‘Runaway train’ scenario if compo claims culture is not addressed

People will feel like they are dealing with a “runaway train” if the opportunity to sort out the compensation claims crisis is missed, a senior judge has warned.

The Personal Injuries Commission found personal compensation payments for soft tissue injuries in Ireland are running at 4.4 times higher than those in Britain.

Commission chairman Mr Justice Nicholas Kearns admitted that, over the years, compensation awards had “got out of hand”.

A key recommendation in the commission’s report is that the Judicial Council compiles guidelines for personal injury awards. The Government is confident that proposed legislation establishing the council will be passed by the end of the year.

Mr Justice Kearns said asking the council to compile guidelines for personal injury awards was the best approach to take.

“Judges don’t like being told what to do, and certainly the commission is not telling judges to slash awards or anything of that sort,” he said. However, he said, different judges took different approaches and that was part of the problem.

“They occasionally take very different views as to what is an appropriate sum and there can be a lot of discrepancies that cause a great deal of confusion and mystification to the public,” said Mr Justice Kearns.

If guidelines were successful in ensuring consistency in awards the need to consider legislation to cap damages would not arise.

“The worst possible outcome would be if this opportunity cannot be availed of in some practical and pragmatic way and people are left feeling the same level of helplessness — that we are dealing with a runaway train here that nobody seems to be able to bring under control,” said the judge.

The commission has also recommended that in cases where an insurer deals directly with a claimant, no offer should be made unless and until a medical report has been obtained.

The Personal Injuries Commission was established in 2017. Members of the commission included representatives from the Bar Council, the Law Society, and Insurance Ireland.

Insurance Ireland chief executive Kevin Thompson said Ireland’s personal injury compensation awards were dramatically out of kilter internationally.

He said eight out of 10 claims here are for soft tissue and compensation awards continued to spiral, whereas legislation is being brought in to cap them in Britain.

However, the Law Society said reducing damages might only benefit the insurance industry and do harm to those who have suffered injury. Director general Ken Murphy said there was no evidence that reducing the level of compensation awarded to victims would result in premiums going down.

“We must avoid a situation where injury victims end up in a poorer position while insurance companies keep getting richer,” he said.