Irish PI compensation changes a ‘major step forward for the market’

8th March 2017

Ryan Hewlett 

Guideline changes to personal injury lawsuit compensation in the Republic of Ireland is a major step forward for the market, one of the country’s top lawyers has said.

Speaking at a Lloyd’s market briefing, Jack O’Brien, partner at O’Brien Lynam, said changes made to the Book of Quantum deliver “a degree of certainty” for claims managers and insurers on the level of awards that will be made in a case regarding personal injury claims.

Changes to the Book of Quantum, a book that Ireland’s courts have a statutory requirement to refer to when assessing damages for injuries, introduces new injuries as well as including additional classifications of severity of injury.

The briefing, Ireland Claims Awards What’s Next? comes as UK insurers reel from the decision by the UK Government to revise the discount rates for personal injury claims.

Jack O’Brien said: “August 2016 saw the publication of the revised Book of Quantum for Ireland to provide guidelines on the award of personal injury.

“Without doubt it is a major step forward for the market when taken in context with the significant changes and effects that have been placed on the Irish market over the past 15 years.

“During that period Ireland, has seen the advent of the Euro, and in 2003 the establishment of the Injuries Board followed a year later by the first book of quantum, and then the establishment of the Irish Court of Appeal, coupled with the economic crisis.

“All have had their own impact in shaping the current insurance claims environment in Ireland and provided challenges for the London market and other insurers operating in the country.”

O’Brien added: “Over the past two to three years we have seen the Court of Appeal taking a more conservative approach to the awards that have been made in the high court with some high-profile cases seeing those awards reduced considerably on appeal.

“It has had the effect of making circuit and high court judges think harder about the level of the awards they are prepared to make given the Appeal Court’s approach.

“What the revised book of quantum delivers is a degree of certainty for claims managers and insurers on the level of awards that will be made.”

The updated guidelines, coupled with the emergence of an effective Appeal Court will serve as a boon for insurers in clamping down on fraudulent and over exaggerated personal injury rewards.

“With the Book of Quantum on the one hand, and an effective Court of Appeal on the other, we have the ability to form a pincer movement to tackle the exaggerated costs associated with personal injury claims,” said O’Brien.

Insurers must fight fraud in the courtroom: Justice Kearns

Ryan Hewlett 

8th March 2017

Insurers must fight back against exaggerated and fraudulent personal injury claims in court, the chairman of Ireland’s Personal Injury Commission has said.

Justice Nicolas Kearns, a former president of the Irish High Court and a member of the Council of State, said there is an unwillingness for insurance companies to fight fraudulent claims in court, and failure to do so only exacerbates the problem.

“There is an apparent unwillingness of insurance companies to stand up in court and fight back. Why don’t they fight back? So many of these fraudulent claims are so easy to exploit,” said Kearns.

“What has been happening in recent years is that a decision is taken at some level where by it is easier to throw €10,000 to €15,000 at a claim to make it go away rather spending three days in court to win the case, receive and order of costs that the insurer will never be able to collect, and then end up with a much bigger bill then they would have had to deal with originally.

“This only makes the problem worse. It encourages a culture amongst a very small minority of lawyers and solicitors to milk the system and to build false claims.”

Speaking at a London market briefing, Ireland Claims Awards What’s Next?, Kearns said that the Irish claims environment has been typified by a very “significant jump” in insurance premium prices in the Republic of Ireland.

“Insurance prices overall have increased by 56% in Ireland since 2011, motor insurance prices have risen 66% in the same period and by 25% in the 12 months to September last year. You don’t need to be Einstein to work out that something has got to give. It is clear that this cannot go on,” Kearns said.

“All of this is happening against a backdrop of runaway awards and absence of any coherent approach to the measurement of damages.”

This increase in premiums and the issue of lack of coherency are two of the issues under focus of Ireland’s Personal Injury Commission.

Kearns is chairman of the commission, a body set up to offer guidance on compensation claims and investigate and make recommendations on processes in other jurisdictions, which could enhance the claims process in Ireland.

This will include the commissioning of medical research, benchmarking of international awards for personal injury cases, analysing and reporting on international compensation levels, as well as compensation mechanisms.