Linda Nelson Murray (Fine Gael)
Link to this: Individually | In context

I thank the Minister of State for coming to the House. I hope that he and the Minister, Jim O'Callaghan, hear what I have to say.

Yesterday, the Central Bank showed that motor insurance premiums increased by 9% in the first half of last year. No doubt in the next six months we will learn they have risen again. In December 2024, the Personal Injuries Guidelines Committee recommended that awards in personal injury cases be increased across the board by 16.7%.

The introduction of the personal injury guidelines three years ago was one of the most impactful reforms made to insurance in decades and was a significant part of the previous Government's commitment to reducing premiums for us all, be it for a car, business, employer liability or sports club. The reason we did it is that we were total outliers compared to other countries. Our awards were sometimes 100% higher. Compared to our neighbours in England, our awards were 440% higher on average. There is no doubt that we needed the guidelines. This meant insurance companies paid out more, and people were more likely to claim for small injuries prior to the change.

We implemented the guidelines, which reduced awards. We saw a 40% reduction in claims volumes for personal injuries sustained by visitors to businesses and in public spaces between 2019 and 2023. Claims in cafés, hotels and restaurants have more than halved. Shops and stores have seen a 44% decrease and sporting and athletics areas have seen a 38% reduction in claims. In childcare settings, a sector that has historically reported high insurance costs, only 256 personal injury claims were identified over five years. Compare this to the nearly 170,000 children enrolled in the years 2020 and 2021. The Minister of State should not get me wrong: our awards are still higher than those in many other countries but, as can be seen, it was a pivotal moment and was instrumental in reducing premiums.

If we fast-forward to now, only three years after the introduction of the guidelines, the guidelines committee has made the recommendation that the awards go up by 16.7%. The suggested increases by the committee cannot be allowed to happen. We do not want to see insurance for cars, cafés, community groups, charities, football clubs and golf clubs rise. I guarantee that if we allow the personal injury guidelines to go up, that is exactly what will happen.

Such increases would also impede the work of the Injuries Resolution Board. The previous Government did all it could to get claims processed through it. Legal costs are already a substantial problem and will only increase if this proposal is adopted. Right now, businesses are faced with a myriad of increased costs and we simply cannot add more fuel to the fire by doing something that will drive premiums up.

I previously mentioned that I am one of the people impacted. My husband and I run a leisure business where so many kids leave with smiles on their faces. The guidelines will ensure that any type of activity where people have fun - playing sport, enjoying a festival or going to a restaurant - will find it even more difficult to get insurance. Does the Minister of State know that the only reason play centres in Ireland have insurance is because we have a group insurance scheme? In other words, such is still the difficulty of getting insurance that the play centres we all know in our constituencies would more than likely not be there if it was not for group insurance schemes.

In recent years, we witnessed an excellent programme of insurance reform delivered by the previous Government, but before we can even reap the great results of it, we are already planning to increase the awards. The Oireachtas is required to consider and approve the proposals of the Judicial Council. The proposals are on the desk of the Minister of State's colleague, the Minister, Jim O'Callaghan. I respectfully appreciate that he has a very difficult job to do in this regard but I recommend that, as a matter of urgency, the issue be assigned to the relevant Oireachtas committee so that it can be thoughtfully considered in an open forum and with proper public debate on the appropriate path forward.

If we continually review upwards personal injury awards every three years, not only will awards increase but legal fees will, too. In our programme for Government, the Government committed to further action to drive down insurance costs that impact households, motorists and businesses. This is our first test. I urge the Minister not to let his local running club, café, crèche, play centre or festival suffer and to pause the increase in personal injury awards.

Colm Brophy (Dublin South West, Fine Gael)
Link to this: Individually | In context

I convey the apologies of my colleague, the Minister, Jim O'Callaghan, who regrets that he cannot be here because he unfortunately has another commitment at this time. He has asked me to reply to Senator Nelson Murray and to thank her for raising this important issue, which I know is very important to her.The Senator has been one of the strongest advocates on this matter. I appreciate her giving me the opportunity to provide some clarity on some of the areas of the personal injury guidelines that have been drawn up for implementation. I know the Senator is very familiar with all of this but I will just say at the outset that it is not a matter for the Minister for Justice to approve the adoption of the guidelines. The Minister shares the concerns the Senator has raised regarding inflation and has been consulting with his ministerial colleagues and the Attorney General on the issues in terms of reviewing the situation.

As the Senator mentioned, under the Judicial Council Act 2019, the Judicial Council, which is independent in its functions, has the responsibility for drawing up and reviewing the personal injuries guidelines. The first iteration of the personal injuries guidelines came about in April 2021 and have had a clear and significant cost-saving impact since their introduction. Claim volumes dropped, the average award value decreased by 20%, and legal costs for those settling through the Injuries Resolution Board comprised 4% of the total settled cost compared to 43% through litigation. In addition, the time take to resolve matters is much shorter under the IRB process.

That being said, the guidelines were challenged in the Delaney v.PIAB case. While the Supreme Court upheld the guidelines, it identified deficiencies in the underpinning legislation. This was amended by the Oireachtas in the Courts, Civil Law, Criminal Law and Superannuation (Miscellaneous Provisions) Act 2024.

In accordance with the 2019 Act, as amended, the Judicial Council has conducted a review of the guidelines and submitted draft amendments to the Minister for Justice to enable the laying of the draft amendments before the Oireachtas. The draft guidelines submitted to the Minister by the council propose an across-the-board increase of 16.7% in compensation amounts, as the Senator mentioned. This figure aligns to the increase in the harmonised index of consumer prices, HICP, over the period from which the guidelines were last agreed in 2021. Section 7(2)(b) of the 2019 Act requires that the Minister for Justice lay those revised guidelines before each House of the Oireachtas as soon as is practicable. The legislation provides that the draft guidelines must be approved by a resolution of both Houses of the Oireachtas before they can be brought into operation. The Oireachtas will have the opportunity to debate the matter once the resolutions on the adoption of the guidelines are tabled. The Minister wants to stress, however, that the legislation passed by the Houses last year does not provide for amendment of the guidelines by the Oireachtas. Assuming the resolutions have been approved by the House, the Judicial Council will then meet formally to adopt the guidelines. This is in keeping with the amendments to the 2019 Act as adopted last year.

I should add that the Minister, Jim O'Callaghan, is reviewing the relevant provisions of the Judicial Council Act 2019 to see what amendments can be made to make further reviews of the personal injuries guidelines more inclusive and transparent. This may include making changes to the mechanism and the timing of future reviews of the guidelines, and the possibility of increasing the monetary jurisdictions of the District and Circuit Courts.

Linda Nelson Murray (Fine Gael)
Link to this: Individually | In context

I thank the Minister of State. Some 96% of cases do not even get to court, so we are talking about 4% of all cases. It has been suggested in some quarters that the 2019 legislation provided for the Judicial Council to review the guidelines, that it has now done this and we must accept its recommendation. Why? As the Minister of State mentioned, the Supreme Court made clear in the Delaney case that any changes to awards had to have the ultimate approval of the Oireachtas. For this approval to be meaningful, it has to be freely given. It is hard to see how the separation of powers concerns are addressed if Oireachtas consent is merely a rubber-stamping exercise and not meaningful consideration and assent by this Legislature. I submit that we need clarity from the Minister on this issue before going any further.

What we need most of all is for the recommendations of the Judicial Council regarding the proposed increase in awards to be sent to the relevant Oireachtas committee for considered debate. Policyholders deserve nothing less from us in this matter and we really need to consider them.

Colm Brophy (Dublin South West, Fine Gael)
Link to this: Individually | In context

I will convey, as I know she will directly convey, the Senator's views and what she has said to the Minister. I listened closely to the points she raised. I am aware of the view expressed by some stakeholders that the proposed increase will have the effect of increasing premiums. I fully take on board the issues and considerations the Senator has raised. They are very important. However, the Minister believes that, given the complex nature of the assessment of insurance premiums, it is too early to say if increases in awards for personal injuries will have the effect of directly increasing premiums. Members of the House will have the opportunity to discuss these matters in fuller detail when resolutions are presented to the Oireachtas.

I thank the Senator again for raising this really important issue.