Committee urges probe into legal fees
The call comes as recent figures revealed that of the €6.5bn paid out in insurance claims in the last five years, €1.3bn consisted of legal fees.
In its interim report on reforms to the Irish insurance market, released yesterday, the Joint Committee on Enterprise and Small Business recommended the Government hold an inquiry into whether legal fees are reasonable for the work done by solicitors.
The Taxing Master, who decides how much solicitors should be paid for their work, should never have been a member of the legal profession and should be made subject to an appeals body, the report added.
Yesterday’s report was highly critical of the insurance industry and suggested it had not provided satisfactory explanations for increasing hikes in insurance premiums.
Continued criticism of the insurance industry was compounded in recent days following the publication of motor insurance profits of more than €160m last year.
Speaking at the launch of the report, committee chairman Donie Cassidy demanded clear answers from the industry. “The joint committee is not happy with the explanations it received to justify the level of increases that have taken place. The joint committee does not believe it has been told the whole story,” he said.
However, the Irish Insurance Federation rejected the claim, saying the cost of motor insurance was falling while the cost of liability insurance would improve as soon as the Government followed through on promised measures such as anti-fraud legislation promised in the Civil Liability and Courts Bill to be published in the autumn.
One of the principal and widely publicised recommendations of yesterday’s report calls for the 2% Government levy on insurance premiums to be abolished.
Prominent among the other 40 conclusions drawn by the committee is the need for immediate legislation for the regulation of driving schools, the establishment of the promised dedicated Garda traffic corps and an annual review of the insurance market.
The committee also called for uninsured vehicles to be confiscated.
Another far-reaching recommendation calls for awards in Irish courts to be examined and compared to those in other countries in order to produce guidelines for judges.
Mr Cassidy said the committee wanted the measures recommended in the report implemented by January 2004 so the benefits could be available to policy holders next year.
“From insurance companies, we want substantial premium reductions. The joint committee will continue its work until this is achieved,” he said.
