would like to begin by thanking all of the Deputies. Gabhaim buíochas le gach Teachta as a bheith páirteach sa díospóireacht inniu. I welcome all of the positive remarks about the Bill and the work of PIAB, and I want to acknowledge the work of everybody at PIAB since its inception. It is clear the positivity about its work to date is a tribute to it as well as to the overall record. I also want to thank my officials in my Department who have worked incredibly hard to bring this Bill to fruition, along with all of the people and all of groups, many of whom were mentioned this evening, who made a contribution to this process.

I agree that this will not resolve all of our insurance problems. It will not resolve the availability or the selection issue. The Minister of State, Deputy Fleming, is doing considerable work in that space and we, as a Government, have taken a range of actions to do that. This is an important reform. I welcome the commitment in most parts to mediation. Mediation offers speed and simplicity. It will not add time. An intervention that reduces litigation will reduce costs. Certainly, we will seek to work through the process. I am certainly happy to engage with any Deputy bilaterally ahead of Committee Stage to give people assurances in relation to that.

The personal injury guidelines are some of the most significant reforms in the insurance space in decades. We are beginning to see the reductions that are taking place due to the PIAB work and the PIAB process. I would hope that we will see future impacts in Central Bank reports. On that, Deputy Bruton raised an important point. We can see motor insurance prices have fallen in recent years. They are 40% below the 2016 peak. The national claims database is a unique and independent source of data. However, we need to see similar falls in employer liability and public liability, similar to the motor insurance costs. It does not strike me that the benefits of that and of recent years are solely related to the motor insurance industry. Other insurance companies need to take note. I will absolutely be bringing that point home to the Minister of State, Deputy Fleming, from this debate.

There were a lot of comments and proposals around expanding the role of the new body into a quasi-judicial kind of format. I agree with Deputy Phelan’s remarks that there are fundamental constitutional rights at play here. I know the former Minister, Deputy Troy, had much engagement with the Attorney General on this. PIAB is good at what it does; it assesses claims efficiently and thoroughly. Now, by adding mediation, we are giving it a new part to its armoury. This further enhancement will allow it to expand its role even further.

Competition is crucial. Much of the feedback in relation to business, community groups, festivals, services that are being withdrawn and playgrounds comes down to the lack of competition in the market. The Minister of State, Deputy Fleming, has been working incredibly hard to increase the availability of insurance and address the competition issue by seeking new entrants. He has worked with the Industrial Development Authority, IDA, on that. We will continue that work within my Department, putting forward this new, enhanced role for the personal injuries resolution board, PIRB, as part of the attraction.

Many Deputies expressed concerns in respect of resources. We will be working closely with PIAB. I met with its CEO and chairperson in the past week, ahead of the introduction of the Bill, to ensure they will be ready for it. My officials are working closely to ensure that as soon as the legislation is passed, the new PIRB will be in a position to do that. I agree with Deputies with regard to it being essential that the Bill is not just an ornament but, rather, that it works, the reforms outlined are embraced and mediation is used effectively and efficiently, but also with respect. In addition, it is critical that we move forward quickly, and I am glad to have the endorsement of Deputy O'Reilly, as well as Deputy Quinlivan, as Cathaoirleach of an Coiste um Fhiontar, Trádáil agus Fostaíocht, in that regard. We cannot, and I will not, let the best be the enemy of the good. We need to move this critical legislation quickly and I look forward to working with Deputies on it.

I was struck by the contribution of Deputy Carroll MacNeill, supported by Deputy Catherine Murphy, in respect of the State Claims Agency. The Deputy obviously sees this from her perspective as a legislator and member of the Committee of Public Accounts but also as one who is involved in the claims process, as she clearly outlined. I will highlight the issues relating to the State Claims Agency to the Minister for Finance, Deputy Donohoe, and the Minister for Public Expenditure and Reform, Deputy Michael McGrath. Some of the points made by Deputy Carroll MacNeill are important and worth pursuing. We are here promoting mediation as a vehicle but it is not being used by other State agencies. It is something that needs to be brought froward across all the relevant agencies.

Gabhaim buíochas arís le gach duine as an díospóireacht agus beimid ag dul ar aghaidh go dtí Céim an Choiste. Beidh mé ag iarraidh ansin obair a dhéanamh le gach Teachta agus Seanadóir a bhfuil tuairim aige nó aici ar an ábhar seo. Gabhaim míle buíochas leis an gCathaoirleach Gníomhach.

Question put and agreed to.