Linda Nelson Murray (Fine Gael)
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I thank the Minister of State for coming in. I am here to ask about the SME test being applied to the legislation on the personal injury guidelines, as there is a recommendation that they be increased. The SME test was introduced by the Government as a part of measures in May 2024. This is a no-brainer because any major new measure from the Government will be assessed for its impact on small business through an enhanced SME test. In all cases, a completed SME test must be included or an explanation provided as to why it is considered an SME test is not required.

The SME test is all about "think small first" and considers how measures will impact businesses. Some enterprises can be disproportionately impacted by regulatory or administrative burdens if not given due consideration during the formation of policy. Ireland's SME test is a four-step process for policymakers to consider: consultation, identification, impact and mitigation. If ever this test were needed, it is now, when the personal injury guidelines look likely to come before us for an increase of 16.7%. On 5 March 2024, the personal injuries guidelines committee of the Judicial Council submitted the outcome of its review of the personal injury guidelines to the board of the Judicial Council, pursuant to section 18(2)(b) of the Judicial Council Act 2019. This means businesses, community groups, sports clubs, motorists and charities will all pay the price as this increase will be passed on to policyholders.

I have brought this issue up many times here in the Upper House. My colleagues and I brought a motion to this House only two weeks ago on insurance whereby all of us stated the increase in the personal injury guidelines was excessive. We cannot allow this to go ahead without performing the SME test. We have brought in the SME test for businesses to allow us to consider impacts on them when policy and legislation is before us. When the personal injury guidelines go ahead, all our premiums will increase and, in particular, those of business, the backbone of our economy, so we keep getting told. The recommendations from the Judicial Council state:

The Committee has not found it possible to carry out any meaningful analysis of the quantum of court awards given under the Guidelines to date that might inform this review. This is because the inevitable delay between the commencement of proceedings to which the then new Guidelines applied and their trial has meant that there are very few decisions and certainly not enough to be statistically significant.

How can we apply these guidelines when we have not even properly analysed the data? The committee just recommended an increase of 16.7% instead. The Judicial Council Act 2019 made clear that rigorous analysis should take place, including consulting with the Personal Injuries Assessment Board. No such consultation took place despite the thousands of cases the board has processed since the guidelines were introduced in 2021.

Without the increase, a minor back injury in Ireland sees people get between €12,000 and €20,000. In England, it is a maximum of £8,300. A minor shoulder soft tissue injury in Ireland has a maximum of up to €12,000, while in England it is £5,200. A minor ankle sprain injury in Ireland has a maximum of €12,000, but it is £6,300 in England. In Ireland, a minor foot fracture has a maximum amount of €20,000, while it is £12,700 in England. These are the numbers before we apply the 16.7% increase. I call on the Minister for enterprise to enact the SME test on the personal injury guidelines before any decision is made to implement them.

Neale Richmond (Dublin Rathdown, Fine Gael)
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I thank the Senator sincerely for raising this timely and pertinent matter. Before I deliver the reply on behalf of the Minister, Deputy Burke, it would be remiss of me not to acknowledge the Senator's long-standing personal, professional and political commitment in this area. It is an area to which she brings a great level of familiarity, and one that I would imagine is the rival of any Member of either House of this Oireachtas. It is something I have seen first-hand in my previous roles in the Department of Finance, where I looked after insurance, and in the Department of Enterprise, Trade and Employment, as it was, where I looked after SMEs and small business.

Turning to the specific matter, for the interest of the House and in direct reply to the Senator I will lay out a little about the personal injuries guidelines in the Act and the role of the Judicial Council, what the process is and where the SME test may be applicable. There is no point in me repeating to the Senator the efforts the Government has made in relation to insurance or the importance given to it in the programme for Government. For clarity, the introduction of the personal injuries guidelines came in April 2021 and was a key outcome of the action plan on insurance reform of 2020. It has brought about much reform in the claims settlement framework in Ireland.The NCID has consistently provided evidence to demonstrate the positive impact the personal injury guidelines have had on lowering costs across all settlement channels. The Injuries Resolution Board alone has seen the volume and value of personal injuries awards reduced by 25% and 39%, respectively, over the period from 2019 to 2024, which included the introduction of the personal injury guidelines. Furthermore, the volume of claims in this period dropped by 33%.

However, the Judicial Council, which is entirely independent in its function, reviewed the personal injury guidelines as set out in the Judicial Council Act 2019 and now proposes to increase the personal injuries guidelines by 16.7%. In accordance with section 7(2)(B) of the Judicial Council Act 2019, the next step is for the Minister for justice to lay a draft of the amendments to the personal injuries guidelines before each House of the Oireachtas. That is a process by which we can either accept or reject the recommendations. We have no ability to differentiate or to set a different level. That is a matter for an independent body.

The application of the SME test is a little more complicated than perhaps I would like it to be. It has been used over 20 times in legislation since it was introduced last year under the Minister, Deputy Burke, but the test is a matter for all Departments to consider in respect of policy and legislation under their remits. It is not simply a matter for the Department of Enterprise, Tourism and Employment. It would also have to take in the Departments of Finance and justice as well feedback from all other affected Departments, which, on something such as this, is all of them. As I said, whether to accept the personal injury guidelines is a matter for the Oireachtas.

Speaking personally, although I am probably breaking the rules here, I would be very concerned about the introduction of the test. I have heard the very real concerns laid out by people who do not usually agree with each other on this area. We heard it this morning on the radio and have seen it over recent days and weeks. It needs very serious reflection by all parts of government and the Oireachtas. I have no objection in principle to the application of the SME test but I am not sure that is the exact tool that is necessary in this regard due to the nature of the system by which these recommendations are brought to the Houses.

Linda Nelson Murray (Fine Gael)
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I thank the Minister of State. I really appreciate it and the acknowledgement of my work and his own on everything to do with insurance. It is the reason I got into politics seven years ago when I nearly lost my business over it all. That is why I am passionate about it. It can be hard when you know something is wrong and you feel it is going to happen. I just know it will be wrong if these rates increase because it will have a catastrophic impact. One lady told me yesterday that if her insurance goes up by anything, she will have to close her business. The cost will be passed on.

We need to give it more thought. We should not rush into it. I hope there will be time to reflect on it and debate it more. Maybe the SME test is not the thing for it. We will see the decision about that. I am just looking out for everyone’s business, as well as sports clubs, festivals and everything else. I am glad to hear the Minister of State say he is concerned about it too. I really appreciate that. Many others have spoken about it here, so I thank them.

Neale Richmond (Dublin Rathdown, Fine Gael)
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I will ensure the relevant Departments look to see if the SME test should be applied. I am not ruling that out. I just wanted to be frank and direct to make sure I was not misleading the Chamber about what can be achieved by the SME test on this compared with other areas of policy or legislation where it may be applied. However, the case the Senator has laid out, not only here this morning but over the last number of years along with colleagues, is very coherent and needs to be borne in mind. I appreciate the role of the Judicial Council. I acknowledge and respect its independence and it is important that it is independent, but we have a decision as legislators to make and we have to make that mindful of all the impacts it may have.