Do not blame courts for the high cost of insurance

The high cost of insurance in Ireland has rightly been the subject of much debate in recent times. The debate has largely been led by the insurance industry’s agenda to convince the general public that the cause of high premiums is the level of damages awarded by the courts. Some lobby groups claim that the legal profession is actively resistant to change. These misleading headlines should not be allowed to divert attention away from the real factors contributing to premium increases.

Clever and expensive propaganda campaigns directed at making it socially unacceptable to go to court should not detract from a citizen’s right of access to justice.

Little or no change is evident within the insurance industry other than increasing premiums and consequently growing profits. In stark contrast, there have been dramatic reforms in the area of personal injury litigation in recent years. These changes include the establishment of the Personal Injuries Assessment Board and the introduction of severe penalties for claims that are deemed to be fraudulent or exaggerated. These changes, among others, have resulted in a considerable reduction in the number of cases that now come before the courts. Of the cases that do proceed to a hearing in open court (about 5 per cent of all cases), the entire process is fully transparent with any member of the public entitled to enter the court to witness the administration of justice.

Independent judges

Awards by the courts are made by judges who are independent and have no vested interest. They make awards based on what they assess to be fair and appropriate compensation. Judges must be fair to both the injured person and the wrongdoer. The Court of Appeal, which was established in 2014 after a constitutional referendum, has stated minor injuries should attract appropriately modest damages, middling injuries should attract moderate damages and severe injuries should attract significant damages.

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What is worryingly less transparent, however, is the information relating to the bulk of the 95 per cent of claims that do not end up in court and are settled privately outside of the court; details of which are closely guarded and withheld from scrutiny by the insurance industry. The non-disclosure of data by the insurance industry is a significant barrier to a comprehensive understanding of the claims environment and of the factors impacting on premium increases. The establishment of an independent body to collate claims is vital so that a clear and independent picture of the cost of claims in Ireland can be obtained and used to inform ongoing debate and improvement in this area.

The role of barristers is to advocate on behalf of people and to assist them in accessing justice

Contrary to some media reporting, the number of personal injury cases being taken has not dramatically increased. The Bar of Ireland – the representative body for barristers – is actively engaging with Government initiatives to further reform the personal injuries landscape in Ireland, including through participation in groups such as the Department of Finance-led Cost of Insurance Working Group and the Personal Injuries Commission (PIC).

Judicial guidelines

The Bar of Ireland supports the adoption of a carefully considered and collated set of judicial guidelines (as recommended by the PIC report). This represents a positive step forward in helping to achieve greater levels of consistency and certainty in awards and in increasing the frequency of early resolution of claims. However, any steps, including the introduction of legislation, to reduce the level of awards must be considered in tandem with and in preservation of the citizen’s constitutional rights.

The role of barristers is to advocate on behalf of people and to assist them in accessing justice – this applies equally to injured parties and insurers. Barristers act for plaintiffs and defendants alike and both sides are entitled to be heard. Ultimately, individuals who are genuinely injured are entitled to fair compensation, irrespective of what consequences that may have for the insurance industry who continue to make vast profits despite their protestations regarding the level of awards in this jurisdiction.

Where a person has suffered an injustice or been injured in an accident due to another’s negligence, or where a person has been wrongly accused of wrongdoing or carelessness, no amount of organised propaganda should deflect from their entitlement to go to court to have their rights vindicated or their interests defended. While an important debate is to be had, it is essential that all aspects are examined and not just those that grab the headlines. That includes the claims statistics currently withheld by the insurance industry.

Micheál P O’Higgins SC is chairman if the Council of the Bar of Ireland