Compo cap may be left to public vote

If laws cannot be introduced to cap injury awards, the Government will hold a referendum to bring about the change, the minister in charge of insurance reform has warned.

Compo cap may be left to public vote

If laws cannot be introduced to cap injury awards, the Government will hold a referendum to bring about the change, the minister in charge of insurance reform has warned.

In an interview with the Irish Examiner, junior finance minister Michael D’Arcy called on the judiciary to overhaul injury award guidelines in order to halt the insurance crisis.

Mr D’Arcy said that if judges fail to reduce awards, the Government will use powers to bypass the courts and cap claim levels.

Recently, childcare facilities, cafes, and restaurants warned they are facing closure due to soaring premiums.

Insurers say high premium costs are a result of expensive award claims and subsequent payouts.

A new judicial council has been charged with adjusting personal injury award levels but does not have to report until next August or possibly September.

Mr D’Arcy said he hoped the book of quantum for award levels would be replaced by judge-led guidelines and “insurance companies would have nowhere to hide in relation to premiums”.

“The moment the guideline [payouts] are reduced, the insurance companies will follow suit,” he said.

However, a Law Reform Commission report suggested that TDs could dictate levels of compensation for injuries. The Attorney General will assess a report on this by May.

“Maybe the Oireachtas has the power to cap awards,” said Mr D’Arcy. “If that is the case and the judiciary structure we have in place doesn’t work, that is a legitimate option.

"I’m not afraid to take that option.”

Legal advice may suggest this could be unconstitutional. In that case, Mr D’Arcy and Taoiseach Leo Varadkar have agreed that the ‘nuclear option’ of calling a referendum would be used.

“If the Attorney General’s advice is that it’s not constitutional for the Oireachtas to set the awards, we go with a referendum, a referendum to the people,” said Mr D’Arcy.

“I would anticipate the question would be to give the Oireachtas the authority to cap the awards for personal injury. And so the State will be setting those awards for the first time.

It’s not the path where I want to [go]. I’m hopeful the judiciary will get it right.

Mr D’Arcy’s previously said judges would select the five most common types of injury claims and issue award guidelines by March, which triggered a backlash from the highest-ranking judge in the country.

In a stinging rebuke, Chief Justice Frank Clarke said there was no basis for such suggestions as he stressed the independence of the judiciary.

Furthermore, the judge said, there was nothing to suggest payouts would reduce by more than 15% or 20%, as the minister had suggested.

Mr D’Arcy admitted to the Irish Examiner that “they [the judges] were very displeased with my comments in relation to what I’ve been saying for months and months”. He also reiterated that he hoped injury award levels would be capped quickly.

“I don’t think from listening to justice comments... I don’t think they’re going to delay matters,” he said.

“I have to believe that they’ll move the matters quickly.

“If you can get €19,000 for a sprained finger, there’s something wrong there. And there’s that opportunity for easy money that some people take that are just driving up the awards.”

Mr D’Arcy also hit out at the legal profession for the cost of litigation when compensation claims end up in court.

“The litigation fees are outrageous,” he said.

“I’m putting pressure on the lawyers who are making a very handsome living out of this as well.

"And I’m also putting the pressure on those who participate in the claims culture in Ireland.”

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