Reducing the costs of motoring and business insurance formed a central plank in the Coalition Government's election programme. But 18 months have passed and the progress made on both fronts has been disappointing.
Some insurance companies have been reluctant to pass on the benefits of the penalty points system to the consumer, while others imposed excessive insurance charges on businesses and caused them to close. At the same time, the legal profession has resisted reforms designed to control costs because of their likely effect on the earning power of its members. Powerful vested interests are involved, with competing agendas. The task of the Government is to ensure that the consumer gets good value for money; that our "compo" culture, with its fraudulent claims, is confronted and that competition operates in the market place.
Savings of up to 30 per cent on motor insurance premiums were alluded to by the Tánaiste and Minister for Enterprise, Trade and Employment, Ms Harney, when she published details of an action plan a little more than a year ago. Those elements of reform within the compass of her Department have been implemented. But the Tánaiste's appetite for change has not been matched elsewhere in Government and only 26 of the 67 reform measures have been enacted. In that regard, the Department of Justice, Equality and Law Reform, with the responsibility for legal costs, court procedures and other matters, was particularly remiss.
Some progress has, however, been made. The Personal Injuries Assessment Board, (PIAB) which was established on an interim basis last November, is expected to begin work early next year. A database of previous court awards in personal injury cases will allow the board to recommend financial settlements in a non-adversarial setting, thereby saving time and money. Its work will gradually be extended to injuries arising from motor accidents and public liability.
The Small Firms Association has suggested the new system should reflect compensation levels within Britain and the EU, rather than the substantially higher awards made by Irish courts. If the PIAB is to succeed in weaning members of the public away from unnecessary and expensive court hearings, however, it must offer them an equivalence in compensation.
A Book of Quantum will be published, setting out the "going rate" for particular injuries, as a means of encouraging a negotiated settlement between the parties.
Another major element of reform involves legislation designed to penalise those people who make fraudulent insurance claims. The heads of a Civil Liability and Courts Bill have been published. But, with less than two months remaining in the legislative year, the prospect of it becoming law before Christmas is fading. Under the proposed law, plaintiffs will have to swear an affidavit, outlining the circumstances of an accident and the nature of the injuries suffered.
If claims are subsequently found to be false or exaggerated, the individuals may be charged with perjury and imprisoned for up to 10 years. They may also be pursued for legal costs. A ban on "no-foal-no-fee" advertising by solicitors is also envisaged as a means of cracking down on the so-called "compo culture". Such measures are both necessary and long overdue. The Government should get on with the job.