The new Personal Injuries Assessment Board (PIAB) is awarding far too much to claimants with "less severe injuries", the Irish Business and Employers' Confederation (Ibec) complained at an Oireachtas committee hearing yesterday.
Tony Briscoe, Ibec's assistant director, told the Oireachtas Committee on Enterprise and Small Business that the employers' body supported a review of the level of damages awarded by the PIAB, which was set up by the Government to handle road accident and work injury claims where liability is not contested.
Calls for a review of the PIAB comes less than two months after a five-year-old girl, whose only medical treatment following a car accident was "reassurance" from her doctor, was granted €7,500 worth of damages by the board.
Before the PIAB was established last year, insurance companies which lobbied for its introduction had blamed high legal costs for driving up premiums.
Insurance ranks as the third most important non-pay issue for business in the Republic, Mr Briscoe told the hearing.
Irish firms saw their insurance costs drop oaverage 8 per cent in 2005, compared with a rise of 7.4 per cent the previous year, he said, citing a recent Ibec survey.
PIAB chief executive Patricia Byron said in early May that insurance companies and personal injury claimants were rejecting one-third of about 2,000 awards made by the board since it was set up, opting instead to have the cases settled in court.
While the PIAB is designed to cut out legal costs, any party availing of the system can go to court if they are not happy with the outcome. Ibec said employers were experiencing a rise in the number of claims, often from people who had not suffered financial loss but were seeking compensation as a matter of routine.
Patrick Neary, chief executive of the Irish Financial Services Regulatory Authority, defended the regulator's solvency requirements for insurance companies as it strives to protect consumers. The financial regulator plans to publish revised guidelines on solvency within the next two weeks after the Competition Authority called for greater transparency.
"I would point out that there is no evidence that our solvency regime impacts negatively on competition and that all of the major international insurance groups and many of the next line of insurers are active in the Irish market," he told the committee.
The financial regulator requires new entrants to the Republic's non-life insurance market to have a solvency margin twice that of the EU minimum. The higher solvency requirement had not proved an obstacle for any of the 59 new companies that received authorisation between 2001 and 2005, Mr Neary said.
