Insurance premiums will continue to soar if ‘excessive’ injury claims not tackled

Hefty payouts drive up cost of policies

Consumers face higher insurance prices if “excessive” personal injury payouts — sometimes three times higher than those in England and Wales for similar injuries — are not tackled, a business group has warned.

Employers body Ibec said “excessive judicial awards and a litigation culture” were feeding into higher consumer prices, and even minor accidents were increasingly prompting compensation claims.

At the launch of its report, Time to Reduce the Burden of Personal Injury Claims, it said even when liability is not contested, those claims often lead to unnecessary, costly court cases.

In Ireland, courts are guided to award between €16,000 and €35,000 for an ankle fracture, whereas courts in England and Wales can only award up to a maximum amount of €14,000 for a similar injury.

In terms of a leg fracture, courts here are guided to award between €20,000 and €35,000 for that personal injury according to the 2004 Book of Quantum. In England and Wales the award is marked between €7,500 and €14,000.

Awards for a finger fracture also vary greatly between the two neighbouring jurisdictions. In Ireland, the Book of Quantum recommends an award of between €13,000 and €19,000 for a finger fracture, but in England and Wales the recommendation is for between €1,000 and €5,000.

A second Book of Quantum has been commissioned here by the Personal Injuries Assesment Board (PIAB) and is due to be published before the end of this year.

Among a number of recommendations by Ibec to tackle the growing trend of litigation for injury claims is that solicitors who represent claimants should adopt a voluntary code of practice “to prevent court proceedings from being dragged out unnecessarily”.

Ibec also called on insurers to publish more detailed information on personal injury cases that they settle, as well as any other factors that may be driving up premiums.

Ibec surveyed its members as part of the report and found that insurance premiums, for employer liability, had gone up by 13% between 2011 and 2015.

This increase is despite the number of accidents being reported decreasing by 5%.

Insurance premiums for public liability went up by 12.5% in this same five-year period, for Ibec’s members. Again this increase is in spite of accidents and claims falling by half.

“There is an increasing trend to litigate on injury claims. This is pushing up costs and proving to be a very significant burden on many businesses,” said Dr Neil Walker, Ibec’s head of infrastructure.

“Minor accidents are increasingly prompting compensation claims. And even when liability is not contested, those claims often lead to unnecessary, costly court cases.

“This is because compensation awards in court tend to be higher than what is recommended by the Personal Injuries Assessment Board,” Dr Walker added.

“The figure has remained stable for the past seven years,” said the board’s chief executive Conor O’Brien.

In relation to motor insurance, the average cost has risen by a third in a year, according to the Society of the Irish Motor Industry (Simi). Earlier this month Mairead McGuinness MEP confirmed that the EU Commission is to review insurance companies that are not rewarding motorists with good driving histories.

“In the area of car insurance, premiums should be reduced if the driver has a low-incident or accident-free driving record,” she said.

Ibec’s research comes after a report in the Irish Examiner yesterday linking economic growth with a 6% rise in claims by people seeking compensation for personal injuries in 2015.

PIAB recorded 33,561 applications last year, in relation to injuries sustained in motor, workplace, and public-liability accidents.

However, the level of the award has remained stable, with just a 1% increase in 2015 to €22,878 in each successful case.

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