Holly Cairns (Cork South West, Social Democrats)
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135. To ask the Minister for Finance the steps he is taking to address the insurance claim culture in society which is putting small businesses under extreme financial pressure. [11547/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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At the outset, I wish to acknowledge the general problems faced by many consumers, businesses, and community and voluntary groups, in relation to the cost and availability of insurance.  I believe that the vast majority of personal injury claims are genuine, and that when an individual suffers an injury as a result of another party’s negligence, then that claimant deserves to be appropriately compensated.  However, I also believe it is important to remove incentives for any individual to submit a fraudulent or exaggerated claim, and the key element in this regard is to bring the levels of damages awarded in this country more in line with those awarded in other jurisdictions. 

As you may be aware, the Cost of Insurance Working Group was established in 2016 and has produced two detailed reports with recommendations on insurance reform, much of which have been implemented.  One of its key recommendations was that there be an examination of award levels in this country compared with elsewhere.  In this respect, research was conducted by the Personal Injuries Commission (PIC), which showed that award levels for soft tissue injuries in Ireland were 4.4 times higher than in England and Wales.  This disparity in award levels is unsustainable and this gap needs to be reduced considerably.

In order to try to address this award differential, the Judicial Council Act 2019, provides for the establishment of a Personal Injuries Guidelines Committee (PIGC), which is tasked with introducing new guidelines to replace the Book of Quantum.  I can inform the Deputy that the PIGC was established on 28 April and is due to submit its first draft Personal Injuries Guidelines to the Judicial Council within six months, as per the requirements of the legislation.  While the Government cannot interfere in their deliberations due to the constitutional separation of powers, I would hope that the Guidelines will take into account the PIC’s research and can also come into operation as soon as possible following their submission to the Judicial Council.  In return for lower and more consistent award levels, insurers should significantly reduce their premium levels and broaden their risk horizons.  An increase in the use of the Personal Injuries Assessment Board as the preferred way to settle claims would also be desirable and thus assist in reducing the high costs currently associated with litigation.

I would also like to highlight other reforms that have been implemented already by the CIWG to address the issue of insurance fraud. In this regard, a key change was a number of amendments to the Civil Liability and Courts Act 2004 to make it easier for businesses and insurers to challenge cases where fraud or exaggeration is suspected.  In addition, one of the key achievements of the CIWG is increased coordination and cooperation between An Garda Síochána and the insurance industry with regard to tackling fraud.  There has also been recent successes under Operation Coatee, which targets insurance-related criminality.  In addition, the Garda Commissioner has decided for operational reasons to have insurance fraud cases investigated at divisional level, as a general rule. It is felt that this will enable a more local focus to be brought to such cases.  This approach is aligned with a general divisional-focused Garda model and the Garda National Economic Crime Bureau (GNECB) will guide divisions and provide training in the investigation of insurance fraud.

In summary, the key outstanding challenge to satisfactorily resolve the cost and availability of insurance issues facing businesses is a recalibration of award levels downwards.  If this is done and more moderate awards are applied consistently this should have a very positive impact on the cost of doing business.