Thursday, 28 March 2019
Civil Liability (Capping of General Damages Bill) 2019: Second Stage
I move: "That the Bill be now read a Second Time."
I welcome the Minister to the debate on this Bill. I thank my colleagues in Fine Gael for allowing me bring it forward. I also thank the Minister for being present and for his advice in my discussions with him. I thank my work colleagues in the office, Fintan and Adam; the various groups with which I consulted such as the Irish SME Association, ISME, the Irish Farmers' Association, IFA, and the Vintners' Federation of Ireland, VFI; and the legal personnel to whom I spoke about this legislation. I must also acknowledge the work the Government has been doing on this. The former Minister of State at the Department of Finance, Deputy Eoghan Murphy, set up the cost of insurance working group and, following this, the Personal Injuries Commission, PIC, under Mr. Justice Nicholas Kearns, was established, which brought forward a telling report. The cost of insurance working group made a number of recommendations as well.
I will relate a couple of stories. James is a young driver. He is 22 years of age. He has his own car valued at €1,800. He goes to look for insurance on it. He cannot get fully comprehensive insurance. All he is offered is third-party fire and theft insurance. The first insurance payment he was supposed to make was €4,000. He eventually got this down to €2,000. A small publican living in the locality saw his insurance rise from €5,000 to €7,000 over four years. Lately I have met people who own play centres. Rachael is a woman who has a business in which she ensures that everything is done properly. She has had a couple of claims against her, which she contested. On one occasion the judge mentioned the fact that she was not negligent in the business she had run and that what happened was purely accidental. The claimant, a young child, received €26,000. Her insurance has risen to in excess of €15,000. There must be some cases in which personal responsibility is carried. Some play centres have experienced insurance increases of 300% in recent years. A number of them have had to close because of this insurance increase.
When I started doing research on this, I inquired as to why premiums are so high and there are a number of reasons. I refer to insurance companies' profits, which in recent years have been excessive. The Minister of State at the Department of Finance, Deputy D'Arcy, said insurance companies must pass on some of the profits they are making back to premium holders and reduce premiums. Levies are another reason premiums are so high. Government levies on motor policies are currently 7%. This is associated with failed insurance companies in the past, such as Quinn Insurance. We will all be paying 2% ad infinitumto recoup the money the State paid into that. Fraud is another reason. Insurance fraud is probably at an all-time high. The Judiciary, in fairness to it, is starting to recognise this and is working with insurance companies to reduce the volume of fraud. Claims, future claims and awards happen to constitute the most costly part of an insurance premium. Up to 70% of one's insurance premium, whether it is for one's car, one's home or one's business, is associated with awards. The awards that have been made can be broken down as follows: of the awards paid out through the courts or the Personal Injuries Assessment Board, PIAB, 90% to 95% are for under €50,000. This has increased by 42% since 2011. Most of these awards come through the courts and they are mostly small claim awards. Regarding PIAB, a body that was set up in 2003 to try to reduce insurance costs, the average payout for a whiplash claim in 2018 was €18,581. According to PIAB, 70% of all claims concern whiplash.
I then looked at comparisons with other countries. The PIC under Mr. Justice Nicholas Kearns found that insurance awards here are 4.4 times higher than in the UK. I refer in particular to whiplash claims. In the UK, a green book is used, whereas here we use a book of quantum. The green book pays out between £500 and £3,000 for small injuries. In the book of quantum, this can rise to up to €15,700 for similar claims. The cost of insurance across Europe for small, minor injuries, general damages ranges from zero in France and Finland up to €6,000 in Germany, so our awards are way out of line. As a result of this, the cost of insurance here is higher. The average car insurance premium in the UK is £477 for all motor vehicles, in comparison with the average premium for car insurance here, which, according to AA Ireland, across all age sectors, was €998 in 2018.
PIAB was established to remove as many cases as possible from the courts. As a result, the cost of insurance dropped for the next ten years. However, PIAB is currently basing its awards on the book of quantum. The book of quantum is based on historical awards made through the courts. Sixty per cent of all cases with which PIAB deals are motor-related. Of these, 80% of the cases dealt with relate to whiplash. The PIC report makes ten recommendations, key among which is the Judicial Council Bill 2017, which will come before the Seanad next week. The PIC recommends that guidelines be instrumental. However, are guidelines strong enough, and do the courts have to take the guidelines on board? The key is consistency of awards. When a case is taken before a court, it depends on the judge as to how much is given out as an award. Judge A could award €20,000 while Judge B could award €10,000. There seems to be no consistency in awards. The Law Reform Commission, LRC, has been tasked with looking into legislation which may be robust so as to be able to reduce these awards.
I have considered whether or not this legislation is constitutional. The Supreme Court, in Sinnott v. Quinnsworth, put a cap on awards that can be made under general damages. This was done in 1984 to the tune of £150,000. Section 49 of Civil Liability Act 1961 provided for a cap of IR£1,000 on certain types of damages. Since then, various Ministers have increased this to €35,000.
The Bill itself is straightforward and simple. The first section deals with the definitions and interpretations of the various terms used throughout the legislation. The key definition relates to "general damages". This means "compensation for non-monetary damages for pain and suffering incurred by a claimant and which is sought to be recovered as part of a claim for personal injury".
Section 2 deals with the maximum level of damages for personal injury. This requires the Minister to make regulations.
Section 3 concerns considerations to apply to the making of the regulations, that is, what the Minister must take on board. He or she must take on board what is fair and proper and right for each claimant.
Section 4 states that the regulations laid down by the Minister must come before both Houses of the Oireachtas and be passed. The purpose of this is to ensure we scrutinise the regulations.
Section 5 deals with a review of the regulations. Section 6 deals with the fact that the book of quantum must be brought into line with the regulations the Minister makes.
Section 7 deals with the operation of the Bill, allows for a review when it is eancted and takes into consideration those people who should be considered with regard to the review.
Section 8 sets out the Short Title.
I have outlined some of the many factors that must be taken into consideration as we seek to deal with high insurance premiums. This legislation seeks to deal with the amounts of the awards that are being paid out at the moment, which is a key factor. On the basis that it is trying to address this issue, I commend the Bill to the House.
The Minister is most welcome to the House. Fine Gael Senators are proud of the work done by our colleague, Senator Lawlor, to bring this Bill to the floor of the Seanad. The Senator was an esteemed Member of the Lower House for five years. Unfortunately, he was not returned there at the last election. Thankfully, he is now a Member of Seanad Éireann. I expect that he will have a short stay here because he will be returned to the Lower House at the next election, and for good reason.
Not every Member of this House introduces Private Members' Bills. Even though Senator Lawlor has been a Member for just a few months, he has introduced this Bill, which has its finger on the pulse. I consider the level of payouts that are being made as insurance compensation to be a national scandal. There are three elements to this scandal, the first of which is the level of compensation that is being given in certain cases. Senator Lawlor went into minute detail when he provided international comparisons. Ireland is among the most generous countries when it comes to compensation in the insurance sector.
The second element of this scandal is the exceptional profits being made by all the insurance companies. If one visits the website of the Companies Registration Office, CRO, one will be able to see the extraordinary profits that certain companies are making. They are in the business of making money and - fair dues to them - they are well able to make it. Unfortunately, they do not seem to have a sense of social responsibility that would cause them to be fair to those who support their profit-making ventures. People often talk about vulture banks and vulture funds, and they are right when they say that what is going on with vulture funds is appalling. I suggest that what is going on with insurance companies is also appalling. A young driver can be charged up to €6,000 to get insured for the first time. That is discrimination against young people. We are trying to encourage young people to stay in Ireland. We often give out about nurses who go abroad. Some of them want to see the world, but many of them go abroad because they simply cannot afford things like rent and car insurance. Where will a recently qualified nurse who is starting off in the profession come up with €4,000 or €5,000 to pay for insurance? When I was knocking on doors in Corofin, County Clare, two weeks ago, a lady who answered one door told me that she runs a business in Ennis and that her insurance premium increased by an incredible 60% last year. It is difficult for businesses to keep sustaining that type of increase. Who is to say that her premium will not increase by a further 60% next year? There is nothing to stop that from happening. It is difficult for people to keep their staff employed and keep their businesses going in such circumstances. It is difficult to support the economy and to support jobs when this is going on. I have great regard and respect for people like Pat McDonagh who faced down what was going on with the insurance industry a number of years ago when a number of fraudulent claims were made.
That brings me to the third element of the scandal in the insurance industry, which is the number of fraudulent claims that are made. All citizens have a responsibility to call out people whom we suspect of submitting fraudulent claims to insurance companies. Everybody suffers when such claims are made. When we watch advertisements on television and listen to them on the radio, it is pointed out to us that everybody ends up paying as a result of fraudulent claims. The three issues I have mentioned are interwoven into one. Senator Lawlor is reflecting the desire of the people of Ireland for us to deal with the vulture insurance companies and to cap the outrageous claims. Anybody who gets injured deserves to be compensated. There is no question or doubt about that. However, it has to be fair, respectful and appropriate.
I have listened to what Senators Lawlor and Conway have said and I agree with their sentiments. I hear all the time from people who are facing significant premiums for their businesses or their own cars. It is outrageous. However, the Bill does not represent the way to go in this regard. It is probably unconstitutional. Perhaps the Minister can tell us whether the Attorney General has looked over it. If not, why not? If the Attorney General has not given the green light to this Bill, why are we debating it? I am highly dubious that this Bill would get the green light by him. It is curious that we are wasting time debating this Bill when we could take measures that would help to tackle the high premiums people are facing.
Senators Lawlor and Conway referred to fraudulent and exaggerated claims. The way to tackle this issue is to have a dedicated Garda fraud unit. We all know of fraudulent claims that are being thrown out of the courts but are not being tackled thereafter. Why are these criminal matters not being systematically reported to the Garda and investigated? People are chancing their arms because they know there are no consequences. This is a very real issue.
If this Bill had been introduced by Fianna Fáil Senators, we would have been accused by those on the Government benches of being populist and irresponsible. Instead, this irresponsible and populist Bill is being introduced by the Government. I am completely baffled about that. Fianna Fáil genuinely wants to tackle high premium costs. We have been to the fore in tackling high insurance premiums.
The fact of the matter is that people who are involved in accidents deserve to be compensated fairly for any injuries they incur. If we scare people away from the courts and blacken the name of everybody who brings a personal injuries claim, we will not serve the cause of ordinary people who are injured through no fault of their own and deserve proper compensation. The PIC has recommended that when the judicial council is established, the Minister for Justice and Equality should ask it to compile guidelines for appropriate general damages for various types of personal injuries. It is completely outrageous to think that the Legislature could put a cap on general damages. It is a bonkers Bill, to be honest. It is populist. I know it will get Senator Lawlor the local headlines he is looking for.
We need to do something proper to help people. We should set up a dedicated Garda fraud unit to deliver some results. We need to tackle the anti-competitive practices of the large insurance companies and the outrageous profits they are making. We should stop targeting ordinary people who are injured through no fault of their own.
It is hard not to think that there is an element of truth in what Senator Clifford-Lee outlined but it is important to take the Bill as presented to us. There certainly will be different views on its intent and its constitutionality, and on whether better and more effective and practical proposals could be brought to this House. I wonder about that but we are where we are. It is no mean feat to get a Private Members' Bill to the floor of this House. Senator Lawlor has been successful in that regard and fair play to him on that.
I welcome the opportunity to contribute to the debate and to speak to the topic of insurance more generally. The Bill is one that we in Sinn Féin will lend its support to on Second Stage, although not without reservations. We would bring forward amendments were it to progress further.
As has been stated by Senator Clifford-Lee, questions arise as to the Bill's constitutionality and how workable it is more generally, given that damages and personal injuries are more complex and specific to the person than may appear on the face of it.
I have concerns about section 2 and the limiting of any claim that can be made for general damages as defined under the Bill. While in theory it may seem a logical proposal, it does not take into account what may be considered as general damages more broadly, and how these may be fluid and how the nature of any injury incurred may change or develop with the passing of time. For example, in a case of someone who incurred life-limiting injuries and whose life expectancy had been estimated at 18 months taking a personal injury claim and the court settling on the amount there and then but two years later he or she is still alive and requires further expensive medical care, where does his or her claim sit? It is unclear in that regard. Section 2(3) appears to make an attempt to give scope to the Minister but that could become burdensome and tedious in time, and it may undermine the intention of the Bill in its totality. The same may well apply to sections 3 and 6, respectively.
On section 7(4), it should be a mandatory requirement to consult such groups rather than leaving it to the discretion of the Minister, with all respect to him or her, and I am not quite sure why such a requirement is not provided for. Either way, my party's concerns may well be unfounded, and addressed by section 3. A High Court case in the middle of last year reiterated the binding principles laid down by the Court of Appeal and by the Supreme Court, which must be applied in calculating the appropriate level of general damages for any personal injury. The case concerned a claim by a Garda for compensation in respect of a soft-tissue injury to his hand. Counsel for the applicant, in reliance on the book of quantum, suggested an award of €21,700. The court ultimately concluded that the appropriate compensation was €5,000. While this case related to the Garda compensation scheme, the judgment expressly referred to all personal injury cases. It was determined that in assessing damages the court is obliged to be "fair" to both parties and that any award must be "proportionate" within the scheme of awards for personal injury damages, and, further, that any such award must be objectively "reasonable" in light of the common good and social conditions. As I stated, the general principles of the Bill are fine and I understand the good intentions of An Seanadóir Lawlor but I hope the Bill progresses so that we could tease these matters out further.
On the insurance issue more generally, the motor insurance industry and the Central Bank have been accused of throwing consumers to the wolves over the cost of car insurance, in particular, in years gone by. I am not sure whether this trend has continued but I am aware, at least anecdotally, that many drivers are still experiencing increased premiums despite no change to their driving history.
In a hard-hitting report in 2016, the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach stated that the motor insurance industry had deliberately been hiding key information from public view and engaging in cartel-like behaviour. The report stated that all witnesses who appeared before the committee, except for the insurance industry itself, had highlighted the absence of data-sharing and a complete absence of transparency across the sector as a serious problem. The absence of this information meant it was impossible to get to the root cause of motor insurance price increases, according to the committee. The report also suggested another cause of the spikes in the cost of motor insurance which have resulted in some drivers' premiums going up by more than 100% in just two years was insurance companies had been using their motor insurance books to bolster shortfalls in investment income in other areas. The Competition and Consumer Protection Commission, CCPC, and the Central Bank also came under fire in that report. The committee stated that the CCPC had insisted its remit was economy wide and limited to enforcement of competition law, something which "is of little comfort to suffering motorists who feel exploited and abandoned".
In regards to insurance fraud, Sinn Féin received documents under the Freedom of Information Acts last year, which documented a series of missed deadlines by Insurance Ireland since early 2017 to progress the proposal to set up an insurance fraud unit within An Garda Síochána funded by private industry. The independence of An Garda Síochána is essential, and a direct funding relationship with private interests undermines that independence. This is in a context where the insurance industry is under investigation by the competition authorities, in the State and at EU level, over anti-competitive practices. Any such unit should be funded by the State and, at a cost of approximately €1 million, this is more than within the capacity of Government.
It is clear now that Insurance Ireland has, despite protestations that fraud is a cause of increased premiums, decided instead that tackling fraud is not an important part of its agenda. This unit would now be up and running were it not for such delays. It is probably a conversation for another day, but an important and worthy one nonetheless.
I welcome the Minister and commend Senator Lawlor on bringing forward this Bill.
I support the thrust and principle of the Bill. I am not a legal expert and I cannot speak on the constitutionality or anything else. The general thrust and principle of it is without doubt.
It is unacceptable that the personal injury payouts continue to increase at a phenomenal rate and are totally out of line, as Senator Lawlor outlined in his contribution, with the rest of Europe. As for why this is the case, there probably are other factors. I am not aware of the minutiae. There is no doubt insurance companies have many questions to answer because of the spiralling premiums. We all have plenty of examples of that. The insurance companies are not losing money but are making handsome profits.
Other factors have been mentioned, such as levies and fraud. My observation on the fraud issue is that more cases seem to have been thrown out in recent times. I very much welcome this because previous awards were mind-boggling - not only their amount but the fact that awards were made in certain cases at all. I welcome the fact that more fraudulent cases seem to have been thrown out in recent times.
I was interested in the contribution of Senator Clifford-Lee, who has left the Chamber. She accused Senator Lawlor of being populist and seeking headlines. There is a saying I will not repeat here because it might be unparliamentary. The Senator herself is certainly a dab hand at both of those topics. As somebody who observes headline seekers in both politics and sport, I note that the Senator has starred in that area. Perhaps she has left the Chamber to seek a few more headlines.
I would love if we could have a political all-star awards for sledging around here.
I welcome the Minister. I thank Senator Lawlor for bringing this Bill forward, although I have concerns about it.We all agree that insurance premiums are far too high but I am not convinced that this Bill will address the problem. While its aims are laudable, I have a number of issues with it.
I note this is not a Government Bill, but a Private Members' Bill which just happens to be supported by all Fine Gael Senators. I am wondering why that is the case. The Government has hinted at capping general damages but it has not yet formally adopted the idea. The Minister of State, Deputy D'Arcy, suggested a couple of weeks ago that the Attorney General would need to examine the constitutionality of the proposal. Presumably we can conclude that the Government does not support this legislation but is happy for it to pass all Stages in this House in the knowledge that it will perhaps languish on the Dáil Order Paper without ever going anywhere. If that is the case, would that not do a great disservice to this House?
The Bill seeks to cap general damages by ministerial order or regulation, thus fettering the discretion of the Judiciary. Limiting judicial discretion may sound good in theory to some. It may even allow large awards to be capped. However, I have a fear that it might create a new and even worse kind of injustice, where those who endure a serious personal injury could end up being inadequately compensated. No ministerial order or regulation, no matter how carefully drafted, can possibly cover all eventualities. Each case is different and there are always unforeseen circumstances. That is why judges should be allowed some discretion. The 2016 book of quantum, for example, makes it clear several times that "every claim will continue to be dealt with on its individual merits." It seems that this principle would now be scrapped by this Bill. In future, regardless of the individual merits of a particular case, damages would be capped by regulations.
The Bill seems to ignore that the Judiciary has recently intervened to implement a fairer means of quantifying awards of general damages. Two recent cases in the Court of Appeal, Payne v. Nugent in 2015 and Nolan v. Wirenski in 2016, laid out a new formula for assessing damages so that awards would be fair, proportionate to the injury suffered and reasonable in the circumstances. Given that these cases arose just two years ago, I wonder if the Bill, in its genesis, considered how this new formula has worked within the courts in that time. Should it not do so before seeking to limit judicial discretion in relation to damages?
In a broader sense, I wonder if this Bill is a continuation in form of a pattern of populist attack on the Judiciary by Government in the recent past. We had the 2011 referendum on judicial pay. We have spent 75 days in the Seanad discovering the nonsense legislation of the Minister for Transport, Tourism and Sport, Deputy Ross, namely, the Judicial Appointments Commission Bill, which I suspect is as much an embarrassment to the Minister for Justice and Equality as it is to anybody else. We also had the absolutely daft suggestion last November by the Minister of State, Deputy Michael D'Arcy - I say this with respect for a gentleman whom I like - that high whiplash awards be dealt with by referendum to amend the Constitution so as to bring judges to heel. The common thread running through all of this is a type of "us versus them" mentality with respect to the Judiciary. Instead of seeing the courts as the third branch of Government and an important check on the abuse of power by other branches of our democracy, there is a suggestion that judges are some sort of cosseted elite acting against the best interests of citizens. While that might be true in individual cases, it is unfair as a general attitude. Is this Bill a manifestation of this pattern that I am positing? I certainly hope that is not the case but I worry that the Government has a bit of form, to say the least, in this regard.
Where does this Bill leave the book of quantum? The book of quantum was last revised in 2016 after a comprehensive review of 51,000 personal injuries cases during 2013 and 2014. It should, therefore, give a very accurate picture of the level of awards. Section 6(2) of the Bill states that the book of quantum will continue to be revised from time to time to reflect the recommendations of the Personal Injuries Commission. What is the point in continuing to have a book of quantum to guide judges if the damages for various injuries are to be capped by ministerial regulation under this Bill? Does the Bill not do away, more or less, with the need for a book of quantum by scrapping the role of the Personal Injuries Commission in revising it and placing it effectively in the hands of civil servants, to be rubber-stamped by the Minister and each House of the Oireachtas? This is what I mean when I talk about a certain lack of regard for the proper role of the courts and a certain encroachment by one branch of our democracy on another.
One of problems highlighted in recent years has been that insurance companies are too quick to settle rather than fighting suspect claims. Somebody mentioned Pat McDonagh in a positive vein in that regard and I agree with that. In the past year or so, we have seen evidence that the mindset is changing with several suspect cases being fought and won by insurance companies in high-profile fashion. Surely we should wait to see if this trend continues before resorting to fairly drastic legislative intervention?
In summary, this Bill is well-intended but premature. It is draconian in its attempt to limit judicial discretion. It takes no account of recent case law, which seems to limit excessive damages awards, and it intervenes in cases at a time when insurance companies are finally showing a willingness to fight dubious claims. For all of those reasons, I am inclined to oppose it.
I am not here to speak on behalf of any of my colleagues, including my party colleague who has spoken, but to put a number of matters on the record, including the fact that Fianna Fáil will support the legislation moving to the next Stage. My party supports the objectives of the Bill, of which I am especially conscious as Vice Chairman of the Joint Oireachtas Committee on Finance, Public Expenditure and Reform, and Taoiseach. The committee spent weeks dealing with motor insurance and, subsequently, employer liability and invited in representatives of vintners, restaurant owners and various other groups, including the Alliance for Insurance Reform, who outlined many of the problems raised by previous speakers. While I was not present for the earlier part of the debate, I watched proceedings in my office and missed only a small part as my made my way to the Chamber.
This is a useful debate but there is a concern, particularly in my party, that the legislation may not be permissible under the Constitution. I ask the Minister to indicate if that is case and whether the Attorney General has examined the Bill. If the Attorney General has not done so, perhaps he should before we spend more time on it.
I note Committee Stage of the Judicial Council Bill 2017 is scheduled to be taken in the House next week. This is a very positive and long overdue development. I am not speaking as a solicitor and I acknowledge that some members of the legal profession blame the insurance industry, while the insurance industry tends to blame the legal profession. The joint committee engaged in an awful lot of toing and froing on this issue which it discussed for weeks. It also published a very good report on motor insurance towards the end of 2016, which is well worth reading. I recommend it to Senator Lawlor who was not a Member of the House at the time. Some of the report's recommendations were similar to those in the report of the cost of insurance working group.
As I am also addressing the Minister, I will wait for Senator Mullen to-----
I will resume now and I apologise to those who may be watching proceedings. I decided to wait because there is no point in talking to myself.
People blame each other for this problem. Insurance company profits, particularly in the motor insurance industry, were not particularly good for a number of years.If they were, we would have had many more entrants into the market. They have gone up in recent times, not because insurance payouts have decreased but because these companies have managed to inflict pain on every premium holder who has had to pay motor insurance or public liability insurance. The insurance companies have made money by charging all of us more. Insurance companies are not fighting cases in the way I would like them to. Perhaps that is because they feel it is more cost-effective to deal with the cases themselves, rather than risking the chance of going to court. I appreciate that one of the objectives of this Bill is to provide greater certainty. Senator O'Reilly is trying to distract me now.
I am not going to go on long. I am going to wrap it up shortly. I notice that Senators Noone and Colm Burke have not put their names to the Second Stage motion on this Bill. To the best of my knowledge, they are both members of the legal profession. I am intrigued to know why their names are not on the list. Maybe it is just a typo. It is interesting that 18 of the 20 Fine Gael Senators have put their names to this motion, but two of them have not. Perhaps Senator Lawlor might explain why the two Senators in question have not put their names to it. Maybe it is because they are legal people. Maybe they do not think it is something they can sign up to. They might think there is a constitutionality issue or something or maybe they just did not manage to put their names to the motion.
There are many other things we can do in this area. I appreciate that the Minister, Deputy Flanagan, is not the Minister who has been dealing with insurance generally. However, I am sure this issue, like many other issues, comes across his desk. The Minister of State, Deputy D'Arcy, has been dealing with the cost of insurance working group and many other tasks, as did his predecessor, the Minister, Deputy Eoghan Murphy. Some of the group's proposals have been implemented but many of them have not. The Minister of State has said on a number of occasions that exaggerated claims are not fraud. I think he may have finally got around to the idea that they are fraud. While staging a claim is worse than exaggerating a claim, it is still fraud to exaggerate a claim. It involves claiming for money to which one is not entitled. Saying that one's claim is far in excess of what it should be is fraud in my book and I think it is fraud by any definition of fraud.
We need a Garda unit to investigate such cases. We need prosecutions. If one gets caught trying to rob a bank, hopefully one will be convicted and will get some kind of sentence. If one is proven to have made a fraudulent insurance claim, the claim is dropped and no payment is made but one does not face any sanction, punishment or penalty for making that false claim. Maybe there is a penalty somewhere in legislation, but it is not being followed through by anybody. That needs to be looked at as well. The incentive has to be removed from people making fraudulent claims. I appreciate that is why damages are being capped. If whiplash claims attracted payments of €2,000 rather than €17,000, I am sure some people would not make the claims they are making. It is a very lucrative market for those who want to get involved in it. I happen to have been rear-ended at one stage. I got the material damage claim for the car and I never even thought about whiplash. I think I am in the relative minority of people who do not pursue whiplash claims.
There is much work to be done by the insurance industry to fight cases harder. The legal profession should not be so willing to fight for every single claim, particularly if it considers it to be fraudulent. Of course nobody is trying to say that somebody who is entitled to a payout, having suffered an injury when the fault was not theirs, should not be looked after. That is what insurance is for. If one examines the statistics for whiplash payments in this country and elsewhere, one will find that no payments at all are made in respect of whiplash in other parts of Europe and the world. In some cases, cash is provided for care but payments of €17,000 or €18,000 are certainly not made to people who think they have a twinge or slight pain in their back. There are many examples in the public liability area of people who said nothing at all for two years - people are entitled to make claims after two years - only to arrive into a premises and say that they slipped there two years earlier. The staff may all have changed and the camera footage may all be gone because of GDPR.
There are many things we can do in the insurance area. I commend Senator Lawlor on raising this issue and tabling a Private Members' Bill. I worry about the constitutionality of the Bill as it stands. As a party, Fianna Fáil is happy to let this Bill go to Committee Stage. We have reservations about the legislation before the House, but we are prepared to discuss it. The Minister might outline whether this Bill enjoys the support of the Government. Will it require a money message at any stage? I will leave it at that for now.
I welcome the Minister to the House. I thank Senator Lawlor for bringing this Bill before us. I am sure he is absolutely delighted that the Seanad is still here. I remember him arguing violently and viably that it should be closed. If it had been closed, he might not have had a platform for the introduction of this legislation. I give the Bill a general welcome because I think manners, limitations and boundaries have to be put on how and when insurance payments are made and what amounts are paid. I welcome the Bill in that context. I would like to ask four simple questions about this legislation. The Minister may be able to answer them. If he cannot do so at this Stage, maybe he will be able to do so on Report Stage or whatever.
First, what is the objective of the Bill? I did not get an explanatory note with it. It does not appear that the legislation imposes any type of limitation on any type of personal injury. If I understand the Bill and have read it correctly, it envisages that the Minister will control the limits on damages paid to someone who gets a bruise - or soft tissue damage, in legal language - or to someone who ends up a quadriplegic as a result of an accident. Why does Senator Lawlor want the personal injury limits to be controlled by a Minister? Why is it better to have damages assessed by a Minister rather than a court? As we know, damages in various situations are very different depending on the elements of the injuries. The situations and circumstances can be very different on investigation.
Second, is it not the case that this legislation goes against Government policy? In January 2017, the Minister of State at the Department of Finance, Deputy D'Arcy, produced a significant report on the cost of insurance which contained a multitude of recommendations. It recommended that the Law Reform Commission should be asked to consider how damages could be regulated by legislation. The Bill before the House, which is sponsored and proposed by the Government, seems to circumvent that recommendation. Maybe the Minister, Deputy Flanagan, will answer that question.
Third, what is wrong with judges assessing damages? We all know about some of the jaw-dropping cases in which people receive substantial amounts of money in respect of accidents that have happened, and most of us might think such payouts are not warranted. When we also see horrendous cases coming through the Four Courts in which millions of euro are awarded on foot of tragic accidents or medical negligence which caused lives to be changed forever, we do not have the same reaction. Why is the Minister not being asked to consider the individual facts of an individual case? Why is he better suited than a judge to assess damages? These serious questions must be asked as we consider Senator Lawlor's Bill.
Fourth, is it not possible that the Judicial Council Bill, which was introduced in this House in 2017 but has not been debated since then, could fix this problem? The Bill in question provides for the creation of a judicial studies committee which would regularly examine damages awards and publish that information to ensure some people do not get more money than others simply because one judge, rather than another, happens to consider the case on the day it comes before the courts. For many years, a committee of the UK judicial council has been constantly studying the awards for damages. As I understand it, the amounts have been reduced as a consequence.
I have put these questions to the Minister because this could be a problematic area in the future. I have other reasons for raising the delays with the Judicial Council Bill 2017, including the provisions with regard to minimal custodial sentencing, etc. The Minister might answer the questions I have asked. If I do not get some very good answers, my belief in the Senator and his Bill could falter.
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.
I join my colleague, Senator Reilly, in welcoming the Minister for Justice and Equality, Deputy Flanagan, to the House. I acknowledge the Minister's interaction with the Members in this Chamber. We greatly appreciate his proactive and professional approach to this very sensitive Ministry.
Before I comment on the Bill, I congratulate my colleague, Senator Lawlor, on taking the initiative and being so proactive in bringing legislation before the House. With respect to my distinguished colleague, Senator Marie-Louise O'Donnell, it is possible in a democracy to take a stance and then use the assembly for the good of the people.That said, I know the Senator made her comment in a good humoured way.
I acknowledge the great contribution of Senator Lawlor today but would make the point that nobody is suggesting that people who are injured would not be adequately rewarded. That is not a proposition that anyone here would make. We all have families and friends and none of us is suggesting that we should live in a country like that. People should be adequately compensated for loss of earnings, medical expenses and so on because there are so many dimensions in the aftermath of an accident. That is not at issue. Furthermore, what is also not at issue or being challenged by this legislation is judicial discretion. It is still possible, even if we alter the book of quantum, for individual judges to exercise their discretion. In the context of the separation of powers it is the function of the Houses of the Oireachtas to provide legislative direction. If one were to speak privately to judges in this country, many would say that the quicker these Houses give them direction, the better.
The background to this legislation merits attention. The statistics are extraordinary and have been well rehearsed at this stage. Payouts in this country are four times higher, on average, than in the UK. The average motor claim here is €21,000 compared with €4,000 in Britain, €1,500 in France and €4,500 in Germany. Statistics like that cannot be ignored, including those for third party injury claims costs. As a direct result of the size of the payouts here, the cost of insurance in this country is extraordinary. My son is learning to drive. He will be supervised during the entire process and will be accompanied by a qualified driver at all times. In order to put his name on our insurance policy, our premium will increase from just over €600 to €1,800. That is the cost of including the child, who will be fully supervised, on our policy. Were he not to be supervised, the insurance would be null and void anyway. That is the level we are talking about. My family owns a small retail outlet and the insurance on it costs at least €3,000 per year and it was as high as €6,000 at one stage. That is not sustainable. The costs of insurance generally are just not sustainable.
The need for this legislation and for a debate thereon with a senior Minister is obvious. In terms of jurisprudence, in the Sinnott v. Quinnsworth case in 1984 the Supreme Court found that the Oireachtas had the right to set a limit to the book of quantum or to apply upper limits to awards. While one could argue for exceptions to be made in certain High Court cases, there is no basis for this in the context of minor claims. It is a questionable proposition that we would allow uncontrolled awards. The Bill aims to cap the level of awards. It proposes the alteration of the book of quantum and seeks to prevent excessive claims. What Senator Lawlor wants to do is establish principles and best practice in order to contribute to finding a solution to the problem of astronomical insurance costs that are closing small businesses and putting motorists off the road. There is a famous song called "No Train to Cavan". In my county there are no trains and no buses except those that run along the main arteries so people need cars to get to and from work. Motor insurance, in that sense, is a tax on work.
Senator Lawlor's Bill seeks to regulate the situation with regard to awards. I am sure the Senator would be happy to have his Bill amended to take account of any constitutional issues that may arise, legal advice from the Attorney General or the views of the Minister. The legislation could be amended on Committee Stage. I congratulate Senator Lawlor on this legislation which seeks to provide a solution to a significant problem. The cost of insurance, both commercial and motor, is crazy and the Senator has identified the fact that excessive awards are a contributing factor. He has used evidence from across Europe to demonstrate that payouts here are excessive. His Bill proposes a solution to this and, at a minimum, the major elements of this solution should become law.
I thank Senator Lawlor for bringing this Bill before the House but would argue that there are lots of limitations around it. When one looks at the insurance industry here one sees protectionism and a fundamental lack of transparency. The figures for car insurance do not add up. On 19 October last, the Government announced the abandonment of its plan to establish a claims register of injury compensation cases. We need such a claim by claim register if we are to be able to argue the facts properly. One of the challenges when analysing the motor insurance market here is the lack of hard facts and the paucity of published data. This was highlighted by the former chairperson of the Motor Insurance Advisory Board, Ms Dorothea Dowling, who has done an enormous amount to tackle problems with the insurance sector. She said that at a headline level, the annual premium income for insurers on motor and liability is around €2.3 billion. However, only €276 million in compensation can be accounted for in 2017. This is a data black hole of approximately €2 billion every year. That is why we need a claim by claim register, separate from the proposed fraud register. Having such a register would add considerably to the transparency of the insurance sector. Until we get that transparency and stand up to an industry that is holding policyholders to ransom, we will not really tackle the problem.
According to CSO figures, insurance costs have dropped by around 23% but when I conducted my own survey, I found that not to be the case. I am not just talking here about anecdotal evidence. I received hundreds of replies, all of which showed that insurance costs continue to increase. We cannot rest on our laurels on the basis of figures from the CSO telling us that insurance costs are falling. We know that we need to implement the 67 recommendations of the Motor Insurance Advisory Board's report. We also need to see a change in the corporate culture of the financial services sector. We need to consider the role of the Central Bank in protecting consumers. A separate financial conduct authority, as is the case in the UK, would certainly help the situation here.We also need to know the outcome of the 2017 EU anti-trust investigation into the insurance industry. It is impossible to find the hard evidence until we do. I call on the Competition and Consumer Protection Commission to be active on the 2016 investigation in which price signalling by the insurers was identified. Insurance continues to be a huge problem not only for the motor industry but throughout the sector.
Another issue I am concerned about is Brexit and the number of people with insurance who are receiving letters. In one case, the owners of a pet farm who travel to various festivals were paying €700 for insurance from an English company but in recent weeks they received a letter telling them to look for insurance somewhere else. They cannot get insurance somewhere else. This is a small off-farm enterprise that will be shut down because insurance is not available.
We need to tackle this collectively but the Government needs to stand up to the insurance industry. The Acting Chairman knows from attending all of the hearings of the Committee on Finance, Public Expenditure and Reform, and Taoiseach that it all comes down to a lack of transparency and data. From the outset we identified there are black holes in the insurance industry. The industry knows that without having the raw data we need, we will not be able to tackle this in a meaningful way. It has the headline that it wants us to look here, there and everywhere except within the rottenness of the insurance industry that is making millions on the backs of people who cannot afford it. I welcome the Bill but we have a huge amount of work to do on the insurance industry and it needs to start with truth and transparency.
I commend Senator Lawlor on the Bill, which I am glad to co-sponsor along with my colleagues. I welcome the Minister, Deputy Flanagan, to the House.
I am a member of the finance committee and we have done a considerable amount of work on insurance. Insurance companies, representative bodies, brokers and people affected by high insurance have come before the committee and several features have come across. Senator Conway-Walsh mentioned the lack of transparency. We have a lack of raw data. A database is being compiled, which I hope will shed light on it.
In the past week, I met a man whose business is to recover cars. He is on call with the insurance companies. His insurance increased threefold in the past three years. This is not sustainable. Insurance now makes up a very large proportion of overheads. The insurance companies speak about insurance costs reducing, but this is after they increased considerably over the previous two years. There is a small bit of spinning going on with regard to insurance costs.
In many cases, people are only able to get insurance from one company or two at a maximum. There might be a broad spectrum of insurance companies, but when people look for cover, they can find only one or two companies. Why is this the case? Surely there should be competition in the market. I know businesses are looking to reduce risk. These are just features as it is about the lack of transparency in the area. Historically, companies came into the Irish market and undercut each other and their rates were unsustainable. They have a business model and they are there to make money. The fact they got their costings wrong is their issue and not the customers' issue.
The Bill speaks about the Minister putting in place a maximum level of general damages. Would the Minister be able to set a maximum level of damages for specific injuries while allowing judges the discretion to award a higher rate if they can justify the reason for it? This might bring about a sense of fairness and, dare I say it, a little more transparency. At least we would be working off a maximum rate and a judge would have to comply or explain. This might inform the book of quantum in a range of areas.
Section 7 states the Minister shall commence a review within three years of the commencement of the Bill and at five yearly intervals thereafter. This should be every three years. Five years is a long time. The Bill refers to including representatives of the Judiciary with regard to the review. I assume this means the legal profession, including solicitors. I apologise. They are mentioned separately.
The insurance business tells us rates are increasing because of legal fees and the legal profession while the legal profession tells us it has nothing to do with it. If I am being honest, I am still none the wiser and I have no doubt many of my colleagues feel the same way. This shows the degree of the lack of transparency. There are serious vested interests involved. Insurance is an area where a lot of money can be made over a relatively concentrated period of time. It is making it prohibitive for many small businesses to stay in business and for young drivers and, in many cases, older drivers to stay on the road.
I commend the Bill. Senator Lawlor will take my comments in the spirit they were made. He has started a discussion on an area in which we need to find a tangible specific toolbox to get to a point where we not only reduce awards but have a reduction in insurance premiums for customers throughout the country.
I thank Senator Lawlor for introducing the Bill. As he set out, this is a short Bill of eight sections intended to provide for the imposition of a cap on the level of awards that may be made in respect of a claim for general damages arising from personal injury. This is to be done by ministerial regulations to be approved by a resolution of each House and subject to review under the aegis of the Personal Injuries Commission. There is also to be a periodic stakeholders' review of the operation of the Bill when enacted.
The Government has decided not to oppose the Bill on the clear understanding that substantial amendments to the Bill may, subject to the advice of the Attorney General, be required and proposed by the Government on Committee Stage.
At the same time, the Government has noted that the Bill addresses a specific matter under ongoing consideration by the cost of insurance working group. Also, as has been mentioned by Senators, the Law Reform Commission is now, at the request of the working group, carrying out a detailed analysis of the possibility of developing constitutionally sound legislation to delimit or cap damages in personal injuries awards. We now have an ideal opportunity, therefore, to debate this matter with the benefit of expert analysis of the issues concerned to determine what our optimal legislative and policy responses should be.As reflected in the establishment of the cost of insurance working group, the Government recognises that we have very real challenges with both premium inflation and awards inflation in the insurance sector in this jurisdiction with the ensuing claims inflation coming between them. At the same time we have a highly profitable insurance sector, with the annual profits of our top ten insurance companies running between €6.1 million and €201 million at the end of 2017 and with the total assets of insurance corporations reported by the Central Bank to be €305 billion at the end of last year.
The Personal Injuries Commission has found that soft tissue injury claim costs in this jurisdiction are approximately 4.4 times greater than the comparator costs in the UK, taking account of the relevant capping level that applies. Based on claims paid between 2015 and 2017, the average soft tissue claims cost in Ireland is €17,338 when considered within a €50,000 claim threshold. I assure the House, therefore, that the adverse impact of such prohibitive costs on small business and play centres and on a range of leisure and other activities at local community level is key to the Government's ongoing consideration of reform in this area.
As Members will recognise, this is also an area of the law replete with complex constitutional and legal issues, including the rights of bona fide litigants. Not surprisingly, therefore, the capping-of-damages issue covered by today's Bill is among those being considered by the cost of insurance working group established by the Minister for Finance in July 2016 and chaired by the Minister of State, Deputy D'Arcy. The objective of the working group is to identify and examine the drivers of the cost of insurance and recommend short-term, medium-term and long-term measures to address the issue of increasing insurance costs, taking account of the requirement for the need to ensure a financially stable insurance sector. The group published its Report on the Cost of Motor Insurance in January 2017 and its Report on the Cost of Employer and Public Liability Insurance in January 2018.
Moreover, in response to recommendation 5 of the working group's January 2018 report, the Law Reform Commission is now conducting a detailed analysis of the possibility of developing constitutionally sound legislation to delimit or cap the amounts of damages which a court may award in respect of some or all categories of personal injuries. This now forms part of the commission's fifth programme of law reform, approved by the Government on 20 March 2019. It is my understanding that the Law Reform Commission is giving this project immediate attention with the aim of publishing an issues paper before the end of this year.
It should also be noted that in its final report, of July 2018, the Personal Injuries Commission, chaired by the former President of the High Court, Mr. Nicholas Kearns, noted this development and expressed the belief that the commission is the appropriate body best equipped and resourced to undertake this study. While it is proposed that the commission has a review function under today's Bill, it is important to note that it was not a State body and no longer functions, having completed its work. As such, it would have to be reconstituted and resourced to function effectively as today's Bill would propose.
The decision by the cost of insurance working group to refer the capping-of-awards issue to the Law Reform Commission was not taken lightly. Indeed, as reflected in the group's published reports, this was an issue raised by several stakeholders who contributed to its work, including by reference to the comparative level of awards being considerably higher in this country than in the UK, to which I referred. The working group recognised that a fundamental consideration in any analysis of this issue is whether a legislative cap on damages, or a similar measure, is necessary for the common good. For instance, an argument can be made that broader economic and societal needs may be impacted on by lack of access to insurance as a result of the cost. A further consideration was the danger of incentivising the small minority of people who may choose to take fraudulent advantage of the high level of awards, and to negate the perception that insurance fraud is a victimless crime with no consequences. At the same time, these aspects have to be balanced by the rights of genuine plaintiffs to an appropriate level of compensation. In short, the working group recognised that the State must be cognisant of the constitutional rights of all parties and must balance those rights to ensure any encroachment on them is justified, proportionate and in the common good.
To make progress on this issue, representatives of the Department of Justice and Equality, the Department of Business, Enterprise and Innovation, and the Department of Finance, who were members of the working group's legal sub-group, engaged with the Office of the Attorney General. Arising from this engagement, the three Departments discussed the issue further with the main working group and concluded that introducing such a measure would constitute a significant development in the law, because any legislation that restricts the rights of citizens must be carefully considered and justified to ensure it would withstand constitutional challenge; that the main question for a court, if such a measure were challenged, would be whether an appropriate balance was struck having regard to the exigencies of the common good; and that the appropriate balance can only be struck once all appropriate factors have been taken into account by the Houses of the Oireachtas in considering the legislation.
Therefore, taking account of these matters, the working group concluded it was not in a position to undertake the in-depth analysis required to demonstrate to the satisfaction of a court that the correct balance of constitutional rights and principles could be struck to the common good. Consequently, the working group saw the necessity of further expert research and that the Law Reform Commission might be the appropriate body to carry it out. I confirm that these fundamental legal and constitutional concerns clearly arose in the Government's consideration of today's Bill in conjunction with the Office of the Attorney General. It will also be recalled that, for its part, the Personal Injuries Commission recommended that the future judicial council be assigned the function under its statute of compiling guidelines for appropriate general damages for various types of personal injury and that, pending the introduction of such legislation, the Judiciary participate with representatives of the Personal Injuries Assessment Board and my Department in the formulation of guidelines as to quantum in the case of claims for damages for soft tissue–whiplash injuries.
These are matters on which I am in ongoing consultation with the Chief Justice, while also working in co-operation with the Houses of the Oireachtas with a view to commencing Seanad Committee Stage of the Judicial Council Bill before Easter. I hope the Business Committee might see fit to facilitate such a debate next week.
I seek the support of colleagues in that regard.
The Government is taking a range of policy and legislative actions across Departments and agencies, including the Personal Injuries Assessment Board and the State Claims Agency, as part of its strategic response to insurance costs. Most important, from the perspective of Senator Lawlor's Bill, this includes the analysis of the capping of awards from a constitutional perspective, which is being supported by the expertise of the Law Reform Commission. This will inform any further steps, including in terms of what is possible, and, above all, legally robust, legislative or other measures may be taken. Hence, the Government's position not to oppose this Bill on Second Stage in the understanding that substantial amendments to it may, subject to the advice and guidance of the Attorney General, be required and proposed by the Government on Committee Stage.
I thank all the speakers who took part in this debate. It was very healthy. With regard to those who state my reasons for introducing this Bill are populist, insurance costs affect everyone, from young people trying to get insured for the first time to those who have been in business for many years. I tried to identify the areas in which we could have an impact regarding insurance costs. I have identified five and have mentioned them all. Included are levies, awards, fraudulent claims, and the profits of insurance companies. These have been highlighted today. I raised the issue of awards. It has been proven that awards in this State are way out of sync with those of our near neighbours. That makes our business uncompetitive. When this occurs, there is a risk of job losses. Senators have identified today businesses that are struggling owing to insurance costs. My objective was to examine an area of the insurance sector as a whole that we could address through legislation.I hear what the Minister said with regard to constitutionality and the changes that may have to be made. I will certainly have discussions with him and the Attorney General regarding what changes can be made to the Bill.
I wish to refer to the points made by certain Senators. The Bill is not targeted at the Judiciary. Rather, it is an approach whereby we can look at the overall way in which we can reduce the insurance costs for people across the board. Some Members may think it is specifically targeted at the Judiciary but that is not the case. Ministers have highlighted other areas in need of reform, such as the profitability of insurance companies and ensuring that any excess profits are passed on in the form of premium reductions for their customers.
The book of quantum deals with historical awards made by the courts. This issue does not stem from a problem with the book of quantum. The problem is that the courts are making awards which are too high and the book of quantum must reflect that because if it did not, people would not use PIAB but, rather, go straight to the courts. The objective of PIAB was to reduce the amount of time being spent by the courts on making awards.
Senator Marie-Louise O'Donnell raised a couple of issues to which I wish to refer. I stated that the objective of the Bill is to look at an area regarding the costs of insurance premiums. I identified five areas of interest and the Bill focuses on one of them. I referred to the others in my opening address.
It is Government policy to try to reduce the cost of insurance. It is addressing that through the working group on the cost of insurance and bringing forward the recommendations of the Personal Injuries Commission. I look forward to engaging on those recommendations.
This Bill aims to support judges such that there can be consistency in awards. It is not about trying to remove the high end awards that are currently made; it aims to ensure that judges can make appropriate awards for the various injuries that come before the courts.
On the Judicial Council Bill, it is coming forward but it has been stalled for a number of years. This Bill may have a role in trying to speed up its passage.
On the issue of why judges may not assess a maximum level for damages under the Bill, in 1984 the Supreme Court introduced a cap of IR£150,000 on general damages in Sinnott v. Quinnsworth, thereby limiting judges' discretion in that regard.
I have no doubt that we will have further discussions on the various changes required to the Bill before it moves to Committee Stage. Its overall thrust is an attempt to reduce the cost of insurance for the ordinary person. I identified an area within that which needs to be changed. I am delighted that there is widespread support for the Bill in the House.