News last week that motor insurance premiums fell 5 per cent in the first half of last year is welcome, indicating that Judicial Council guidelines on awards for personal injuries, introduced in April 2021, have begun to bear fruit.
It means, according to Central Bank data, that the average premium for motor cover has fallen 19 per cent from a peak in late 2017 to ¤575 by the middle of last year.
But, counterintuitively and worryingly, the latest figures show that there was a decrease in the proportion of injury claims that settled directly with insurers, or by going through the Personal Injuries Assessment Board (PIAB) - and a rise in those resolved through the much more expensive route of litigation.
Some 39 per cent of cases were settled through litigation in the first half of last year. That is up from an average of about 34 per cent over the previous seven years.
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And while the Judicial Guidelines are supposed to lower the attraction or incentive of going the legal route –as there should be little upside for claimants in doing so – there was a much bigger drop in awards from the PIAB than in litigated cases in the first six months of last year.
The average of all claims settled for less than €100,000 - which amounts to 94 per cent of all personal injury cases - fell by 24 per cent to €15,665 from 2021, but dipped by a little over 7 per cent, to €22,473, for litigated cases. Whether this is an anomaly remains to be seen, but if this trend were to continue, it must raise questions.
Meanwhile, the sooner the Government signs off on a commencement order to allow the PIAB to offer mediation to resolve a claim – as allowed under laws enacted last year – the better.
The same goes for duty of care reforms, included in a bill going through the Oireachtas at the moment, that are aimed at balancing a property owner or business’s responsibilities with those of customers or the general public. This could help to reduce public liability premiums and thus reduce a threat hanging over many businesses.