Soft tissue damage awards four times greater in Republic than UK

The recommendations contained in the Government's Personal Injuries Commission second and final report will provide greater consistency in award levels, Minister for Insurance Michael D'Arcy has said.

He was speaking after the commission’s report revealed the average compensation award for whiplash injuries is approximately 4.4 times higher than in Britain.

Commenting on the study, Mr D’Arcy said the recommendations would “bring stability to the claims environment and in turn positively influence the price of insurance paid by consumers and businesses”.

Insurance Ireland chief executive Kevin Thompson said the report showed personal injury compensation awards in the Republic are "dramatically out of kilter" with those in the UK and getting more expensive.

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“Eight out of 10 motor injury claims in Ireland are for soft tissue and our compensation awards continue to spiral whereas legislation is being brought in to cap them in the UK,” said Mr Thompson, calling for urgent reform.

The Alliance for Insurance Reform also demanded immediate action from the Government, including an overhaul of the award levels in the Book of Quantum, which provides a guide on awards for particular injuries.

Responsible

“It is now up to Government to implement a specific action plan with clear timelines, to which the people responsible are held to account. Kicking the can down the road is no longer an option. We cannot afford to let this happen with this important report published today,” said the alliance’s director Eoin McCambridge.

The Law Society of Ireland stressed the need to preserve appropriate compensation for accident victims and expressed concern that reducing damages may solely benefit the insurance industry. Its director general Ken Murphy said there was no evidence that reducing the level of compensation would result in premiums going down.

“We must avoid a situation where injury victims end up in a poorer position while insurance companies keep getting richer,” he said.

“Simply reducing damages takes money away from those who suffer injuries through no fault of their own and puts it in the pockets of the already very profitable insurance companies. It is critical that the judiciary maintains a balance between the rights of injury victims and appropriate compensation levels.”

Mr Murphy also advised that the higher level of awards locally could serve as an indication that Irish society placed a higher monetary value on the health and wellbeing of its citizens.

Ibec also welcomed publication of the commission’s report, and in particular its key recommendation to make the proposed judicial council responsible for guidance on award levels.

Reforms

The Car Rental Council of Ireland called on the Government to tackle what it described as a “broken award process”.

“We believe this report has the potential to drive much-needed reforms to downwardly revise average awards – a vital step in disincentivising compensation abuse. However, we are urging on the Government to act now to ensure real changes are felt across the entire industry and most importantly, felt by Irish motorists,” said the council’s chief executive Paul Redmond.

Welcoming the commission’s report, Fiona Muldoon, CEO of FBD, said: “Quite simply, Ireland has a choice to make between high pay-outs and low insurance premiums, it is not possible for us to have both. FBD, on behalf of our small business, farm and motoring customers, calls for urgent follow through on the report’s recommendations in order to lower injury awards and associated costs for the benefit of all our insurance customers.”