The Government should be prepared to promote a constitutional referendum to allow damages in personal injuries cases to be capped, according to the chief executive of the Irish Insurance Federation.
Mr Mike Kemp was speaking at a breakfast debate on the subject "Compensation Levels - Are they Fair?" in Dublin yesterday.
The conference also heard that compensation levels in Ireland were up to three times higher than in the UK for minor injuries but can sometimes be lower for more serious cases.
Mr Kemp called for a debate on the level of compensation awards in Ireland, pointing out that they were the highest in the EU.
This resulted from a number of factors, he said. It was due not only to the relative generosity of our courts to the victims of accidents but also to the lack of State provision, compared to other EU countries, of medical care for accident victims and post-accident income replacement.
Higher costs were also caused by a higher ratio of claims to accidents, and higher legal and associated costs, including expert witnesses, he said. The report of the Motor Insurance Advisory Board and the the Government's insurance reform programme had only tackled two elements of the cost of insurance, legal costs and accident and claims frequency.
The greatest factor pushing up Irish insurance costs in comparison to other countries was the difference in damages. Unless they were brought into line with other countries, higher insurance costs would continue.
While there may be good reasons why, as a society, we would want to be generous towards accident victims compared to other countries, there were economic reasons why we may reach the conclusion we simply cannot afford to continue to pay such generous compensation.
"The IIF is trying to generate debate," he said. "If the conclusion of the debate is that damages should be capped, it can be done. It is highly likely that any attempt to set reduced damages by statute would run into constitutional difficulties. But if a referendum is needed, why not let the people have their say on the subject?"
Ms Dorothea Dowling, chairwoman of the Personal Injuries Assessment Board (PIAB), said that while awards for minor injuries may sometimes be too high, those suffering from very serious injuries were in danger of not being properly provided for.
She warned that the forthcoming Road Traffic Bill proposed ending unlimited liability for personal injuries. This could lead to the money running out for those with serious injuries, whose cases were normally finalised after those of people with minor injuries.
"What people with serious injuries need is security and ongoing payment," she said. "A once-off lump sum does not meet the needs of the very, very seriously injured."
According to Dr Brian Greenford, of the University of Limerick, compensation awards in Ireland for minor injuries were up to three times higher than in the UK. However, they were sometimes lower for more serious injuries.
Research carried out this year showed that in England a substantially-recovered neck injury received an average award of €2,320, compared with €7,200 in Ireland. However, a person who lost both legs received, on average, €20,537 in England, compared with €15,500 in Ireland.
A solicitor specialising in personal injuries, Mr Tom Baldwin, said that the voice of the accident victim was excluded from such debates. They were not asked to describe how their injuries impacted on their daily lives and on earning capacity or lost earnings.