Friday, 19 December 2003
Personal Injuries Assessment Board Bill 2003 [ Seanad Bill amended by the Dáil ] : Report and Final Stages.
An Cathaoirleach: I welcome the Tánaiste. This is a Seanad Bill which has been amended by the Dáil. In accordance with Standing Order 103, it is deemed to have passed its First, Second and Third Stages in the Seanad and is placed on the Order Paper for Report Stage. On the question, "That the Bill be received for final consideration," the Minister may explain the purpose of the amendments made by the Dáil. This is looked upon as the report of the Dáil amendments to the Seanad. For the convenience of Senators I have arranged for the printing and circulation to them of the amendments. The Minister will deal separately with the subject matter of each related group of amendments. I have also circulated the proposed grouping in the House. A Senator may contribute once on each grouping. I remind Senators that the only matters that may be discussed are the amendments made by the Dáil.
Tánaiste and Minister for Enterprise, Trade and Employment (Ms Harney): Amendments Nos. 1 and 7 were proposed on foot of an Opposition amendment in the Seanad regarding the types of cases to be excluded specifically from the Personal Injuries Assessment Board, PIAB, process. That amendment was tabled by Senator McDowell. These two amendments reflect the Government's response to the issues raised. Amendment No. 1 refers to certain categories to be specifically excluded from the PIAB process while amendment No. 7 refers to the discretion of the board not to deal with cases involving aggravated or exemplary damages as long as it is not for the purpose of circumventing the Act.
Ms Harney: The primary purpose of this Government amendment was to clarify that, although a claimant had to go to the PIAB before bringing proceedings, those proceedings did not encompass the types of orders referred to in the amendment. The amendment also makes it absolutely clear that such orders are exceptional in nature and, in any event, cannot prejudice PIAB procedures. By inserting this amendment, we are going no further in this legislation than the current situation. We are restating the law in the area, subject to adjustment, to take account of the PIAB. The amendment was deemed necessary on the advice of the Attorney General to make it clear that we were not in any way infringing on a person's existing legal rights.
Ms Harney: These amendments deal with cases where the board has discretion under section 17 not to make assessments. The Government amendment deleted a subsection which made it mandatory for the board not to make an assessment if a respondent did not pay a charge imposed on him or her. The subsequent amendment, amendment No. 8, provides for the board's discretion not to make an assessment in such cases. It is moving from a mandatory to a discretionary situation.
Ms Harney: These amendments were tabled by Deputy Hogan of the Opposition regarding the documents that PIAB assessors would seek from claimants. Assessors will be reasonable in their requests to the claimant and will not seek information and documents which the claimant would not reasonably be expected to provide. Notwithstanding this, I was prepared to accept the amendments to clarify the matter further.
Ms Harney: These amendments are all technical in nature and deal with the area of issuing authorisations to the claimant to bring proceedings against respondents in various situations. I could go through them in detail but they make clear the basis on which claimants can be given authorisation to take proceedings against respondents.
Ms Harney: The earlier version of the Bill did not take account of situations in which a respondent might not respond to the PIAB when asked if he or she consented to an assessment being made. In such cases the respondent is considered to have consented to the assessment. The effect of the amendment is to provide that in such cases time limits will apply from the date of expiry of the period in the notice from the PIAB to the respondent requesting that he or she consent to an assessment being made.
Amendment No. 21 inserts the word "shall" and makes what the board can and cannot do more specific. Amendment No. 22 was brought forward on the advise of the Attorney General to make it absolutely clear that the rules of court which deal with the various procedures available for enforcing a judgment are also available for the enforcement of an order from the PIAB.
Ms Harney: This section refers to cases where the next friend or committee of a minor or a person of unsound mind might be directed to incur legal expenses. The amendment was brought forward because the board does not wish to become involved in matters more appropriate to the Taxing Master of the High Court or a county registrar.
Ms Harney: This amendment was brought forward by Senator Coghlan and I indicated that I would give consideration to it. While it is the intention that the PIAB will fully explain to a claimant the consequences of withdrawing a claim, I accepted the amendment, with some modifications, for the purpose of further clarity.
Ms Harney: Amendment No. 30 was brought forward by Senator McDowell on Committee Stage. It relates to the chief executive officer of the board and some of the board's functions such as producing an annual report. It lifts the restriction on the chief executive officer in respect of discussing policy.
Ms Harney: These amendments are all technical in nature. The purpose of amendment No. 2 to section 4 is to delete the definition of "prescribed" and was tabled by the Opposition in the Dáil. The definition is being deleted because there is no reference in subsequent sections to things being prescribed. The board can make rules about procedures under section 11 but there is no prescribing of documents for this or other provisions of the Bill.
Amendment No. 3 is linked to an earlier amendment and done on the advice of the Attorney General for technical reasons. Amendment No. 9 to section 21 corrects a grammatical error. Amendment No. 11 to section 25 was designed to correct an incorrect cross-reference to another section. Amendment No. 13 to section 26 involves a technical drafting point. Amendment No. 16 to section 34 was designed to correct an incorrect reference to another section. Amendment No. 20 inserts the word "an".
Amendment No. 23 is a technical amendment provided by the Attorney General's office in respect of cases involving more than one wrongdoer. It was designed to close off a potential loophole. Amendment No. 24 is a technical drafting amendment to make it clear that the definitions of "non-accepting respondent" and "non-participating respondent" in the relevant section also apply to section 43.
Mr. Leyden: I thank the Tánaiste and her senior officials and congratulate her on having the Bill, which forms part of her philosophy and policy, passed. An undertaking was given that it would be passed in this session and that operations would start early in January 2004. The Tánaiste and her officials have honoured this undertaking. I am glad that the House played an important role in passing the Bill. It is a major achievement to establish a new board, particularly as so much rationalisation has taken place in respect of State boards. We have taken a major step forward.
The board will be responsible for reducing the cost of insurance by approximately 30% during the next year or so. I hope it will achieve this goal. If it is not successful in the next five years, I am sure it will not be as a result of its not trying its best. However, I am confident that it will be a success.
Our concern on this side of the House has primarily been in respect of equality of treatment between claimants and respondents. We are also concerned with ensuring that once an insurer is prepared to undergo the PIAB process, this, in effect, should be an admission of liability. It should be fixed. Insurers should not have recourse to any other procedures afterwards. However, these arguments have all been dealt with. I have a final question for the Tánaiste, namely, what will be the likely commencement date?
Mr. O'Toole: I also wish to be associated with Senator Leyden's comments. I am probably more aware than any other Member of the work the officials have invested in this legislation during the past two years. I worked closely with them during that period and they have done an extraordinary job on behalf of the Tánaiste. I ask her to convey the thanks of the House to all of her officials on the way they dealt with this complex legislation.
This is greenfield legislation, which is probably the most difficult kind with which to deal. Items of such legislation are better introduced in the Seanad because the various issues involved can be debated at length. The territory covered by the Bill is tricky. It will be a major challenge to make the legislation work properly.
I am not sure if I would set the benchmark as high as Senator Leyden has done. However, clear benchmarks must be set in terms of what can be achieved during the next four to five years. There are approximately three years' worth of claims in the pipeline. It is, therefore, difficult to see how these will be cleared within the year. However, they will be dealt with in the period beyond. One of the benchmarks will be that we will be able to make a clear comparison between the timeframe in which claims are disposed of in the future and that within which they are dealt with at present. We can also examine the total cost of settlements, by which I mean the total cost of taking a case. It is hoped that in many cases that will now be simply reduced to the amount of money being paid to the claimant.
The third issue is how this will impact on premia. The main issue here is that in the small print of an insurance policy, we sign away by subrogation our right to fight claims. This means that insurance companies often find it cheaper to settle cases rather than fight them through the court. In respect of dealing with claims where there is no objection on either side, some Members did not quite understand what was going on here because the legislation is so novel. Under this legislation, if somebody has an accident he or she will make a claim and if the insurance company recognises the claimant is at fault and that it will at some stage have to pay out, it will simply agree to an assessment being done.
There was much discussion here about the assessment. It will be very simple. The claimant will fill in a form stating, for example, that he or she fell and broke a leg, lost six months' pay and incurred certain medical expenses. That is forwarded to the Personal Injuries Assessment Board. There will be no hearing, no representation, and no question of the claimant being brought before a board to defend himself or herself. The board will examine the case with reference to a book of quantum being established to decide what injuries, to use its terminology, are worth and somebody with a broken limb will be compensated accordingly. That is added to the income loss and the other expenses in assessing the award. The assessment is sent to the claimant and the respondent, namely the insurance company. If both agree, that will be the end of the matter and a cheque will be issued. If either party disagrees, it simply goes to court, as happens now. This process will not delay matters. We have a record of every case in which compensation has been paid in the past five years and we know how much time each has taken. This system will be far more efficient. Neither should there be any conflict in terms of the interests of legal bodies, even though we have had major rows about some of the representations from them. Legal representatives will be dealing with real cases. They are not being cut out. There will be work for them to do every day as there will still be a backlog no matter which way we do it.
This will now also extend to commencement dates, to which many Members referred. The board has decided that it intends to extend this legislation to motor insurance from next summer, beginning in the personal injuries area and eventually extending to motor damage. One issue hanging over us at the moment – we have not been officially informed of it but have read it in the newspapers – is that one of the legal bodies has referred this to the Commission on Human Rights on the basis that it is in some way unfair or contravenes human rights. That is a non-starter, because if that were the case we would all have to start again. However, we have been assured by the Office of the Attorney General and by the legal advice we have received that this is not the case. The referral seems to have been based on the making of a presentation to the board, which will not happen under this legislation.
I congratulate the Minister who has been criticised by one side because she was doing nothing about this and by the other side because she was doing something about it. She has set up a group to do something and has given her officials free rein. I have seen no sign of any political interference by her in the operation of this to date. On the contrary, her approach has always been to get this done quickly because of the need to have the board up and running. We have met deadlines and I also thank the House for co-operating in that regard.
Mr. McDowell: I would like to be associated with the compliments to the Minister. This legislation is extremely important. It is no exaggeration to say that it is the most important regarding the procedures that underpin the civil law we have had for decades. It will be very interesting to see how it works.
I support the Bill. However, I have some concerns about it. I wrote down what Senator O'Toole said. I know of his personal involvement in and commitment to the Bill. He underlined, unintentionally I am sure, my primary concern about the Bill when he said that this effectively kicks in when an insurance company recognises it is at fault. That is a potential difficulty with the Bill because it does not involve the insurance company necessarily recognising that it is at fault.
Mr. McDowell: I wrote it down. That is what the Senator said. I am not as sanguine as Senator O'Toole or, perhaps, the Minister about the bona fides of insurance companies. It may be that they will work with the board in the way that is intended. I hope that is what happens. However, if they do not, we may have to revisit that aspect of the Bill in a few years' time.
Mr. Scanlon: I could not remember which programme. She was asked when this would become law and replied that it would be before Christmas, to which she received a flippant rejoinder asking her "which Christmas?". I am delighted the Bill has gone through. On behalf of the many young people in Ireland I thank the Minister for giving them the opportunity to obtain insurance. Young people are not all road hogs. There are quite a number of good, decent young people, particularly in rural Ireland, who need a car to get to work. I thank the Minister on their behalf. Changes have been made already. In the first instance, young people are getting quotations, which was not happening two or three years ago. There has been a reduction in the cost of insurance to those young people and to the many people who run small firms and companies who are being forced out of work because of the cost of public liability insurance. A friend of mine who runs a very small business employing four people was last year quoted €19,000 for insurance. This year he has been quoted €11,000. Much more can be done but at least things are going in the right direction given that insurance premia were like telephone numbers before. I am delighted to be here on this historic occasion.
Ms O'Rourke: I thank the Minister and her officials. Political will drove this Bill to its conclusion, backed up by the competence of the Civil Service. I particularly thank the Minister, her Private Secretary and her office because there was much communication between her office and mine. We were determined to get the Bill here because it would get a very good airing. There was great co-operation on the matter. The Bill is a very important milestone for Irish citizens in all walks of life. It marks the fulfilment of a political commitment.
Mr. Morrissey: I join in complimenting the Minister and her officials. Successive Governments have grappled with the increasing cost of insurance. Premiums are coming down and the intervention of the PIAB in this area will lead to better competition in the market. We, in this House, are aware of the number of Bills in the system, but the commitment and determination of Government has been ably demonstrated by the speed with which this Bill has come before the House.
Six weeks ago, when asked during a Private Members' motion when this legislation would be introduced, the Minister said it would be in place before Christmas. Many thought it would not happen and the sceptics said it could not happen. I am delighted that, with the co-operation of the Opposition, the Bill has been passed today. It is a good day for all citizens. It demonstrates what this Government has done in the area of insurance.
Tánaiste and Minister for Enterprise, Trade and Employment (Ms Harney): I acknowledge that the Bill could not have been passed so speedily without co-operation from the Opposition parties in this and the other House. We dealt with 36 amendments in ten minutes and have now spent 20 minutes dealing with the Final Stage. Perhaps we are unable to put things in perspective.
When travelling here to deal with this Bill my senior official, Mr. Michael McKenna, told me he had received his insurance quote yesterday and it was down from €900 to €500, a 45% reduction. He shopped around and got the best deal. I encourage everybody to continue to shop around. There are, as was illustrated by the IFSRA survey, huge variations in the market. The good news is that the cost of insurance is falling rapidly but premiums need to fall further. We have not yet reached an ideal situation. Premiums are reducing because the number of personal injury claims are down substantially. The anti-fraud campaign is working.
The board will be claimant friendly. It will obtain for genuine claimants what they are entitled to in less formalised and traumatic circumstances than going down the court route. A genuine claimant, having suffered personal injury, must find it enormously difficult to have to endure a court process. This will be easier, speedier and, I hope, a more effective way of dealing with claims.
I acknowledge the assistance of the officials involved in preparing this legislation, Ms Jennifer Casey, Ms Adel Billane, Ms Joan Kehoe, Mr. Kieran Harrington and Mr. Michael McKenna who, I am told, is taking a career break at the end of March to travel and see more of the world. I do not know if he is leaving as a result of work pressures. I want to especially mention Mr. Stephen Watkins who has driven this legislation.
Ms Harney: He was given sole responsibility for the legislation approximately one year ago. Civil servants often have five or six matters to deal with and it is difficult to deal with them all at once. In conjunction with the Office of the Attorney General, Mr. Watkins has worked incredibly hard on the Bill, including at weekends, during late nights and early mornings. The Bill could not have been dealt with so speedily but for him.
I hope to be in a position to announce the appointment of the chief executive officer in the next few days. The contact for the IT system for the PIAB has been entered into and a tender has been accepted. We are engaged in final discussions on suitable premises. The chief executive officer will have to recruit staff but it is our intention that the commencement order will be in place early in the New Year.