Dorothea Dowling has just been named the Irish motor industry's Person of the Year. The chairwoman of the interim Personal Injuries Assessment Board, she is determined to reduce insurance costs, she told Carol Coulter, Legal Affairs Correspondent
If insurance premiums do not drop by 31 per cent when the PIAB and other reforms proposed by the Motor Insurance Assessment Board are operational, Dorothea Dowling will be asking the insurance companies why.
This is the insurance industry's own estimate of the savings that could be made "all things being equal" and, given its provenance, she thinks it is a conservative estimate.
Of course, all things may not be equal. Events that have nothing to do with motor insurance have already changed the landscape for the insurance industry, notably September 11th, the recent German floods and the collapse of the equities market. But even if these all lead to an increase in insurance costs, Dorothea Dowling believes that the reductions that can be achieved by reform in the areas of employer liability and car insurance will offset much of this increase. She will be seeking very specific justification for any falling behind that 31 per cent target.
So when can we expect to see the PIAB up and running? "How long is a piece of string?" replies Dowling. "I would hope to have a working model by 2003. We expect to have obstacles put in our way by the legal profession. But we have asked them to leave vested interests aside and assist us in helping ordinary people where there are no legal issues.
"We are anxious to uphold the highest standards of natural justice. They have the expertise and I would like to have their input. I was surprised and disappointed the two bodies with the expertise, the Law Society and the Bar Council, have not engaged.
"I take the point that there is a need for major reform of the court system. But that is a parallel project. The PIAB is an alternative dispute resolution mechanism. We are trying, as part of its ethos, to get away from the adversarial system. Damages should not be decided on eloquence. We want to introduce transparency. That is why there will be a book of quantum."
Dowling has with her the UK book of quantum, which gives maximum and minimum amounts payable in the event of certain specified injuries. The amounts are very low by Irish standards, and she stresses that there is no intention to reduce the awards that accident victims in Ireland get at present.
The Irish book of quantum will be based on the awards that are being made at the moment, and one of the first tasks of the interim PIAB is to develop a data-base containing this information. This may not be easy, as the court records are unlikely to be complete. If necessary, she says, the board will trace individuals through the court lists and seek the information from the solicitors. But she hopes that this will not be necessary.
"Those of us who work in the business know what the level of damages are. But the assistance of the legal profession would be invaluable."
So where will the savings come from? "In the PIAB model the insurers will not incur any costs. At the moment the extra costs [made up of legal fees and expert evidence] are 40 per cent of awards, so there should be a 20 per cent saving. There is no constitutional right to legal costs, so plaintiffs will not necessarily get legal costs if they have representation. They do not get their legal costs in the Employment Appeals Tribunal.
"It will be a documents-only procedure. Where will the legal costs come from for the plaintiff? There will be independent experts if there is a dispute about the medical evidence."
There will also be new anti-fraud measures in personal injuries actions, where all plaintiffs will sign a simple affidavit. This will state: "I acknowledge that if any part of may claim is proved to be fraudulent I lose all entitlement to my claim." This will be made in advance in claims to both the PIAB and the courts.
What about the problems that arise from the different impacts of the same injury on two different individuals? A broken leg will mean something different to a ballet dancer and a sedentary worker.
"The loss of wages is an actuarial matter. Pain and suffering is a subjective element that will be based on the medical evidence. They are not legal issues."
So who will staff the PIAB? "There will be a medical director. There will be people with accounting and actuarial skills, and they will be drawn from the appropriate backgrounds. Plus we will have administrative staff.
It will be a documents-only process, so there is no need for it to be in Dublin. We will operate six days a week, 52 weeks a year, so the PIAB will be very productive."
Many commentators, especially those engaged by the legal profession, suggested that the PIAB would be enormously expensive, with accountant Des Peelo, who wrote a report for the Law Society, coming up with a figure over €30 million. Dowling emphatically rejects these figures: "The set-up costs will be €1.26 million, and the annual running costs will be €5-6 million."
The insurers will be the people to benefit. Will they pay for it, or will it be the taxpayer? "There will be savings for the insurance industry. But it will improve the service for claimants as well. It is important that the insurance regulator gets access to the raw data of the insurance companies, and that savings are passed on to the consumer.
"But if motor insurance is so profitable here [and there is general agreement on profitability of 4.5 per cent] why are European companies not clamouring to come in here? Because we have a reputation for volatility in damages, and for a claims culture."
Initially the PIAB will deal with employers' liability claims and motor insurance claims where the issue of liability is not contested. But she sees its role extending. "The PIAB may be willing to take cases where there has been liability apportionment, but the parties can't agree on the amount of damages. So we could assess the damages and they could sort out between them the legal costs that had been incurred. In employer liability cases there will be a lot of cases where the employer would be prepared not to raise the employee's contributory negligence in order to get a quick resolution of the claim."
Eventually issues like medical negligence could go to the PIAB, again, where liability was not an issue, she suggested.
She hopes that cases should start going to the PIAB next year, even if they had been incurred the previous year. But this all depends on progress being made in the reform of the court process, which was also part of the Programme for Government. "Day One of the PIAB will have to work with Day One of court reform."