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68% of settlements in 2023 through litigation

A Central Bank report has highlighted that a significant number of injury claims are being settled through litigation rather than the State’s Injuries Resolution Board.

According to the report, 68% of settlements in 2023 were made through litigation, despite higher legal costs.

Key findings include:

• Average cost of legal fees for cases settled through litigation was €23,000, compared to €1,000 for cases handled by the Injuries Board,
• While the personal liability injury settlement cost remained consistent at €23,000 for claims under €150,000, the costs associated with litigation were higher due to the legal fees involved.

The Alliance for Insurance Reform lobby group expressed concerns that the excessive use of litigation is driving up insurance costs for businesses.

Grocery store own Flora Crowe, a member of the Alliance, said that too few cases are being resolved through the Injuries Board, which is intended to be a less costly route for claimants.

Moyagh Murdock, chief executive of Insurance Ireland, said that the full impact of the Personal Injury Guidelines is yet to be realised due to the low number of claims settled under those guidelines.

Concerns

She also raised concerns about the potential for an increase in awards following a recommendation from the Judicial Council to raise them by 16.7%.

The report noted that public liability claims have risen by almost 40% from 2019 to 2023, and the overall cost of employer's liability, public liability, and commercial property insurance claims in 2023 was estimated to be €630 million.

Although the number of claims has decreased from 50,600 in 2009 to 31,500 in 2023, the cost per claim has risen significantly.

Insurance Ireland's Michael Horan said on Morning Ireland that, while the Injuries Resolution Board is designed to reduce legal costs, too many claims are still being pursued through litigation, resulting in long delays and high costs.

Litigation should be the exception, not the norm, he said, and expressed concerns about the potential negative impact of increased personal injury awards if the Judicial Council’s recommendations are implemented.