Paul Gavan (Sinn Fein) | Oireachtas source

It is good to see the Minister of State. On behalf of Sinn Féin, I welcome the Personal Injuries Resolution Board Bill 2022, as it relates to the programme for Government commitment to enhance and reform PIAB. It also addresses the commitments in the action plan for insurance reform to provide for a new and enhanced personal injuries resolution board. Overall, this Bill is a positive step in the reform of the claims landscape, and it follows the adoption of the personal injuries guidelines in 2021.

Anyone who talks about insurance will know that my colleague, Deputy Pearse Doherty, has done tremendous work in this area over the past decade. Therefore Sinn Féin supports this Bill, and any movement to reduce the cost of claims, speed up the process and, accordingly, reduce insurance premiums is to be welcomed.

The Bill proposes to amend the Personal Injuries Assessment Board Acts 2003 to 2019, which would have the effect of increasing the number of personal injury claims settled through PIAB, which it is hoped would help avoid the expense and time associated with litigation. The objective of the Bill is to amend the legislation to facilitate an increase in the level of personal injury claims that may be resolved through the board.

This Bill also introduces the option of mediation, whereby both parties would be asked to consent to mediation and, if mutually agreeable, a mediation officer is then appointed. The recruitment of mediation officers will be very important. They need to be the right people with the right experience. Their contract terms and conditions will be very important because not only do we want them to start the work and for there to be enough officers recruited to prevent a backlog, but we also want them to feel they can work in that position on a long-term basis. Anyone who works in mediation knows that one builds up the knowledge and understanding of the issues over time, which is invaluable in providing an excellent and efficient service.

The Bill further seeks to extend the powers of PIAB to assess more complex injuries, such as psychological injuries, which were not previously assessed by PIAB. In doing that, it aims to increase the number of personal injury claims that can be resolved by including these types of claims.

Avoiding unnecessary litigation is the key purpose of PIAB and the Bill before us. Assessing insurance claims through PIAB is a quicker and cheaper option through which to make insurance claims. In 2020, it was estimated the cost of litigation was €16,064, but if done through PIAB the average cost is €841. That is very significant. Furthermore, the amount of time to settle reduces on average from 4.2 years through litigation to 2.3 years through PIAB. We know the long drawn out process of litigation can be very stressful for claimants, so this is also good news.

Litigation and personal injury claims increase the cost of solicitors and barristers as well as the insurance industry. The costs associated with litigation are then used as an excuse to inflate premiums disproportionately. Sinn Féin has consistently advocated for the strengthening of the powers of PIAB as a method of reducing the legal costs in claims settlements.

PIAB has shown itself to be successful when self-financing, but it is important it continues to have the resources it needs to improve its performance and the volume of disputes it can assess. The reduced cost of litigation due to the recent changes in legislation and the financial benefits insurance companies will gain from an enhanced PIAB role must be passed on to consumers. There is not much evidence of that as yet since the introduction of the 2021 guidelines. The Government must monitor this carefully. Sinn Féin's insurance Bill, introduced by Deputy Doherty, requires just this, namely, the publishing of a report on the effects of the previously introduced guidelines and that consideration would be given to the report when framing future legislation.

Many local community groups struggle with insurance costs, and now with rising inflation and energy costs they will struggle even more. Insurance costs are usually the biggest barrier for these groups when trying to organise events such as local festivals or fun days. The Alliance for Insurance Reform recently carried out a policyholders survey to mark the first anniversary of the implementation of the pivotal judicial guidelines for personal injury damages on 24 April 2021. This survey found that 42% of respondents believe insurance costs are threatening the future of their organisation. This figure is not materially different from the response to the same question in research the alliance carried out in 2018. It also found that 31% say insurance costs are preventing them from providing certain services, which has increased from 26% in the 2018 survey. In stark contrast, however, PIAB reported that the average awards for personal injury claims made since the introduction of the personal injuries guidelines are down by 42% compared with 2020. This shows that strong action in the area of insurance can have a beneficial effect, but we must see those benefits passed on to insurance customers.