The Small Firms' Association yesterday criticised the "compensation culture" in Irish society, saying it cost small business £600 million (€762.38 million) a year. Addressing an SFA conference "Compo Culture - Don't Get Ripped Off", the group's chairman, Mr Kieran Crowley, said the current system of compensation for personal injury was an anachronism and called for a radical overhaul of the system and a reduction in the costs being borne by small business.
"It is time for the legal profession and the judiciary to be accountable for their actions to the people who end up footing the bill, namely the taxpayer and business," he said.
But Mr Ken Murphy, director general of the Law Society, has rejected the SFA's claims.
"I'm sick and tired of solicitors being made scapegoats for the failure of others to discharge their duties," he said. "If there were no accidents there would be no claims. There are an unacceptable level of accidents in this country and there is not so much a compensation culture as a negligence culture."
Around £600 million was being lost annually in meeting the cost of personal injuries claims, the SFA said. "In addition to this, the hidden costs are estimated to be between two and three times the visible costs, such as the cost of lost production, administrative costs associated with accident investigation, replacement staff costs and sick pay schemes," said Mr Crowley. Despite having the lowest injury rate in Europe, Ireland had twice the claim rate of Britain and settlements are far higher, he claimed. "This means that for every £100 a small business in Ireland pays in public liability premiums, a British counterpart will pay £34 and a Dutch counterpart £14," said Mr Crowley.
The average award was just over £5,000 in Britain but over £13,000 in Ireland, the SFA said, adding that, within Ireland, employers' and public liability insurance exceeded 2 per cent of payroll costs on average.
"In particular sectors such as wood finishing, steel erection, scaffolding and leisure industries liability insurance is as high as 20 per cent of payroll costs," said Mr Crowley.
Mr Murphy said the Health and Safety Authority figures showed the number of workplace accidents, where people take three or more days off work, had increased by 31 per cent between 1995 and 1999.
"Even though the numbers in the workplace have grown considerably, the increase in the level of accidents is disproportionate," said Mr Murphy. "Workplace fatalities increased by over 18 per cent in just two years between 1996 and 1998."
Mr Murphy also rejected the claim that cases were taking too long to settle and dismissed calls for the establishment of a personal injuries tribunal system.
Mr Peter McDonnell, chairman of the Association of Personal Injury Lawyers in the Republic, described Mr Crowley's comments as hype. "The rise in litigation and the total amount of compensation being paid lies fairly and squarely in the hands of those who give rise to the cause of litigation. My message is to stop whinging and fix the core problems.
Employers organisations should work to achieve best practice in safety within the workplace in a bid to drive down the numbers of accidents and subsequent claims, he said.
