Injuries board could save State €350m

THE Personal Injuries Assessment Board said yesterday it could achieve savings of almost €350m each year by bypassing expensive litigation costs.

The PIAB told the Oireachtas Committee on Enterprise that in 2004, almost €1 billion was the total cost of compensation for personal injury claims. However, the litigation costs incurred amounted to €444m because claims were pursued through litigation.

However, since its inception last year, the PIAB's administration costs have accounted for just 10% of claims, compared to 46% for litigation. On the basis of those figures, its costs would have been €97m last year, producing a saving to the State of €347m.

PIAB chairperson Dorothea Dowling and chief executive Patricia Byron, both portrayed it as a huge culture change and phenomenal turnaround.

So far, it has made 520 awards. It says that final settlement is achieved three times faster and four times cheaper than claims settled through the courts.

Though the amounts paid in compensation have remained the same, Ms Dowling said that the real savings have come by the elimination of lawyers' fees.

To date, the PIAB has paid out awards totalling €3.7m. Its costs for those have been a little over €300,000 (or 8.7%) compared to the estimated €1.7m (or 46%) that lawyers would have charged.

Ms Byron said that in January and July last year 14,000 writs were issued.

However, since the PIAB was established there has been a radical change. The board has received 15,500 cases so far.

In contrast, only 404 writs have been issued in the High Court to the end of September this year, compared to 15,293 for the whole of 2004. However, 2,500 of the cases were deemed after initial assessment to be more appropriate for the courts.

Phil Hogan of Fine Gael questioned if it was "all gain and no pain." He said that, while evidence showed motor premiums were coming down in price, there did not seem to be similar cuts in liability insurance for occupiers and employers.

Labour's Brendan Howlin queried why the PIAB was setting a 10% of claims cost for administrative cost. He said it seemed to him that it should come because of a fixed fee.

Ms Dowling said that lawyers still represented some clients processing their claims through the PIAB. While not wishing to undermine the solicitor/client relationship, she wondered why a statutory independent body like the PIAB was barred from contacting claimants.

She said that she would like the PIAB to be in a position to "give people options" in this regard.