A spokesperson for Insurance Ireland has rejected an accusation by a senior judge that the insurance industry in Ireland is “fundamentally dishonest”.
Declan Jackson, director of Government Affairs with Insurance Ireland said that the judge’s comments don't tally with the industry’s understanding of information published by the Court Service “which shows that we do have a serious problem with our cost of claims.”
Speaking on RTÉ Radio’sshow, Mr Jackson added “if we look at Court Service annual reports for the District and the Circuit courts, there has been five per cent claims inflation each year since 2015.
“Yes there has been some abatement in the higher court, but in relation to Ireland and the Personal Injuries Commission, who actually support this view also, we have a big problem in relation to low value, relatively, under €35,000, high volume personal injury claims and that's something we've been working on for the last four years, to get reform on.”
Recently in a report inMr Justice Kevin Cross said that Ireland’s ‘compo culture’ and fraudulent claims are responsible for a rise in insurance premiums.
The judge who heads up the personal injuries section of the High Court, has presided over a number of recent high-profile medical negligence and personal injury actions, said:
For anyone to blame the so-called ‘compo culture’ and general damages, which are awarded to innocent injured plaintiffs, for the huge level of premium increases defies belief; yet this explanation from a vested interest group has been taken on board and trotted out unquestioned by some commentators.
Mr Justice Cross added that the “insurance industry should be vigilant in reporting to the Gardaí any claims they believe to be fraudulent, but the number of claims reported have been tiny".
Therefore it is fundamentally dishonest to blame supposedly fraudulent claims for the cost of insurance
Mr Jackson toldthat Insurance Ireland was “delighted” with the forthcoming Judicial Council Bill, “we're just awaiting the commencement of that to recalibrate awards.
“The last time we had reform of our claims cost system in this country was in 2004 with the introduction of the Personal Injuries Assessment Board and we've had no reform for the last 15 years.
We clearly need reform. That's accepted by the Oireachtas who passed the legislation, it's accepted by Minister D'Arcy and it's accepted even by the Taoiseach and we have a way of doing that.
However, the Director General of the Law Society, Ken Murphy claimed that Mr Justice Cross, in his comments, was not referring to the legal profession, he was talking about the insurance industry itself.
“He's in charge of the personal injury list in the High Court, he knows his way around this, he largely does medical negligence cases and it was in that context he was talking.
"But he does say that claiming that 'compo culture' and fraudulent claims are responsible for the rise in insurance premiums is just incredible.
“He's not the only person who says that this defies belief. We had Pearse Doherty from Sinn Féin in a very, very forensic cross examination of insurers at the Oireachtas Finance Committee - where the video of that has been viewed half a million times, he forensically destroyed the credibility of the argument that was being put forward in relation to fraudulent claims.”
Mr Murphy also claimed that the Minister for Justice, Charlie Flanagan has also been highly critical and supportive Mr Doherty’s analysis “and doesn't believe a lot of the assertions by the insurance industry. Minister Michael D'Arcy is of the same view, he has talked about the low level of trust he has in the insurance industry.”
There is a lot of criticism of the insurance industry, he said.
Not only that, but there are three major inquiries into the insurance industry in Ireland at the moment, the European Commission is investigating suspicions of breaches of Competition Law, the Irish Consumer and Competition commission is investigating, the Central Bank most recently is investigating differential pricing.
“That’s a lot of questions which, frankly, most commentators who've gone into this don't believe the insurance industry is answering or capable of answering.”
Mr Murphy said that any level of fraudulent claims is too much and disputed the correct levels of fraudulent claims.
In response Mr Jackson said there was “a lot of loose talk” and pointed out that according to gardaí the number of fraudulent claims reported was 230-258 in the last “two to three years” while in the UK the insurance fraud investigation unit deals with 380 cases a year.
“That's for a population about ten times our size. So insurers will fight fraud, they are fighting fraud, we have always said the key issue driving that volatility is the cost of claims.”
Last July, Michael D’Arcy, the Minister of State with responsibility for the insurance sector, called on the legal profession to warn its members that fraudulent cases will not be tolerated. He said solicitors should be vigilant about the cases they take on and judges should be encouraged to speak out about cases that come before them.
His comments come after a circuit court judge had said that solicitors who handle cases which involve staged accidents or exaggerated claims may be contributing to fraudulent personal injury claims.
Also in July, Deputy commissioner John Twomey told an Oireachtas Committee that 3% of garda fraud investigations relate to bogus or exaggerated insurance claims.
In a breakdown of the activity of the Garda National Economic Crime Bureau, he said it had about 50 live insurance investigations since October 2018, out of a total caseload of approximately 1,500.