New personal injury measures needed to reduce premiums – report

A report has called for new guidelines for judges on personal injury damages in order to cut down on inconsistencies in awards made and to reduce insurance premiums for consumers.

Mr Justice Nicholas Kearns, former president of the High Court, yesterday presented the findings of the second and final report of the Personal Injuries Commission, which revealed the average compensation award for whiplash is about 4.4 times higher in Ireland than in Britain.

The main recommendation is that the Judicial Council, which is expected to be on the statute books by the end of the year, should compile guidelines for "appropriate general damages" for various types of personal injury.

The guidelines would be reviewed at regular intervals, such as every three years. “The PIC believes this overall approach will achieve in early course a greater level of consistency in Ireland in the assessment of general damages,” the report said.

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Mr Justice Kearns, speaking after launching the report, said this would reduce insurance premiums for consumers.

“If there is consistency of court awards and recalibration of compensation, it has to result in a reduction of premiums,” he said.

Furthermore, the report said claimants “must give prompt notification” of any potential injury claim so that a “proper investigation” of the circumstances may be undertaken by a defendant.

“The idea of just getting in under the gate before the two-year limitation period expires is very, very unfair to the defendant, and leaves a very dangerous situation in a sense that a claim that has no real basis cannot be investigated,” said Mr Justice Kearns.

Fraudulent claims

The report pointed out that “exaggerated and fraudulent claims” have an “adverse impact” on overall claims costs which, in turn, raises premium costs. The issue, it said, could be tackled with “technological strategies to prevent and detect such activity”.

“Fraudulent activities currently carry a low risk of detection and an even lower risk of prosecution, and these are factors which tend to foster and encourage the continuance of the problem,” it said.

Mr Justice Kearns said estimates of the cost of fraudulent claims to the insurance industry ranged from €50 million-€200 million per year.

The report also recommended the establishment of an Irish Garda Fraud Investigation Bureau along the lines of the Insurance Fraud Enforcement Department in the UK. This, Mr Justice Kearns said, could be funded by “a levy on insurance companies, which they would undertake not to pass on to their customers or clients under any circumstances”.

In addition, the commission highlighted “a lack of consistent and detailed industry-wide coding of injury data”, and called for insurers to adopt the same internationally recognised system.

It also recommended that, in cases where an insurer deals directly with a claimant, “no offer in settlement or payment of a personal injury claim should be made unless and until a medical report has been obtained”.

“The medical report should detail the nature, extent and prognosis of the injury,” the report continued. It also said individuals who suffer whiplash should receive timely treatment as part of a standardised treatment plan, which would ease pressure on costs.