Compensation Claims Crisis in Ireland!

Tom Harrington LL B F Inst. MTD

In Ireland, there is no downside for the chancers who make false personal injuries claims in court. Here, the whiplash culture is rampant in motor vehicle insurance claims. However, exorbitant insurance claims awards following motor injury claims are set to tumble when a report by High Court President Nicholas Kearns, warns personal injury awards in this country are a multiple of those paid in other states and recommends judges compile new guidelines for lower awards. Claimants exaggerate their injuries to doctors, insurance companies and other parties involved when swearing affidavits. These same claimants also endeavour to deliberately bypass the Personal Injuries Assessment Board (PIAB) in a bid to have their cases heard in court – where awards tend to be higher and their legal costs are paid.  Also, there is very little chance of detection for those making false claims and there appears to be no punishment for lying in court. The insurance industry estimates that fraud costs around €200 million a year. The true figures may be a multiple of this, as that figure only represents the level of fraud detected.This article gives a synopsis of the Compensation Claims Crisis in Ireland and the proposals to recommend judges compile new guidelines for lower awards. Finally, it’s high time official Ireland took the fraudulent claims issue more seriously and give the opportunists and chancers their come-uppance.

Introduction

In order to claim compensation for a car accident in Ireland or Great Britain,  it has to be established that an accident occurred due to the negligence of another road user who owed you a duty of care. Car accidents injury compensation can be awarded even when the driver of the vehicle in which you were travelling was at fault and should take into account the consequences to ones quality of life due to both the physical and psychological trauma the victim has suffered along with any financial costs which have been incurred. The whiplash culture is rampant in motor vehicle insurance claims in Ireland. Claimants exaggerate their injuries to doctors, insurance companies and other parties involved when swearing affidavits. They religiously wear neck braces, use crutches and wheelchairs whilst waiting for their case to be heard. However, once the courts award significant compensation and their claim is settled satisfactorily they immediately abandon all these aids and miraculously return to full health. These same claimants also endeavour to deliberately bypass the Personal Injuries Assessment Board (PIAB) in a bid to have their cases heard in court – where awards tend to be higher and legal costs are paid. All personal injuries claims, with the exception of medical negligence cases, have to initially go through the PIAB. It now appears – and not before time – that the exorbitant award levels of compensation for motor injury claims is to be reined in.

Abuse of the System

The report says fraudulent and exaggerated claims carry a low risk of detection and “an even lower risk of prosecution”. Mr Justice Kearns found that award levels here are 4.4 times those paid in England and Wales. The report states that whiplash award levels are a “stark multiple” of these in the UK. But investigation of claims is poor, and with little risk of prosecution when fraud is exposed, there is a “perfect climate for abuse of the system”. Average motor claims were €18,073 in 2015: €19,904 in 2016 and €20,826 in 2017, with the pay-out amount rising by €900 a year. These exclude legal fees, which separate reports found can add 40pc to the award amount. The report looked at awards made for under €100,000. The Commission found a lack of consistency in the amounts awarded by the same jury. The Personal Injury Commission is based on one million claims, but the data only includes general damages. This is money awarded to an injured person to compensate them for their pain and suffering. Special damages – for loss of wages, medical expenses and other costs – were not looked at. Including legal costs and special damages, the costs of claims are even higher.udges have been told to sort out the compensation claims crisis – which would help lower insurance premiums. An unpublished report by former High Court President Nicholas Kearns warns personal injury awards in this country are a multiple of those paid in other states and recommends judges compile new guidelines for lower awards. The guidelines would take account of the benchmarking of international award levels, according to the reports by the Government’s Personal Injuries Commission (PIC), chaired by Mr Kearns. The reports has yet to be presented to the Cabinet, but represents one of the most serious attempts to sort out the compensation and the associated insurance crisis in decades. Mr Justice Kearns’s report found pay-outs here are among the highest in the world. The average motor claim is almost €21,000. This compares with close to €4,000 in the UK, €1,500 in France and between €2,000 and €6,000 in Germany.

Book of Quantum

This “rebalancing and recalibration of Irish awards” should be done as part of the soon-to-be established Judicial Council. The guidelines produced should take account of the ground-breaking work of the Personal Injuries Commission which proved award levels here are a multiple of those paid in other countries. The judges should also take note of appeal court decisions which have cut compensation levels awarded in lower courts. Having judicial guidelines is similar to the approach in the UK and Northern Ireland. Such an approach here kills two birds with one stone. It forces judges to recognise they are part of the problem and by getting them to produce awards guidelines; it gets then to buy-in to a solution to the compo shambles. Mr Justice Kearns states in his report:udges don’t like being told what to do. They value their independence, and are not in favour of mandatory sentences or caps on awards in civil cases. But judicial discretion is undoubtedly one of the reasons we have an out of control compensation culture in this country, which itself is one of the key contributors to our insurance crisis. Award levels in this country are a multiple of those in other states, and there is practically no downside to taking a false or exaggerated claim. Indeed, the Personal Injuries Commission says the awards system here encourages foreign criminals to fly in and make fraudulent claims and then when awarded a significant sum for their alleged injury, high-tail it back to their own country with a ‘deep pocket’. As well as being very high, award levels for the same injuries are inconsistent. There is a Book of Quantum, [1] put together by the Personal Injuries Assessment Board (PIAB). But it merely reflects awards made in the courts, and the PIAB. And anyway, judges only have to have regard to the Book of Quantum’s setting out of compensation levels for various categories of injuries. Recognising that judges are part of the problem, it is a clever move by former President of the High Court Nicholas Kearns to recommend that the judges sort out the runaway compo mess. They have been told to get together and come up with their guidelines on what is the appropriate pay out for various types of injury.

“Judicial guidelines should lead to greatly increased levels of consistency in awards, increase the frequency of early resolution of claims, reduce costs and generally provide a much better informed process, given that PIAB complies and reviews the Book of Quantum by reference to awards in the courts.”

Mr Justice Kearns second report is the most important move in decades to deal with the compensation and insurance crisis. But it will require more commitment from the Government than we have seen up to now if it is to succeed. If the planned law establishing the Judicial Council is not put in place quickly, Mr Justice Kearns recommends the process of setting up new guidelines to replace the existing Book of Quantum should be fast-tracked by the Government. He considers the situation to be urgent. Now all is needed is for the Government, and specifically Junior Minister Michael D’Arcy, to find their mojo and act on Mr Justice Kearns recommendations.

Conclusion

Sometimes it seems that we make it easy for claim fraudsters in this country. There is no downside for chancers making false claims. The whiplash culture is rampant in motor vehicle insurance claims in Ireland. Claimants exaggerate their injuries to doctors, insurance companies and other parties involved when swearing affidavits.

We have a real problem with fake claims. Settlements are large in this country, which encourages fraud. There is very little chance of detection for those making false claims. And there appears to be no punishment for lying in court. The chances of a fraudster being charged with perjury are infinitesimal. The chancers don’t have to pay for legal representation as there is always a lawyer around to take on a claim, however questionable, on a no-foal, no-fee basis.

These same claimants also endeavour to deliberately bypass the Personal Injuries Board (PIAB) in a bid to have their cases heard in court – where awards tend to be higher and legal costs are paid. All personal injuries claims, with the exception of medical negligence cases, have to initially go through the PIAB. It now appears – and not before time – that the exorbitant award levels of compensation for motor injury claims is to be reined in. Judges have been told to sort out the compensation claims crisis – which would help lower insurance premiums. An unpublished report by former High Court President Nicholas Kearns warns personal injury awards in this country are a multiple of those paid in other states and recommends judges compile new guidelines for lower awards. The guidelines would take account of the benchmarking of international award levels, according to the reports by the Government’s Personal Injuries Commission (PIC), chaired by Mr Kearns. Judges have been told to get together and come up with their guidelines on what is the appropriate pay out for various types of injury. This “rebalancing and recalibration of Irish awards” should be done as part of the soon-to-be established Judicial Council. The guidelines produced should take account of the ground-breaking work of the Personal Injuries Commission which proved award levels here are a multiple of those paid in other countries. Finally, judges, government, the insurance industry and other stakeholders must show more commitment and get their ‘act together’ to tackle the current exorbitant award levels of compensation for motor injury claims – and not before time – if we are to sort out the Compensation Claims Crisis in Ireland.

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