Introduction of a Court of Appeal has seen insurance awards cut and claims dismissed, writes Caroline O’Doherty
IT’S the backlash that insurance companies and hard-pressed policy-holders have been demanding for more than 30 years.
Compensation payments are being cut, awards are being overturned and claims are being dismissed outright as the chancers and fraudsters finally get their comeuppance.
At last, those who look to milk an overly generous system by hyping up an injury to secure an easy cheque will think twice before practicing their limp and perfecting their sob story.
That’s certainly how it appears as the two-year-old Court of Appeal begins to make an impact and judges take a tougher line with claimants and the evidence they present.
But does this clampdown represent a real culture change or is it just a passing phase, and is it targetting the right people or is there a danger that scepticism will take the place of scrutiny and genuine claimants will be denied justice?
And will it make any difference to the ever-increasing insurance premiums that are crippling businesses, organisations and private citizens alike?
The clampdown is real, according to Liam Moloney, a Kildare-based solicitor who has specialised in personal injury cases for 20 years. “There has been a tightening up in the courts since the introduction of the Court of Appeal [in November 2014],” he says.
Prior to the creation of the dedicated Court of Appeal, if a defendant wanted to challenge an award or the scale of damages handed down in the High Court, they had to apply to the Supreme Court which had a four-year backlog of cases.
They had probably already spent four or more years waiting to get to the High Court in the first place so the option of appealing was understandably not at all appealing. Likewise, the delays in the High Court deterred appeals from the Circuit Court.
In its first full year of operation, the Court of Appeal got through 750 civil cases with an averaging waiting time of 10 months so it is making its presence felt.
“There have been a number of decisions from the Court of Appeal that have overturned awards dramatically, sometimes by 50%,” says Moloney. “What that has done is cause a significant reduction in awards for certain injuries in the High Court because judges now know what the Court of Appeal will do if the award they make is challenged.”
It’s not just the level of awards that has changed either. “The law of evidence in relation to personal injuries has been tightened up considerably,” he says.
“In contested liability cases fault has always been decided on the balance of probabilities — is it more likely that the defendant was at fault than wasn’t — so you just had to tip the balance over 50%.
“The law is still that you have to prove your case on the balance of probabilities but in my opinion the threshold isn’t as low as 51% any more.”
Moloney has no objection in principle to the tightening up of the process but he is concerned that some people may be unfairly squeezed.
“In relation to fraudulent and exaggerated claims, nobody wants that in their economy. It’s wrong and it should be stamped out but there is a fine line between what is fraudulent and what is someone’s legitimate right to pursue an action for compensation.
“Injuries can be quite subjective in nature. An injury to one person might be different to an injury to another person. A fit person can recover quickly enough but maybe somebody who isn’t as fit will be affected more.
“It’s also recognised that whiplash injuries take longer to recover in someone who has a pre-existing anxiety or depressive condition. So what might sound like exaggeration it might not be exaggeration at all.”
Cork-based solicitor Ernest Cantillon, whose firm has secured the biggest personal injuries pay-outs in Irish legal history, has similar concerns.
“There are, in every walk of life, those that will abuse the system but I think caution is required,” he says.
“If, for example, we had a drunk driver — who caused injury to an innocent person — complain that he did not want to pay the amount a court determined he should pay because he felt the claim was exaggerated, we would give no heed.
“Yet we have the representatives of the drunk drivers — the insurance industry — saying we want to keep as much money in our pockets to pay dividends to our shareholders, and we think that you should get less so that object of profitability can be obtained.
“Profitability for insurance companies is fine, but is it fine on the backs of paraplegics? The difficulty is that this debate is being led by the representatives of the wrong-doers, be it insurance companies or the State, and they have a vested interest in suggesting that claims are too high or exaggerated. There is no cohesive body representing the victims.”
Cantillon deplores the use of the term ‘compo culture’ and the perception that successful claimants are “all sunning themselves in the Caribbean like modern day Lotto winners”.
The reality for many, he says, is that they live in chronic pain, eking out their compensation to pay for carers to get them up in the morning.
“We see court reports frequently of judges dismissing claims because they are either false or exaggerated but these are very much in the minority, although they attract the greater level of publicity.
“In fact, the media campaign orchestrated by the insurance industry is so good at highlighting exaggerated claims, that genuine claimants are discouraged from bringing claims for genuine injuries, as they feel that they may be tarred with the same brush.
“We have people who come in to us with broken limbs, who have been injured in traffic accidents, and who have said to us expressly we don’t want to claim damages for our injury, we just want a claim for our financial losses — damage to our car or loss of earnings — because we don’t want to get the reputation of being part of the compensation culture.”
He says he only wishes as much emphasis was placed on accident prevention as fighting compensation.
“We see local authorities disclosing what sums they have paid out each year in claims. This is spun as if it is an example of avarice of the local population in sponging off their local authorities. It is nothing of the sort — it is merely a representation of countless examples of carelessness by local authorities.
“We look at it all the time as if the victim has done something wrong. I really think that we need to re-calibrate our focus and see there are people who are causing catastrophic damage.
“It drives me crazy that I’m paying my taxes and rates for the purposes of paying money to people who have been unnecessarily injured but no-one seems to be held accountable for not fencing off a hole that’s been dug and carelessly left open at the weekend for someone to fall into. We say the claimant is bad for breaking a leg. Why don’t we say, who left the hole unguarded?”
And don’t get him started on the backlash against whiplash. “Whiplashes are much maligned,” he says.
“I’m sure there are exaggerated whiplashes. But there are people who’ve had whiplash who will come in to you as if they’ve got a poker stuck up inside them. They are so stiff that they can’t move one way or another and you ask them what they think of it and they’ll tell you in no uncertain terms that it’s a debilitating illness.
“It is open to abuse but we often see the other side of it where people say they’re grand and they’re not grand at all. They minimise it because they just want to get on with things. There are undoubtedly exaggerated cases but there are people who underplay it as well.”
It’s true you don’t hear much about those who play down their suffering, probably because they’re drowned out by a constant refrain from the insurance industry railing against those go the opposite route.
Insurance Ireland, the industry’s representative body, repeatedly cries that insurance fraud costs the industry more than €200m every year.
There are also costs in terms of court time, Garda resources and the waste of emergency services when accidents are staged or hammed up, which is harder to quantify.
Insurance Ireland set up Insurance Confidential, a hotline for the public to spill the beans on people they knew to be faking injury or loss, and, since its establishment in 2003, it claims to have led to 9,000 cases of suspected fraud being reported and investigated.
InsuranceLink, a group of insurers, state bodies and some major employers, also formed to share information about claims they have received in the hope of catching out serial claimants and fraudsters.
And yet the number of claims has continued to rise. In 2015, the most recent year for which the Courts Service has figures, there were 18,992 new personal injury suits filed in total in the District, Circuit and High Court — a 7% increase on 2014.
Just 1,142 were filed in the District Court, which can deal with claims for up to €15,000 while 10,631 were filed in the Circuit Court, where awards can reach €60,000, and 7,219 went to the High Court where there is no official ceiling on payouts.
The highest amount awarded in the High Court in 2015 was €13.5m, but the lowest was €2,500 so it doesn’t always pay to aim high.
About half the total number filed was resolved in the same year, automatically creating a danger of worsening backlogs.
As Liam Moloney pointed out, the Court of Appeal is beginning to speed things up and, potentially, help weed out cases that should never go to court in the first place.
The greater willingness of defendants to make ‘Section 26 applications’ in recent times is also having an effect.
Section 26 is part of the Civil Liability and Courts Act 2004 and provides powers to allow judges dismiss a claim where it is found that a plaintiff gave false or misleading evidence.
It was greeted with some caution when first enacted, partly because there is an onus to prove the plaintiff knew the evidence was false or misleading which, in the case of exaggeration as opposed to outright lie, can be too subjective to conclusively assess.
Also, a dismissal may not be ordered under Section 26 if to do so would result in an injustice to the plaintiff. So where a plaintiff was genuinely injured and the defendant was at fault, but the plaintiff misled the court as to the extent of their suffering and loss, it would be considered unjust to throw out their entire claim.
And just to get to the point of making an application means getting to court and being prepared for the consequences if a judge rejects it so the case has already cost a lot of time and money and insurers may find it cheaper to just settle a claim.
Nevertheless, it does seem to be invoked more often lately, particularly in conjunction with greater use of surveillance video and photograph evidence obtained by private investigators employed to catch out those who lie about the extent of injuries.
But there’s still a view that because compensation payments are generous in Ireland and legal fees are high, it’s worth putting in a claim in the likelihood that insurers will often want to settle rather than risk more costly litigation.
“In terms of Europe we are quite generous,” says Liam Moloney. “Awards in England are about 50%-60% of what they are here. For an injury where you’d get about €16,000-€17,000 here, you’d probably get €7,000-€8000 in England.”
He believes the Injuries Board may actually be part of the problem in terms of the number of personal injury claims made, and their still fairly tortuous route through the courts.
The board has been spending between €250,000 and €330,000 annually on advertising and information campaigns in recent years.
“Isn’t it ironic that the body established to reduce costs associated with personal injury claims is of itself seeking people to lodge claims?” he says.
“Remember, the Injuries Board does not test evidence — it only evaluates the injury,” he adds. The implication is that people whose claim might not stand up to court scrutiny may be enticed to make one through the board that they would not otherwise chance.
The Injuries Board is also achieving acceptance rates of 20%-30% for the awards it makes so after going through the process, which is mandatory for personal injury claims, the vast majority of plaintiffs and defendants still want to go to court.
Personal injuries cases used to grab attention for the size of the awards paid out but recently they’ve been making headlines for the throw-out, not the pay-out.
One of the best known is from some time back, 2001, when Supermacs founder Pat McDonagh, fed up with the constant stream of spurious claims made against his chain of fast food restaurants, installed security cameras in the hand washing area of the toilets.
He famously captured footage of two men deliberately splashing water on the floor and one of them practicing sliding on it before lying down and pretending he’d fallen while his friend raised the alarm. The ‘injured party’ pretended to have been knocked out cold, was treated as a possible neck or spinal injury case and was taken by ambulance to hospital.
The footage has been much aired since it was presented in court where the subsequent claim for IR£30,000 in damages was speedily withdrawn after the plaintiffs heard their non-award-winning performance was to be replayed, and many business owners have followed Mr McDonagh’s example since.
The following are some more recent examples of cases dismissed by judges who were far from convinced that the claims made and circumstances described were genuine.
Even before the judge mentioned the goat, it was clear the only money Valerie Purcell was going to see out of her personal injury claim was the coin she said hit her in the leg after it was sent flying by a council lawnmower.
The 39-year-old Cork woman had sued Cork City Council for damages, claiming she was injured while sitting on a bench in her local park on a summer day in 2014 while grass-cutting was going on.
She said as it passed her by, the sit-on mower sent a one euro coin flying in her direction and that it hit her on the leg, leaving a circular imprint on her skin and resulting in a weakness that caused her to fall the next day, giving her back trouble for the next six months.
The judge was immediately sceptical, pondering aloud if the imprint had any cash value as in the fictional case of the cheque written on the back of a cow in order to frustrate the taxman.
By the time Judge Seán Ó Donnabháin asked if the council should perhaps employ a goat to graze public parks instead of risking using lawnmowers, it was no surprise he would declare the claim “fanciful” and move on to the next case.
Smoking is bad for you but lying about the effects of it can be even worse, as hotel guest Jason Platt discovered when he exaggerated injuries he said he received when he fell out of the hotel’s window while leaning out to have a cigarette after a day’s drinking.
Initially the High Court was inclined to accept that there was an inherent danger in the design of the window at the Old Bank House Hotel in Kinsale, although when the evidence of the plaintiff’s alcohol intake was presented, it was decided he was 40% responsible for the accident.
But when the extent of his injuries were challenged, his case fell apart completely. He had claimed his back was so severely damaged, there were days he could only move five feet from his bed to his sofa and couldn’t manage without crutches or a wheelchair at the best of times.
The hotel had surveillance footage of him not only managing fine without any supports but driving, grocery shopping, carrying heavy objects and moving about with ease. His €1.8m claim was dismissed in its entirety.
Three men who claimed to have back injuries after a rental car tipped their vehicle near Dublin Port were accused of making it up as they went along when their stories stretched credibility at Dublin Circuit Court.
Two of the three, all of whom were Pakistani nationals, had near identical medical reports which they could not explain. Claiming they feared for their lives and vomited with fright on the roadside did not stack up with the Garda investigation which established the incident as a low-impact tip that left a minor scratch on one car.
Two other men had withdrawn matching claims before the hearing and the remaining plaintiffs could not agree on where they had been sitting in the vehicle.
Hearing the case, which was for damages totalling €180,000, Judge Raymond Groarke said he couldn’t believe a word the plaintiffs said and rejected some of the more outlandish aspects as a “charade” before dismissing the entire claim.
A taxi driver reconsidered his position and withdrew his claim for €60,000 damages after his hearing revealed facts about his previous claims, forgery and suspicious insurance arrangements.
Stephen McAuley had claimed for a soft tissue injury he said he sustained when the car he was travelling in was hit by another car at a roundabout.
But while the 39-year-old Dubliner disclosed two previous accidents he had claimed for, the opposing insurers had found “many” more. He also failed to disclose that when he claimed for the theft of a brand new car the previous year, the claim was dismissed because his policy was voided by the fact that he lied to his insurers by forging a no-claims bonus.
Strangely enough, his car subsequently turned up again. Even stranger, the driver who allegedly struck him at the roundabout had only taken out insurance two weeks earlier and cancelled the policy two weeks later.
Judge James O’Donohoe told McAuley’s legal team that the plot “was thickening and there could be serious consequences for their client.” After a brief adjournment to consider the judge’s remarks, McAuley decided not to test that hypothesis and withdrew the claim.
A musician who claimed he could not play gigs for a year after falling into a moat when he stepped outside a Martello tower to relieve himself in the dark was filmed soon after on bongo drums and a trampoline.
Philippe Clark from Kilmanagh, Co Kilkenny, claimed he injured his groin and shoulder in the fall while taking part in rehearsals at the private venue.
While conceding he had exited the door and turned left into the garden instead of right to the toilet as instructed, he said he had done so to admire the sea view but the area should have been better lit to enable him see the edge of the one-metre-deep dry moat.
Evidence was produced that he had been to the venue in daylight previously so would have seen the moat, and that he was active — on bongo drums and trampoline — shortly after the accident.
It was also claimed he initially took responsibility for the fall, explaining he had been “spinning around looking at the stars”. His claim was dismissed.
A lorry driver awarded €12,500 in a traffic accident claim against his wife had the money seized less than an hour later to pay legal fees when he lost a claim against another driver for another apparent accident.
Ireneusz Larus’s two cases came before different Circuit Court judges on the same morning, the first arising out of a claim that he was hurt as a passenger in his wife’s car when she hit a wall after swerving to avoid a cyclist.
He accepted a €12,500 settlement offer, but saw it frozen less than an hour later when his claim to have been injured when he had to swerve into a kerb to avoid a lorry that had encroached on his lane was dismissed.
The court heard he had sought to recover the cost of repairs to his car despite evidence that there was no damage to the vehicle and that not even the tyres were scuffed. There was also a discrepancy between his sworn statement to the court and accounts he gave to two doctors over whether or not he had received physiotherapy.
Judge Jacqueline Linnane threw out the case and got an undertaking from Mr Larus’s solicitor that when the cheque issued from the earlier case, it would not be passed on to the plaintiff.
A nightclub reveller who climbed up on to a fellow clubber’s shoulders and then fell off when he stumbled, tried unsuccessfully to sue the venue for causing her injuries by allowing her human climbing frame to get drunk and unsteady on his feet and for failing to properly supervise the behaviour of clientele.
Tasha Fitzsimons took the Barcode nightclub in Clontarf, Dublin to the High Court for a cut she sustained to her forehead and a fracture to her left elbow in the fall from the man who was not a party to the proceedings.
The court considered her claim in detail, and conducted much analysis on the duty of care venue management have towards their customers, before deciding that, in this case, to find the nightclub negligent in not monitoring the actions of every patron at every moment would be one step too far.
Two in-laws who sought damages for neck injuries they claimed they suffered when the car in which they were passengers rear-ended another car were sent packing after a doctor told the court said the ‘crash’ was like bumper cars coming into contact at a fairground.
Eileen Ward and Charlie Ward were suing Mr Ward’s wife’s insurers at Letterkenny Circuit Court when the doctor’s damning report emerged. The court also heard the student whose car had been rear-ended as he was stopped at traffic lights had suffered no injuries at all and only had to have repairs done to his tow bar, which cost him just €100 and for which he made no claim. The judge threw out the case.
A student who had to wear runners to her debs after injuring her ankle in a slip while playing hockey took her school to the High Court claiming the ground was slippy and poorly lit. The judge dismissed the case, saying: “Strange as it may seem, accidents can happen where ‘somebody else’ is not to blame.”
IT SOUNDS too good to be true but the would-be insurance fraudster who instagrams or tweets a picture of themselves parasailing in Lanzarote while ‘crippled’ with a back injury is no urban myth.
“Facebook is brilliant,” says one Cork-based private investigator. “Some people just can’t resist showing off what a great time they’re having even if they’re supposed to be in such a bad way they can never leave the house.”
The private investigator, who asked not to be named, has one such case currently on his files. A woman claimed to be badly hurt at a tourist facility but she had a physically demanding hobby and just couldn’t stay away from it.
“I heard she was back with her club but it took me three months to get the proof. But eventually, sure enough, there was a big gala event and there she was doing a star turn at it. I filmed it but then she put it up on Facebook too.”
Photographs and video recorded live or copied from social media sites are now common tools used by insurers to defend claims and discredit claimants.
The main insurance companies have private investigators working full-time for them while those such as the Cork practitioner are often employed by policyholders who are unhappy that their insurer wants to settle a claim that they believe could be successfully defended.
“We have another case of a lady who said she hurt herself at a hotel. Staff saw her walking around fine afterwards but she put on a limp and made a complaint the next day and said she was leaving and booking into another hotel but this was all orchestrated.
“We checked the CCTV in the new hotel and she was strutting around in her six-inch heels not a bother on her. What’s interesting is that the insurer wanted to settle but the policy said the hotel had a say in whether a claim was settled up to a certain value so it’s worth reading the small print.”
Private investigations don’t even need to be particularly covert to gather evidence. “The Data Protection Act is a big thing now. People think, you can’t do this to me and you can’t do that but if they’re in a public place you can take photographs.
“If you’re investigating insurance claims and they’re meant to be crippled and they’re mountain biking or running around The Lough here in Cork, you’re quite entitled to take photographs of that.
“Most insurance companies will pay out up to about €30,000 without questioning because it would cost them more to defend it in the courts but if they used private investigators routinely, it would never get to court.
“I know you think, he would say that, wouldn’t he, but if you had a claim in and it wasn’t genuine and you had to watch your every move, you could be putting your life on hold until the claim is settled which could take, in the district court, up to two years, and if it’s the High Court it could take four years.
“If you’re prepared to take the chance with a false claim, put your life on hold for it and say I can’t go on holiday, I can’t go to the gym, I can’t do things with my kids, then maybe you think it’s worth it but it’s something you have to weigh up very carefully.”
YOU can’t put a price on a life, so the saying goes, but agreeing the cost of a life blighted by pain and suffering, even temporarily, is not much easier.
In personal injuries cases, claimants generally seek compensation in the form of both general damages and special damages, the former for the pain and suffering the injury caused and/or continues to cause them and the latter for the out of pocket expenses they have incurred and will incur, plus loss of earnings to date and/or into the future.
A bit of guesswork is involved in the latter because it’s hard to predict the future and how financially successful the plaintiff would have been in terms of career advancement if they weren’t held back by injury.
But the maths is much less emotive than when the calculators come out to tot up general damages.
A landmark appeal to the Supreme Court in 1984 illustrates the problem. A young man left paraplegic in an accident was awarded IR£800,000 in general damages by a jury clearly sympathetic to his plight.
On appeal, however, the Supreme Court reduced the award drastically to £150,000, ruling that general damages should not be punitive and should take into account the impact on wider society.
Chief Justice O’Higgins stated in his judgement: “Since money cannot possibly compensate [for quadriplegia], a jury may question whether it matters what sum is awarded.
“The answer must be that it does matter. It matters to the defendant or his indemnifiers, and would be a ground for legitimate complaint if the sum awarded were so high as to constitute a punishment... rather than... an attempt to compensate the injured.
“It also matters to contemporary society if, by reason of the amount decided upon and the example it sets for other determinations of damages by juries, the operation of public policy would be thereby endangered.”
The sum of IR£150,000 was widely viewed as a cap on general damages which future awards should not exceed. But fairly quickly, the cap was tossed away and awards for similar and lesser injuries rose and, in 1988, legislation was passed to remove juries from personal injury cases, leaving them in what was considered the more objective hands of judges alone.
Judges needed guidance, however — particularly when they tended to recoil from the notion of involving wider society in their decisions - and with the establishment of the Injuries Board in 2004, came a Book of Quantum, updated last year, which set out in detail the sums considered reasonable to compensate for any one of hundreds of different injuries to just about every part of the body.
While the book was meant primarily for use by the out-of-court Injuries Board assessors, it was presumed it would have a knock-on effect on awards in cases.
THE latest focus on the costs of personal injury claims is just that — the latest in a long line of crusades.
In 1962, then minister for justice, Charles Haughey, set up the Committee on Court Practice and Procedure to, among other things, “inquire into the operation of the courts and to consider whether the cost of litigation could be reduced”.
Fast forward to 1986 and an Oireachtas committee headed by then Fine Gael deputy, Ivan Yates, produced a report seeking urgent action on the problem, which he said was strangling small businesses. Its main recommendation was to provide an alternative to the courts for settling claims.
In 1996, Pat Rabbitte, then a Democratic Left junior minister, commissioned an independent report from consultants, Deloitte and Touche, which chronicled similar problems and made similar recommendations.
That led to another report, in 1997, jointly compiled by the unions, employers, and government departments. This concluded that an independent personal injuries tribunal should be set up.
By then, the term ‘compo culture’ was embedded in public and political debate and feelings were running high, as evidenced by the statement of then minister for defence, Michael Smith.
“We have to strongly attack the compensation culture, which is eating at the heart of our society and which has the potential to cause grievous harm to our economy,” he warned.
“To put it very simply. If compensation is to be paid out to somebody for every one of life’s little mishaps, the cost will eventually make the State economically uninhabitable.”
Smith was dealing with the army deafness claims — which would go on to cost the State €290m — so his alarm was understandable.
Arguably, it was also justifiable. In 1986, when Ivan Yates called for urgent action, lititgation costs were about 15% the cost of insurance claims. By 1996, when Pat Rabbitte was doing the same, the figure was 25%. By the time then minister for enterprise, Mary Harney, tried to reign in costs, they had risen to 42%.
Her department headed up the government’s Insurance Reform Programme, one aspect of which was the establishment, in 2004, of the Personal Injuries Assessment Board. The aim was to provide a court-free, lawyer-free procedure for claimants and defendants, and their insurers, to settle claims in a cheaper, faster way.
The very fact that, last year, the latest government set up a Working Group on the Cost of Insurance, shows it didn’t have quite the desired effect.
The working group published its first report in January, looking specifically at motor insurance, and called for the setting up of a Personal Injuries Commission to examine the whole area.
Mr Justice Nicholas Kearns has been appointed chair and is due to report back in the middle of 2018.
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