The State's own agencies are contributing to the country's "compo culture", according to the chairwoman of two bodies established to tackle the fallout from the problem.
Ms Dorothea Dowling told the Oireachtas committee investigating high insurance costs that health boards whose hospitals treated road accident victims subsequently put pressure on the same individuals to sue for personal injury compensation.
Ms Dowling, who chairs the Motor Insurance Advisory Board (MIAB), explained that under the Health (Amendment) Act, 1996, people normally entitled to free healthcare did not get this benefit if they were involved in a road accident.
Consequently, health boards pursued them for the €600-a- night cost of hospital treatment, and pressurised them to make personal injury claims. She said that the MIAB had come across two situations where accident victims who would not otherwise have done so, proceeded to make personal injury claims.
"It hardly makes sense that you have somebody from the State's health service pursuing this, when in turn it forces premiums up, which means that jobs are being lost and tax revenues are going down, so then there is less money for the health service," she said.
Ms Dowling also chairs the interim Personal Injuries Assessment Board (PIAB), designed as a low-cost alternative to the courts. She said it would cost an estimated €8 million a year and handle 27,000 cases annually. It would require 100 staff.
She told the committee that the board would be handling "the 90 per cent of cases" that go into the courts system but that are settled before they get to a hearing. Ms Dowling said that the board intended to operate on a break-even basis and would not cost the taxpayer anything.
The Tánaiste, Ms Harney, appointed Ms Dowling to the chair the interim PIAB last November. The Government intends to have the board up and running at the beginning of January 2004.
Ms Dowling told the Oireachtas committee on enterprise and small business, that the current system was letting down the people it was designed to serve, the genuine, seriously injured victim of another's negligence.
"They have to wait six times longer than in the UK for negotiations to even begin on their claim," she said. Ms Dowling added that the PIAB would handle cases like this where liability was not disputed.
She also argued the insurance industry allowed the current situation to develop by being prepared to accept losses on its premium income while it enjoyed good returns on investment income.
Ms Dowling criticised both the Law Society and the Bar Council for making "disingenuous" submissions to the committee and for making what she described as irresponsible statements about the PIAB.
The committee will resume later today and hear submissions from the Irish Brokers' Association, the Irish Road Hauliers' Association and the Irish Congress of Trade Unions.
