Joanna Tuffy (Labour)

I have no difficulty with legislation the purpose of which is to penalise and try to prevent fraudulent claims. However, in this legislation, the balance is weighted against genuine plaintiffs and claimants and in favour of the defendant and the insurance industry. Senator Feeney said that we are all held to ransom by fraudulent claimants. The vast majority of claimants are genuine, and many people are genuinely injured but do not make claims. I accept that one must do something about fraudulent claimants, but not at the expense of hurting genuine claimants or deterring them from taking cases and being properly compensated for their injuries.

While such information is personal, I am sure that many people in these Houses have made claims for accidents in which they have been involved, with genuine reason for doing so. Many people in many families do it, and those who abuse the system are in the minority; it is very important to point that out. Those involved in the insurance industry are not charities to look out for the common good of the people. They are profit-making organisations.

There are issues concerning legal costs, fraudulent claims and the level of awards made, which affects insurance costs. However, the profit made by the shareholders in the insurance industry must also be considered. I received documentation from the Law Society, which wrote to me about the legislation, which it generally welcomes, saying that it implements many of its own proposals. However, it also raises several important concerns. Listing them might be helpful to the Minister, who I hope will take them on board. Its first problem with the legislation concerns section 6, which amends the Statute of Limitations (Amendment) Act 1991. I see no problem with the limitation period being three years. Three years is a short limitation period in the context of other limitations in civil law. The Law Society is concerned that rather than affecting the bogus claimant, who is aware that money can be made and does not wait before initiating a claim, the limitation will affect a genuine claimant who is more reluctant to make a claim and who spends time pondering the matter and talking to people before eventually deciding to take a case. It is the genuine claimant who will be affected by this section.

I would be interested to hear the Minister's comment on an example raised by the Law Society. It is concerned, in particular, about people who are more seriously injured. It says that they are more likely to be detrimentally affected by this reduced time limit, for example, a person with a head injury or someone who is hospitalised. There may be such chaos in their lives that they will not start to write a letter of claim within two months or issue proceedings within a year.

Another example would be a case of medical negligence. Many families are surrounded by so much trauma and grief regarding the incident that could give rise to a personal injury claim that they do not even conceive of the possibility of medical negligence and would not be capable of adhering to the time limits of this and other sections of the legislation. The Law Society is right to raise concerns about people caught in this type of situation.

Another concern is that solicitors will have to worry about the possibility that they may be considered negligent if they do not issue proceedings. The legislation may therefore give rise to more proceedings being issued as a protection against professional negligence. The Law Society and others have raised this issue.

In some situations people do not get round to initiating proceedings. They might get their solicitor to write a letter or there may be phone calls involved. Perhaps a medical report will be handed to the insurance company and they settle with that. This legislation may discourage this type of arrangement, which reduces legal costs between the two sides. People will now be conscious of the time limits and the defendant will know these limits are very much on his side.

The Law Society has other concerns apart from the penalisation of genuine claimants. It feels the legislation will discourage proper investigation of cases because it may no longer be feasible to carry out lengthy investigations before the issuing of proceedings. This will have a destructive effect on the process. The legislation for the Personal Injuries Assessment Board provided for a temporary suspension of time under the Statute of Limitations. The PIAB does not apply to medical or clinical cases and many claims are excluded from its remit. Even if the PIAB allows for the suspension of time, proceedings will probably still issue in under less than two years.

The Statute of Limitations is very strict with regard to personal injury cases but in other torts the period is generally six years. The Law Society cites the example of a large corporation involved in a commercial dispute. It would have five times longer to decide whether to pursue another party for breach of contract than a citizen who suffered personal injuries. This is an imbalance in the overall scheme of Statute of Limitations.

The society mentions other areas which will be damaged by this new time limit. It suggests that a letter of claim would provide adequate information to a defendant of an intended case, without the imposition of this additional time limit. It considers that this change will infringe fundamental human rights and the European Convention on Human Rights Act 2003.

With regard to a letter of claim, section 7(1) states "A person who intends to bring a personal injuries action shall, not later than 2 months after the date of accrual of the cause of action, or the date of knowledge...serve a notice in writing on the wrongdoer or alleged wrongdoer". Failure to write such a letter results in the plaintiff, potentially, being penalised and entailing the risk of costs. There is no similar obligation on a defendant to furnish a letter of admission of liability within, for example, two months of receipt of a letter of claim which may result in the awarding of damages to a plaintiff who has been put through the stress and trauma of pursuing a valid claim. This is an example of imbalance between what is required of the plaintiff and a defendant under this legislation.

Section 7 also fails to have appropriate regard for circumstances where severe injuries have left the party incapacitated or hospitalised and unable to write the letter of claim. Through no fault of their own such people then have to go cap in hand to the court seeking a concession as to why an order for costs should not be made against them for not providing this letter of claim within the time limit. This may affect overall costs. If they win the claim, it could result in a reduction in the costs to which they are entitled or involve an additional cost for which they are liable. The Law Society feels this section is unrealistic and that it will be breached without blame in the majority of cases. Instead, it suggests that the section should impose a requirement on the plaintiff to write a letter of action in adequate time before the issue of proceedings. If not, the court would then be entitled to penalise the plaintiff.

I have some general concerns about Part 2 which singles out personal injury claims — I already gave examples of longer time limits in other torts or where a company might decide to pursue another party — and stigmatises them within the court system. This is very much the tenor of this debate and of much debate in these Houses. I agree that we need to do something about bogus claims. However, we must consider that the majority of claimants are genuine and we must protect their rights.

People often do not realise how significant an injury is at the time, particularly if they are involved in a road accident. If a truck runs into the back of a car, it could be a year before the car driver feels the detrimental effects of the impact. I was involved in that type of accident two years ago. I still feel the effects of it. I took a claim, rightfully, and I have no problem admitting to that.

I wish to point out what I think is an error in the Bill, something I hope the Minister will amend. It concerns section 11(3) which begins "Where a defendant fails to comply with this section". I understand from the Minister that he agrees the word in 11(3)(a)(i) should be "defendant" and not "plaintiff".