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PI guidelines’ effect ‘limited’ so far – database

The Central Bank has published figures on the cost of insurance claims under employers’ liability and public liability for the first half (H1) of 2022.

The Central Bank is responsible for collecting data for the National Claims Information Database (NCID), which stores information on the cost of non-life insurance claims.

This is the first time the NCID has published a mid-year report, and the figures include information on claims settled under the Personal Injuries Guidelines (the guidelines), which took effect in April 2021.

The report says that the overall effect of the guidelines so far has been limited, as more than 70% of injury claims were settled through litigation in the six-month period.

Only 3% of such claims were settled under the guidelines in 2021 and H1 2022. This is because of the long period between the reporting of an accident and the settling of a claim through the courts – an average of 5.2 years in the period under review.

Fall in number of claims

Injury claims accounted for 95% of the total costs of settled claims in H1 2022, and 66% of claim numbers.

The number of injury claims in the six-month period was down 25% compared with the average from 2015 to 2019, which the NCID figures use as a comparison due to the effect of COVID-19 restrictions during 2020 and 2021.

This led to a 12% fall in the total cost of injury claims compared with the 2015-2019 average.

The average cost of injury claims settled directly was down by 1%, according to the figures, while the cost of those settled through the Personal Injuries Assessment Board (PIAB) fell by 20%.

The average cost of litigated injury claims, however, rose by 3%.

Litigation ‘relatively stable’

The report says that the number of claims being settled through litigation has remained relatively stable since 2015, while the numbers settled directly or through PIAB have fallen sharply.

The figures show that 22% of all injury claims settled in H1 2022 across all channels settled under the new guidelines, while the remaining 78% had compensation amounts determined using the Book of Quantum.

Two-thirds of claimants that settled directly during the six-month period used the guidelines, while 85% of those settling through PIAB used the guidelines.

“This contrasts with the litigated channel, which made up 71% of all injury claims in H1 2022, where only 3% of claims have settled under the guidelines,” the NCID report says.

It points out, however, that only a small number of litigated claims have had time to settle before 30 June 2022, the cut-off date for the latest data.

Guidelines’ impact

To assess the impact of the guidelines on the cost of claims, the NCID used a comparison with 2020, when claims were settled using the Book of Quantum.

For claims that settled under the guidelines in H1 2022, the average cost was 37% lower for claims that settled directly, and 54% lower for claims settling directly after PIAB, and 35% lower for claims settling through PIAB.

Average compensation figures for injury claims in H1 2022 were:

• €18,671 (direct),
• €23,464 (PIAB), and
• €51,078 (litigation).

Average legal costs in litigated settlements were €31,375, compared with €4,171 (direct) and €1,439 (PIAB).

‘Duty of care’

The database was set up under the Central Bank (National Claims Information Database) Act 2018 in a move aimed at improving transparency on the cost of settling claims.

Jennifer Carroll MacNeill (Minister of State for financial services, credit unions and insurance) said that she expected recent changes in legislation on ‘duty of care’ to “significantly impact” claims in employers’ and public-liability insurance.

“I have written to the CEOs of the major insurance companies in Ireland, and I will meet them to discuss their plans to reflect this legal change in the premiums they offer to the business community in Ireland,” she stated.