An important amendment has been introduced into the Road Traffic Bill in response to representations from the insurance industry. If passed, it could have grave consequences for victims of serious accidents. It gives power to the Minister for the Environment to set a cap on insurance awards if he considers such a move necessary to ensure that motorists continue to receive cover.
This follows representations from the insurance industry in pursuit of its contention that continued cover for motorists could be in danger if an outright cap was not forthcoming.
Mr Cullen did not accede to this demand, but the prospect of the introduction of such a cap in the future raises serious questions about the legislative process and the extent to which international financial institutions can hold a gun to the head of the Irish legislature. A cap on insurance awards offers no obvious benefit to consumers. There has been rare unanimity from the lawyers' organisations and their nemesis, the Personal Injuries Assessment Board chairwoman Dorothea Dowling, that a cap could put the necessary care of seriously injured people, with long-term health complications, at risk. It could also open individual motorists to the risk of personal liability in order to meet such a shortfall.
There is no guarantee that lower premiums will follow any such measure. Existing reforms of the personal injuries regime have led already to hugely increased profits for the insurance industry. It would be naive to imagine that its latest demands stem from anything other than the thirst for yet more profits. The head of the Irish Insurance Federation recently called for a constitutional referendum to permit legislation limiting the size of insurance awards in general. He expressed confidence that it would be passed.
There is undoubtedly a widespread feeling that some awards, especially for minor injuries, may be too high. But it is unlikely that voters would support a measure that would leave the victims of life-altering accidents facing poverty and inadequate medical help as well as their trauma.
Compulsory motor insurance is required by law. It now appears that the insurance industry is seeking to set the terms on which such insurance is provided. The IIF has called for a debate on insurance awards. There is indeed a need for a debate in relation to insurance but perhaps it should cover other areas, in particular the extent to which an unelected body, representing an industry pursuing untrammelled profits, should be allowed to determine Government policy.