Ciarán Cannon (Galway East, Fine Gael) | Oireachtas source

I start by passing on the apologies of the Minister of State with responsibility for financial services and insurance, Deputy Michael D’Arcy, who is before the Select Committee on Finance, Public Expenditure and Reform, and Taoiseach this morning. The Minister of State also wishes to thank Senator Reilly for raising the issue of fraudulent claims.

The Senator will be aware that the report on the cost of motor insurance was published in January 2017 and made 33 recommendations. With regard to fraud, the working group made recommendations on improving data sharing to identify patterns of suspected fraud through the development of an insurance fraud database. The working group also recommended that further co-operation between the insurance industry and An Garda Síochána be developed. The Department of Justice and Equality is the lead owner of both of these recommendations.

In relation to the recommendation regarding the co-operation between the insurance industry and An Garda Síochána, I understand that the Garda national economic crime bureau, GNECB, has had a preliminary engagement with Insurance Ireland with a view to examining the possibility of the insurance industry providing funding to set up a dedicated investigation section within the GNECB, to focus exclusively on the investigation of insurance fraud. The structure of this proposed new Garda section is envisaged to be largely based upon that of the Insurance Fraud Enforcement Department, IFED, a specialist unit which is hosted by the City of London police but works on cases throughout the UK.

Insurance Ireland informed the cost of insurance working group at the start of this month that it was recommending the funding by its members of the proposed new Garda section, although it stressed that industry funding should also come from non-Insurance Ireland members writing non-life insurance business here. It is important to note, however, that the Department of Justice and Equality has informed me that all that has happened to date is a scoping of the possible cost and feasibility of setting up such a unit, and it is for the Minister for Justice and Equality, on foot of a recommendation from the Garda Commissioner, to decide whether the establishment of the proposed unit is something which should be pursued.

At this stage, the Garda Commissioner has not yet formed a view on the proposal as there are a number of very serious issues which will require further consideration before any decision on whether or not to proceed in this manner is taken. In relation to the suggestion that the Judiciary has to offer an explanation when awarding damages which exceed those outlined in the book of quantum, a key consideration here has to be the principles of judicial independence and the separation of powers. It must be emphasised that the book of quantum is a guide which merely reflects the prevailing levels of compensation in Ireland for various types of injury based upon what has actually been paid out in the courts, by the State Claims Agency in direct settlements by the insurance sector, or awarded by the Personal Injuries Assessment Board, PIAB.

The book of quantum does not represent set recommended levels of compensation and the figures contained therein are not binding on judges. However, the Civil Liability Act 2004 states that judges are obliged to have regard to the book. Also, it should be noted that the Judiciary, in determining damages, generally provides detailed reasons based on such medical and financial evidence as was adduced or agreed. In many cases, the damages awarded are significantly increased by reasons of the extent of the special damages involved and these would be unrelated to the book of quantum figures.

Finally, a revised version of the book was produced in October 2016 and this has alleviated the key complaint of the Judiciary itself that the book had become irrelevant, having not been updated for 12 years prior to that. The 2016 edition also includes additional injury categories and improved granularity of injuries.