Judges have been urged to slash generous personal injury awards after a new report says there is no legal barrier to tackling ‘paracetamol injury’ compo claims.
Whiplash compensation payouts are nearly four and a half times higher in Ireland than England, according to the Alliance for Insurance Reform.
A new report by the independent Law Reform Commission of Ireland, which reviews Irish law, has said the Government does not need to hold a referendum to cap payouts in personal injury claims.
Peter Boland, director of Alliance for Insurance Reform Ireland, said the country is in an insurance crisis.
He told RTE Radio One: “The issue has always been about general damages for minor injuries where we’re awarding for paracetamol injuries, bruises that take a couple of paracetamol and a good night’s sleep to sort out.
“We’re awarding around the 20 grand mark for many of those, as well as being eye-watering, it’s not sustainable.”
But Stuart Gilhooly, former president of the Law Society of Ireland, said he believes that the insurance industry will not reduce premiums significantly if a cap is placed on damages for personal injury claims.
He said: “There’s an underlying assumption which has been made about the cost of insurance and if you clampdown and reduce damages the cost of insurance will drop, that doesn’t necessarily follow at all.
“We’ve seen over the years that the insurance industry will find any excuse to increase the level of premiums. If you reduce damages, they’ll find another excuse to increase premiums.”
The LRC did not examine anything related to insurance awards, only if it was “constitutionally permissible to legislate for capping general damages
in personal injuries cases.”
It would be the responsibility of the Government, with advice from others including the Attorney General, to legislate for it.
Mr Gilhooly added: “The insurers have no shame, they’ve never had any shame.
“They’ve been making absolutely monumental profits, hundreds of millions for the last couple of years and they haven’t reduced premiums.
“What this is all about is reducing damages so they can increase their profits and give a tiny amount back in premiums.
“It’s all about increasing their profits, increasing profits for shareholders.”
Linda Murray, owner of Huckleberry’s Den soft play area in Navan, Co Meath, and a member of the AIR, said the cost of insurance is killing small businesses.
“Nobody in the Alliance is disputing where somebody is genuinely injured that they should be compensated,” she said.
“We’re talking mostly here about the minor injuries. We’re talking about coming into a play centre, going into a pub or restaurant and something small happening which isn’t necessarily the business owners fault and being compensated way too much for that.”
Ms Murray said she pays an insurance premium of e22,000.
New guidelines on general damages are due to go before the Judicial Council, which is made up of judges and oversees standards in Irish law, by October 28.
Paul Redmond, chief executive of the Car Rental Council,which represents the car rental industry, said: “A committee of the Judicial Council is set to recommend revised guidelines for minor injury awards before the end of October.
“We urge them to ensure these guidelines are drastically lower than the current quantum and urge the Judicial Council to ensure they are implemented as a matter of urgency.”
Sinn Fein TD Pearse Doherty, who has been tirelessly pushing for insurance reform, said: “We now need to see the Personal Injury Guidelines published and implemented by the courts as soon as possible.
“Insurance reform cannot wait.”
