‘Victims of negligence are ignored in one-sided debate’

The insurance industry is being fundamentally dishonest by claiming that ‘compo culture’ is to blame for a rise in insurance premiums, according to Justice Kevin Cross who oversees the personal injury list of the High Court.

“The word of a vested interest group has been trotted out without adequate scrutiny by some commentators,” the judge said, in a comment to the Sunday Business Post.

Director of Government Affairs with Insurance Ireland Declan Jackson told Today with Séan O’Rourke on RTÉ Radio One that the figures “don't really tally with our understanding of the information that’s published by the Courts Service”.

“If we look at the Courts Service annual reports for the District and the Circuit Court, we have five per cent claims inflation each year since 2015,” though he accepted there has been “some abatement in a higher court”.

Recalibrate awards 

Jackson said that he was delighted that the Judicial Council Bill will recalibrate awards, which he said are problematic in relation to a high volume of low-value under - €35,000 personal injury claims.

Séan O’Rourke asked whether the courts are displaying ‘softness’.

“No, I don't think we’re saying that at all, Séan,” Jackson responded.

He continued that the last time there was reform of the claims cost system in this country was in 2004 with the introduction of the Personal Injuries Assessment Board (PIAB).

Law Society director general Ken Murphy (pictured) entered the debate by saying that Mr Justice Cross is charged with the personal injuries list in the High Court and knows his way around this.

Mr Justice Cross largely does medical negligence cases, Ken Murphy pointed out, and he says claiming that “compo culture and fraudulent claims are responsible for the rise in insurance premiums is just incredible”.

Forensic

Ken Murphy said that Pearse Doherty of Sinn Féin had conducted a very forensic cross examination of insurance, insurers with the Oireachtas Finance Committee, which destroyed the credibility of the argument in relation to fraudulent claims.

“Charlie Flanagan, the Minister for Justice, has been highly critical and supportive of that analysis and again doesn’t believe a lot of the assertions around the insurance industry,” he said.

Scathing

“Minister of State Michael Darcy is of the same view,” he said, and the Oireachtas Finance Committee, chaired by John McGuinness, is scathing about the insurance industry.

“There's a lot of criticism out there. And not only that but there are three major enquiries into the insurance industry in Ireland at the moment; the European Commission is investigating suspicions of breaches of competition law, the Irish Consumer and Competition Commission is investigating, and the Central Bank most recently is investigating differential pricing.

“There's a lot of enquiries and a lot of questions which frankly most commentators who have gone into this don't believe the insurance industry is answering or capable of answering,” he said.

Exaggerated claims

Ken Murphy said that any amount of fraudulent claims is too much but he questioned where the exaggerated claims are coming from in this situation.

Declan Jackson responded that An Garda Síochána is on the record as saying about 230 to 258 fraudulent cases in the last two to three years

“In the UK, the insurance fraud investigation unit opens about 380 cases a year. That’s for a population 10 times our size,” he continued.

Innocent victims 

Ken Murphy said that any reduction in the level of awards being paid to claimants, to the innocent victims of accidents, should not simply inflate the already enormous profits of the insurance industry.

Broadcaster Séan O’Rourke said that insurance fraud and ‘compo culture’ are not necessarily the same thing.

Declan Jackson said the vast majority of claimants are genuine but two out of every ten warrant further investigation.

“An insurer may decide to pay that claim, part-pay that claim or disallow that claim.

Proof of fraud 

“But where insurers have both suspicion and proof of fraud, they will report that to An Garda Síochána.

Ken Murphy concurred that suspicions in relation to fraudulent claims should be reported but said insurance industry statistics, as revealed to the Oireachtas Finance Committee, show only about 1% are being reported.

“As Pearse Doherty said on 5 July, “the insurance industry is completely exaggerating the issue of fraudulent claims to try and justify the type of premiums they charge”.

Premium rates

He said the only two things are going up – premium rates and profits for insurers.

Ken Murphy said that the solicitors’ profession are supporters of PIAB. 

“The solicitor’s profession works very well with PIAB and actually got certain changes to PIAB as a result of court action.

Perspective

“I think it’s perfectly legitimate to urge that the perspective of accident victims should be heard in this debate.

“The innocent victims of the negligence of others have no organised voice unlike other powerful vested interests such as the defendants generally, their perspective should not be constantly ignored in this utterly one-sided public debate.”