James Reilly (Fine Gael) | Oireachtas source

I ask the Chair to alert me if I am still speaking with one minute to go. I hope not to be. I welcome the Minister to the House. He is a regular visitor. I welcome this Bill, which has been proposed by Senator Lawlor. It is an important Bill because it highlights an issue that is serious for many small businesses in this country. I want to state at the outset that victims of accidents and misadventure are entitled to proper and proportionate compensation for the pain, suffering and loss they endure.People suffer varying degrees of pain and may lose time from work and can lose valuable property. Motor insurance is a typical case.

We have to accept that we have a serious problem because our personal injury payouts are four times higher than in the United Kingdom. The payout for whiplash in Ireland is four and a half times the level in the UK. The average motor claim is almost €21,000, which compares with a payout of €4,000 in the United Kingdom, €1,500 in France and €4,500 in Germany. We are seriously out of kilter with our neighbours across the water and with our friends in Europe. There is a reason for that. I know people have different views as to the cause of these problems. I find I am in agreement with many of Senator Horkan's points. There has been a 42% rise in payout costs since 2011. This is not sustainable for business in this country. Up to 70% of the cost of the insurance premium is claim related. In other words, 70% of the cost of one's insurance is claims related. In 2018, according to the AA, the average premium in Ireland was €998 whereas the average in the UK was €477, half the cost of insurance in Ireland. There is a very obvious link in terms of what businesses have to pay for insurance, what motorists have to pay for car insurance and the way insurance claims are settled. There is a lack of oversight in certain areas.

I am very supportive of the Alliance for Insurance Reform. It has asked that a Garda fraud squad be set up. I have called for that before and I am 100% in support of it. I ask the Minister for Justice and Equality to ensure this happens. We have a problem in that as far as I know nobody has served time for fraudulent claims and very few have been prosecuted when their claims have been thrown out of the court and when they have been clearly fraudulent. I know the Garda Síochána will be very keen to pursue these people, if there were a Garda fraud squad in place. Another issue is to link sections 25 and 26 of the Civil Liability Act 1961 so that these claims are referred automatically to the Garda fraud squad. It wanted to amend section 8 of the Civil Liability Act to make it mandatory and reduce the period of reporting accidents to one month. There are views on what to do when several months or a year after something happens, a claim is submitted. Very often the evidence one might have had on CCTV is gone. It wants to regulate the claims of management companies, that is, the harvesters of claims and change the approach to calculating the book of quantum, which this Bill relates to.

Section 6 is very important in order to get consistency in the awarding of general damages among judges by requiring judges who award damages in excess of the book of quantum to set out detailed reasoning for doing so. I do not think that is unreasonable. I do not think the Judiciary should be overly sensitive to that. Let me put on record that I support the Judiciary and its independence. It is the third estate and the court system has served us very well over the years but nothing is so good that it cannot be improved on. As a speaker pointed out, there must be an explanation as to why one waits for a certain day and for a certain judge, if one can, because one will get a better payout. That is an issue that must be addressed and we should not run away from it. I do not think the Judiciary should be afraid to say that it is not perfect. Doctors are not all perfect, solicitors are not all perfect and politicians are not all perfect, so why would judges be all perfect? There are a number of other things the Alliance for Insurance Reform wants to do but the points I have mentioned are the ones that are really important.

While I welcome this Bill, I know there may be some technical difficulties and there could be constitutional issues and so on, but it highlights this problem of the difference in what insurance companies in this country pay out for injury claims and what is happening in other countries. Let me restate, however, that any victim who suffers loss is entitled to proportionate compensation, but our compensation system is disproportionate by comparison to all our neighbours in Europe. We need to look at that and address it.

We are facing Brexit and these are times of serious concern for business. We have been very fortunate that between the efforts of the Irish people and the policies of Government we have virtually full employment again but many people are very nervous about the future. Many are holding back on investment because of Brexit and many are scared about insurance premiums. Let me give an example of a real case from Fingal. This is what happened to an independent, quality food retailer with a farm to fork system. He sells the organic vegetables he grows. He has two small shops in Fingal. He had a blemish-free record for more than 25 years but he has had a couple of claims in the past two years. One was where a customer tripped over a bag of potatoes that the customer had put back in an inappropriate place. This is a real example of a claim for €80,000 on his insurance. The result is that this year, as his broker has warned him, he may not be able to get insurance cover. If he gets insurance cover, the premium will go up substantially. This man employs 140 people in Fingal and his business is being put in jeopardy. He is a small farmer, an innovator with an independent outlet. This is what we are trying to encourage and we are proud of people like him, but his business is in jeopardy. He is not in a position to carry the risk of not being insured and if his insurance premium goes up substantially - we know what it means when brokers talk about substantial rises in premiums - he may have to go out of business with the loss of 140 jobs. This is a really serious issue. It is real and is hurting people on the ground.

Small and medium enterprises are the backbone of the Irish economy and are the backbone of our communities across urban and rural Ireland. We have to support and protect them and do something about the cost of claims and the insurance costs. I am not trying to point the finger at any individual profession but we have a problem which we have identified the problem. Senator Lawlor has come up with a part solution. If one looks at a graph of insurance claims in other countries, the more serious the injury, the greater the level of compensation. It is a straight line graph but in this country, the least serious claims go way up and then it starts to level off towards the more serious injuries. A disproportionate amount of money is being awarded for the lesser claims, for the lesser injuries. We have to address that if we are to have a sustainable industry and business environment for the small and medium enterprises.