Robert Troy (Longford-Westmeath, Fianna Fail) | Oireachtas source

I thank Senator Mullen for bringing forward this legislation and I welcome the opportunity to be in the Seanad to discuss the Bill and hear the contributions of the various Senators. As previous speakers said, it is timely and important legislation, and I very much share Senator Mullen's ambition for positive change in this area.

Senators will be aware that I have today published the general scheme of a Bill to enhance and reform the Personal Injuries Assessment Board. The general scheme relates to commitments in the programme of Government and the action plan for insurance reform and reflects my ambition to increase the numbers availing of the PIAB model and to reduce the need for costly litigation.

Many speakers have pointed to the importance of businesses, consumers and community and voluntary groups being able to get insurance at a reasonable price. I wholeheartedly agree with them. For too long, the cost and availability of insurance has had a negative impact on our economy and society, particularly for SMEs in rural Ireland. While I would wish for it to be simple and quick to fix, that is just not the case. It requires action, and sustained action at that.The Government's action plan for insurance reform does this. With 66 actions to be delivered across Government, it is one of the most important programmes this Government will undertake.

We have made progress in delivering principal actions, including an office to promote competition in the insurance market, chaired by my colleague, the Minister of State, Deputy Sean Fleming. The scope of the national claims information database has been widened to cover employer and public liability. Actions to mitigate fraud have been delivered, which I will touch on later. Most important, the personal injury guidelines have been commenced. I also wish to acknowledge the perjury legislation initiated in this House under the last shadowed by former Senator, Pádraig Ó Céidigh, and we acknowledge his contribution. That legislation has now been enacted.

The Government has been clear that the reason we are undertaking reform and changes is to ensure that insurance would become more available and affordable for motorists, homeowners and businesses. As these reforms have been realised, we expect the insurance industry to do what it is supposed to do, and said it would do, which is to reduce premiums for motor and home insurance and employer and public liability.

Reform of the Personal Injuries Assessment Board is another important instrument for change in the personal injury sphere. Since its establishment, the PIAB model has delivered major benefits by providing a low cost, quick and fair option for injury compensation. The Central Bank's reporting under the national claims information database, NCID, and, most recently, the bank's third private motor insurance report published in November 2021 shows the benefits of using PIAB. It shows the compensation awarded to claimants is broadly comparable regardless of whether the case was finalised through PIAB litigation.

However, legal costs associated with settling these claims through litigation was, on average, €16,064 compared to the legal costs under PIAB of only €841. The time taken to resolve the claim with the litigation model is, on average, 4.2 years, with claims settled through the PIAB taking, on average, 2.3 years. The NCID report makes it clear that in overall terms the board offers the most cost-effective settlement channel in terms of injury claimant settlements, but also shows that only 15% of motor claims in 2019 to 2020 and 12% of employer and public liability claim in 2019 were settled through the board.

As Senators have noted, we know the number of cases being finalised through PIAB has fallen. It has informed me that public health restrictions have led to a significant reduction in the number of road collisions during 2020 and 2021. These trends are similar for accidents in public places and places of work, with many public places closed or limited in number and many employees working from home. This has resulted in a significant decline in personal injury claims to PIAB. Claim application volumes in 2020 were 60% lower than in 2019 of 31,000. Applications in 2021 are estimated to have been reduced by approximately 20%, compared to 2020 volumes, and are down to 21,000 claims.

While it is not fair to measure the success or failure of PIAB based on the number of claims it receives, it is an important indicator of the personal injury landscape. It gives us an insight into what can impact on the number of accidents occurring resulting in claims. This includes not only the effects of Covid I have mentioned, but also increasing awareness regarding accident prevention and risk assessment. The impact of the guidelines, together with reform of PIAB, should lead to greater use of the service provided by the board and lower claim costs, and should facilitate a reduction in insurance premiums. This should contribute to reductions in insurance premiums for businesses, consumers and community and voluntary groups.

Given our shared ambition to improve availability and reduce the cost of insurance, I want to take this opportunity to inform the Seanad of work in this regard, specifically to enhance and reform PIAB. Since taking office, I have worked to develop proposals to ensure that more personal injury cases are resolved by PIAB within a faster timeframe and with lower costs compared to litigation. I have engaged with businesses, community group and representative bodies, such as the alliance for insurance reform. The resounding message from all has been for the urgent need for change in the personal injuries sphere.

Last year, I launched a public consultation on measures to enhance the role of PIAB. I am pleased to say there was an excellent response to the consultation, with more than 240 responses received. These submissions reflected the consensus that the time is right to strengthen and enhance PIAB. At the same time, I was struck by the positive feedback received which indicated that the service provided by PIAB is valuable and makes a real difference. This is reflected in the Central Bank's report which showed that legal costs are 50 times greater when claims are settled by a litigation rather than through PIAB and take almost twice as long to settle. It is clear to me that PIAB has a valuable role to play and the general scheme I published today is the starts of a process of legislative reform to enhance and strengthen the agency.

The general scheme proposes to amend the Personal Injuries Assessment Board Act 2003 and the Personal Injuries Assessment Board (Amendment) Act 2019 to increase the number of personal injury claims settled through PIAB and avoid the expense and time associated with litigation. It provides that PIAB will offer mediation as a means of resolving a claim. It will retain claims of a wholly psychological nature. PIAB will have additional time to assess claims where an injury is yet to settle, rather than released into litigation. PIAB will deepen its analysis and public information roles. It will seek approval of identity on application and disclose information to An Garda Síochána in order to reduce fraud. A court's discretion regarding costs in litigation will be tightened.

I welcome the cross-party support today mentioned by various Senators and their commitment to support and enhance PIAB. I do not have a monopoly on good ideas. As with pre-legislative scrutiny, and as we go through the process of the Bill, I will gladly consider amendments and suggestions emanating from the committee.

Given the provision to extend the remit of the board and give it new statutory functions to resolve personal injury claims, I also propose to change the name of PIAB to the personal injuries resolution board. A key reason for this is my proposal to introduce mediation into PIAB. This is a new function. The advantage of mediation is that parties can avoid potentially prolonged and costly litigation and may arrive at a mutually satisfactory outcome for the party in a much shorter space of time. Mediation offered by PIAB 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 resolution.

Where parties do not consent to mediation, the existing process in respect of an assessment of claim remains. An advantage of mediation is the ability for parties to get speedy access to a process that may produce a satisfactory outcome for the parties within a short space of time. Mediation will not affect the timeline for assessment of a claim. The board will remain obliged, under section 49 of the principal Act, to assess claims within nine months of the confirmation of the respondents' consent to the assessment process, notwithstanding some exceptional circumstances provided for in the litigation.

Mediation is already successfully used by body such as the Residential Tenancies Board, the Workplace Relations Commission and the Financial Services and Pensions Ombudsman as a means of facilitating the resolution of issues between parties. My proposals are modelled on existing legislation in respect of these bodies.

With the introduction of the personal injury guidelines, a claim that has been assessed by the board but then proceeds to litigation will be considered by the courts using the same criteria and award levels used by the board. The obligation on the part of the trial judge to have regard to the guidelines is mandatory. Under the general scheme proposed, I intend to strengthen and clarify existing provisions regarding the costs in a court setting.

The discretion available to the court will be tightened regarding the award of costs against the claimant who has rejected a PIAB assessment and where the respondent accepts it.Instead the default will be for the courts to award costs against the claimant unless this would give rise to an injustice. This should encourage a certain class of personal injury claims to be settled without the need for far more costly litigation.

While developing the legislation to reform and enhance PIAB has taken a bit longer than I would have liked, I believe it is important that when we legislate to reform PIAB, we will have gone as far as we can in terms of strengthening the agency to ensure more cases are settled through it without recourse to expensive litigation. On foot of stakeholder engagement, I considered at some length and in detail the potential to reform PIAB as a quasi-judicial body. The potential to legislate so that a claimant or respondent could only appeal a decision of the board on a point of law was fully explored. However, informed by the advice of the Attorney General, I have not been able to take this approach forward. This is because such an approach would not be compatible with the Constitution as it would impinge on the constitutional right of access to justice delivered by the court as well as the primacy of the courts regarding the administration of justice, particularly with regard to a body of common law. The general scheme is the starting point for reform and I will continue to explore all avenues and suggestions to enhance the agency.

Turning to the specific provisions of the Bill referred to by Senator Mullen, the Bill provides for penalties for giving false or misleading information to PIAB during an application for or the assessment of a claim for an award for personal injury. As Senators will know, certain classes of personal injury claims where liability is uncontested can be settled on a consent basis without the need for litigation. By proceeding with the PIAB process, the respondent - generally an insurer - will have considered the claimant's case and satisfied itself of the bona fides or otherwise of it. Where liability is an issue or the circumstances of a claim are disputed, the respondent will refuse an assessment by PIAB so that it can investigate the matter. In those circumstances, PIAB will release the case and provide authorisation to a claimant to proceed to litigation if he or she so wishes. The PIAB Act does not provide for any penalty or sanction regarding the provision of misleading or false information to it. This is because PIAB does not investigate the circumstances of claims or address the issue of liability. However, where there are suspected fraudulent claims, there is an onus on the respondent to report such suspected fraudulent claims to An Garda Síochána to enable the successful prosecution of fraud offences. Where PIAB is made aware of suspected fraudulent activity, it reports the matter to An Garda Síochána. The determination of whether fraud has taken place is by nature a matter of judgment for which a court is the appropriate body and which can consider the relevant matters presented to it by all parties.

As the Senator is aware, there is already a significant body of legislation dealing with fraudulent personal injury claims both where an alleged fraud has taken place regarding information supplied and proceedings before the court and suspected fraud outside the litigation system. This legislation includes the Criminal Justice Act 2011, the Criminal Justice (Theft and Fraud Offences) Act 2001 and the Civil Liability and Courts Act 2004. The Department of Justice has examined deterrence to insurance fraud, including penalties for insurance fraud, in consultation with relevant agencies. An important milestone was achieved in 2021 with the enactment and commencement of the Criminal Justice (Perjury and Related Offences) Act 2021 increasing the range of options for investigation, prosecution and penalties on conviction that can be considered regarding those making false or misleading claims.

The Government fully appreciates the intentions of the Senator's Bill. Fraudulent claims should be dismissed by courts and, where appropriate, fraudsters should be prosecuted. I believe there may be merit in introducing a further offence concerning the provision of false information to PIAB along the lines of the Bill. If there is a gap in the PIAB legislation, I will move to fix it. I will, however, need to consider how the proposed provisions might interact with the provisions of existing legislation. This will need to be examined to determine if the effect of the proposed provisions of the Bill provide additional benefits or merely duplicate existing provisions under which PIAB can refer suspected cases of fraud for investigation by An Garda Síochána. Consideration will need to be given to how fraud would be detected, investigated and the legislation enforced. When I have examined the matter and if there is merit in introducing these provisions, I will revert with proposals to Government.

To conclude, I thank Senators for their valuable contribution tonight. I believe greater utilisation of the PIAB process alongside consistent implementation of the personal injuries guidelines will increase the number of personal injury claims settled through PIAB and ensure that insurance products are available and affordable for all businesses and consumers. I am determined that legislation to strengthen and reform is progressed as soon as possible and I look forward to constructive engagement on this. The proposals to enhance the agency represent a new direction to address issues in the claims environment. As I said previously, Government does not have a monopoly on good ideas and we are willing to work with Members of both Houses to progress reform. I acknowledge Senator Mullen's positive and constructive engagement with me to date and I want to ensure that this positivity and constructive debate and engagement continue as I progress to enhance and reform PIAB.