12 hours ago
Oireachtas should slam down gavel on judges' planned 16.7% injury awards hike
The introduction in April 2021 of judicial guidelines on
personal injury awards
had an immediate and sharp effect – with the median value of compensation awarded by the
Injuries Resolution Board (IRB)
falling 46 per cent to €10,000 in the eight months that followed.
The guidelines were also aimed at creating more consistency in awards, regardless of whether they were resolved directly with an insurer, the IRB, or through the courts. The problem is, there is no comprehensive data available from the courts on awards – not helped by a dearth of written judgments at District and Circuit Court levels – for anyone to make such an assessment.
Either way, an all-too-high number of claimants – encouraged, no doubt, by their lawyers – continue to think they can fare better going down the legal route than settling through the IRB. Figures published by the board last month show that while the motor crash claimants consenting to being assessed by the IRB in the first instance rose from 62 per cent to 78 per cent between 2020 and last year, the acceptance rate of awards from the board fell marginally, to 47 per cent.
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Judges expected to support draft guidelines for 16.7% rise in personal injuries awards
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The board of the judicial council, required by law to review the guidelines every three years, proposed in December that payouts increase by 16.7 per cent. This was adopted by the council of the State's judges in late January and passed over to the Minister for Justice Jim O'Callaghan, who must put the amendments before Houses of the Oireachtas for approval.
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There is an expectation that the minister will bring the proposal before the Oireachtas before the summer recess.
The planned blanket hike has been met with resistance from insurers and business lobby groups, who know that the increase will be passed directly on to consumers and companies. Motorists, who had seen insurance premiums fall by 25 per cent between 2017 and 2022, have already stomached rate increases in more recent years as car parts and labour inflation have driven up damage costs.
The guidelines review was a crude exercise, with the committee of judges that carried it out applying the general Irish inflation rate to existing awards guidelines. The judicial council even said at the time that the committee 'did not find it possible to carry out any meaningful analysis of the quantum of court awards given under the guidelines that might inform this review'.
Nor does there appear to have been any regard given to what's going on elsewhere.
The going rate under the existing guidelines for minor neck injuries, where recovery is made within six months, is up to €3,000, 5½ times higher than that in the UK – where awards are among the highest in Europe.
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Is going to court worth it for personal injuries claimants? A lawyer and insurer go head to head on the issue
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'The large disparity is before the 16.7 per cent increase proposed by the judicial council, which, if introduced, will make the gap even larger,' Aviva Insurance Ireland said in submission last month to the Department of Finance, which is weighing further insurance reforms. 'Comparing Aviva's claims in the UK and Ireland, attritional claims like whiplash represent 30 per cent of the cost of motor insurance premium in Ireland compared to 10 per cent of premium in the UK in 2024 and lower still in Europe.'
TDs and senators should reject the planned amendments and push it back to the judiciary to go back to the drawing board.
Their key role was inadvertently copper-fastened by a Waterford woman, Bridget Delaney, who mounted a challenge three years ago against the constitutionality of the guidelines.
The Supreme Court ruled in April last year that it had been, indeed, unconstitutional to give the judicial council the power to set personal injury guidelines. However, the fact that the initial guidelines were subsequently independently approved by legislators gave them legal effect.
The unsophisticated way that the judiciary has gone about reviewing the guidelines suggests they need some help.
The IRB argued in its submission to the Department of Finance consultation said that judicial council be required to liaise with it on any future amendments.
'The board's expertise, practical experience, and annual assessment of nearly 10,000 cases annually would meaningfully contribute to the continued relevance, fairness, and effectiveness of the guidelines,' it said.
Various submissions called for future guidelines to be benchmarked against European countries.
'Legal expenses and award levels for lower-value claims remain disproportionately high and are not aligned with those observed in the UK and other European jurisdictions,' said German insurance giant Allianz's Irish unit.
A number, including the Alliance for Insurance Reform, a lobby group for business and civic organisations, and the IRB said the current requirement that the guidelines be reviewed very three years does not allow them to be embedded.
'Under the current guidelines model, there could be several versions of the guidelines in use dependent on whether a claim has already been assessed or if legal proceedings have been initiated,' said the IRB, which reckons it should be extended to every five years. 'A situation cannot exist whereby the same injury, the same claim, that has been rejected within the Injuries Resolution Board goes into the court system and a different set of guidelines is used to value compensation.'
While the setting up of the IRB back in 2004 (then known as the Personal Injuries Assessment Board) was meant to do away with the need for solicitors, 95 per cent of claimants that end up before it are represented by lawyers. The board suggests legal fees now need to be brought into cases its handles.
'The board is aware that in some cases the issue of legal fees becomes an impediment to the acceptance of an IRB award,' it said.
There's disquiet in Government, too, about the judges' review process. Minister for Finance Paschal Donohoe is known to have expressed concern to the Minister for Justice about the knock-on effect of such a large hike to businesses and households.
Colm Brophy, Minister of State at the Department of Justice, told the Seanad last month that his boss is looking at what legislative 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', he said.
This will not go down well with the judiciary. But it has only itself to blame.
