Derek McDowell (Labour)

I apologise on behalf of my colleague, Senator McCarthy, who intended to take this Bill but unfortunately had to attend to a matter in Cork. I welcome my constituency colleague, the Minister of State, Deputy Callely, to the House. I do not think I have had an opportunity to congratulate him on the record before, which I now do.

I am bothered by section 34 of the Bill which deals with the issue of unlimited liability and a proposed cap. The purpose of this section is not at all clear. I have read the Minister of State's contribution and I know what was said on Committee and Report Stages in the Dáil. However, it does not make sense. There are two ways in which the Minister of State could have sought to deal with the acknowledged problem of large or excessive awards putting pressure on the insurance industry. He could seek to prevent the courts from awarding damages in excess of a certain amount for property or injury to the person, in regard to which I have heard argument that to do so would have constitutional implications and could conceivably be ruled to be unconstitutional. However, it would at least make sense within a certain context. Although I appreciate it is an enabling provision, what is proposed in this section does not seem to make a great deal of sense.

It is proposed that the insurance companies will only cover a certain amount of an award. For the sake of argument, the Minister could make regulations, with the consent of the Oireachtas, to put a cap of €1 million on damages which would be awarded for personal injuries. However, nothing in the section prevents the courts from making an award considerably in excess of that, for example, the courts could award €2 million or €3 million. That liability attaches in the first instance to the insured person — the defendant. His or her insurance company will pay out the first €1 million in damages but he or she is still personally liable for the rest.

This seems to undermine the whole basis of our insurance system because we seek and receive insurance believing it gives us cover against any cases which could be taken against us if we are guilty of negligence. However, if the insurance company will only cover one for a certain amount and one must cover any amount in excess, it will give rise to considerable concern. It is not alarmist to suggest that it is perfectly possible for someone to force the sale of another person's house in order to fork over the additional damages. This seems unfair and goes to the heart of our insurance system. Moreover, it is not just the defendant who would be placed in difficulty; the plaintiff would also be in difficulty.

In regard to the most serious cases, I presume the cap is intended to be relatively high. These will involve, for example, people who have been be disabled, paralysed or rendered quadriplegic. It is generally acknowledged that while our awards for lesser injuries in this country tend to be relatively high, the awards the courts make for more serious injuries tend to be closer to the international norm. It is possible that someone who genuinely required extensive care and medical attention into the future would not be able to recover sufficient funds to cover his or her medical expenses and care requirements. In this situation, the defendant has an exposure because he or she has a liability which he or she may not be able to discharge without selling his or her house or other assets and the plaintiff, the more seriously injured, would be in a situation in which he or she could not guarantee being able to look after himself or herself into the future because the damages he or she is able to recover were not sufficient.

Before we legislate for something as fundamental as this and injure and do damage to the insurance system and the concept of insurance in the process, we need to be very satisfied as to why we are doing so. No cogent case has been made as to why we should. The Minister of State's contribution referred simply to the solvency of the insurance system and insurance companies and their requirements in terms of reinsurance and so on, while at the same time he stated that this provision did not come from the industry. I was interested to read a report in today's edition of The Irish Times which referred to a recent debate when prominent individuals in the insurance industry and others such as Ms Dorothea Dowling, whose views we respect on this matter, addressed this issue to a greater or lesser extent. They seem to indicate the problem is not serious, and in so far as there was a serious problem, this measure was not required to deal with it. What will be the effect of this measure? It seems a little strange that if it will deal only with the relatively small number of high awards, presumably it will not be of great benefit to the industry. The bulk of awards are relatively small, although we might consider them to be over-generous but will not be affected by the cap. In many cases the more serious accidents are most deserving of the damages that are awarded.

I am very open to the idea that we change the way in which awards are made. Rather than making lump sum awards, there is merit in giving an annual award to cover care and the actual costs incurred. I appreciate that the courts are not very keen on this idea because it would involve substantial administrative costs and they would like to draw a red line under such an exposure. However, in terms of justice and fairness, it has a great deal to recommend it. I get a sense from the language the Minister of State has used that he is not totally wed to this idea. Perhaps we could have a more detailed discussion on it on Committee Stage.

I welcome the introduction of a new system of speed limits, particularly the distinction being made between regional and national roads. While the Minister of State and I both live in the city, my good lady wife is from north Clare. Having driven the roads from Lisdoonvarna to Ennistymon and Doolin on more occasions than I care to count, the idea of a 60 mph speed limit on bad roads is foolish. Reducing the speed to the equivalent of 50 mph is welcome and the distinction between national and regional roads is sensible and is something we should have introduced some time ago. There is a cogent case for making such decisions at local level. I know there is a requirement to seek the consent of the National Roads Authority to changes of the speed limits, and I accept that, but we must acknowledge that local councillors and the local county or city manager knows best. It is good that this is underpinned in the Bill. We must address local circumstances with a measure of flexibility and I know that flexibility is in-built in the Bill.

From my experience of driving in France on holidays, the speed limit is lower when weather conditions are bad or it is raining. I am not sure if this has statutory effect, but I assume it does. In France the speed limits are 130 km/h in normal conditions and 110 km/h when the weather is not good. This common sense approach has a self-evident appeal. Will the Minister of State consider it and respond to it when he gets the opportunity?

I welcome the power given to city and county managers to set limits for road works, particularly for one-off events. I am glad that we are eventually tackling the metrification of the system. Although this has been flagged, there has been little publicity regarding it. I understand, and the Minister of State may correct me if I am wrong, that it is intended to implement it in a "big bang" approach in January. However, I am not sure it is correct to only give a few weeks' notice regarding the implementation of this measure so soon after Christmas when people's minds are elsewhere. I know that one may announce things as many times as one wants but until it happens people will not pay much attention. This is an important issue where a significant publicity campaign run by the Government and by the Department is clearly mandated and required. While there has been some publicity in the past few days, we must make considerably more effort in the next month or so if this is to happen smoothly. I know there is provision in the Bill for transitional arrangements but I am not totally clear as to how that will work.

I drive a very old Japanese imported car where the speedometer is calibrated in kilometres per hour. One gets used to it in a matter of weeks. I appreciate that some among us are more resistant to metrification and it may take them longer. We should not opt for a long transitional period. We should require as soon as possible, if not immediately, that new cars being imported into the country or being constructed here in part have only metric calibration.

People will become familiar with the metric measure very quickly, if needs must. It is not unusual to see road signs showing distances in imperial measures and others in metric measures. It is almost an Irish joke when one sees a sign for a destination with "5" and a small "km" written beside it and further down the road a sign shows "3" with no calibration on it. We can appreciate what it means, but visitors do not know that a white sign is an imperial measurement and a green sign is the metric measurement, and this causes confusion.

It is now 27 years since we first introduced metrification and we should put in place an accelerated programme of removing signs showing imperial measurements as soon as possible. It is holding us up to ridicule in a fashion that is avoidable and we should simply stop it.

My primary purpose in speaking today was to address the issue of insurance. I trust we will have an opportunity to have a detailed debate on it on Committee Stage.