Fears personal injury awards for minor injuries will not cover medical costs due to inflation

Solicitors are calling for a review of personal injury awards in light of cost-of-living crisis as inflation increases
Fears personal injury awards for minor injuries will not cover medical costs due to inflation

In some recent cases out-of-pocket expenses, such as the cost of medical visits and care, by those who are claiming damages for minor injury have exceeded the award. File photo: iStock

Judicial guidelines which brought in lower personal injury awards for minor injuries should be revisited in the light of the cost-of-living crisis, leading solicitors have claimed.

The call comes as one solicitor said there is “a palpable sense of worry” among those suing over personal injuries sustained in accidents that the compensation will not even cover the cost of ongoing medical treatments and expenses as inflation increases.

And in some recent cases out-of-pocket expenses, such as the cost of medical visits and care, by those who are claiming damages for minor injury have exceeded the award.

Awards by the Personal Injuries Assessment Board (PIAB) under the new guidelines introduced last year for what are regarded as minor cases, such as whiplash injuries and soft tissue injuries due to slip and falls, are reported to have been slashed by about 50%, and in some instances 70%, on previous assessments under the old guidelines*.

A whiplash injury from a road traffic accident which would have previously seen an award of around €15,000 is now likely to be less than €4,000. 

In one case two brothers who suffered similar minor injuries in a motor accident had their claims assessed by PIAB. One brother had his claim assessed under the old guidelines and he was awarded €18,000 in March 2021. Three months later when the new guidelines were in operation, his brother whose case had been slower going through the system because it was awaiting a medical report ended up with an award of €4,000.

'Palpable sense of worry'

Cork solicitor, William Harvey of Martin A Harvey & Co solicitors, which deal with a high volume of personal injury claims said the new guidelines were expected to be reviewed every three years by the Judicial Council, but he said due to the rise in inflation, this should happen sooner.

He said it is rare in minor cases, as can happen to those suing over catastrophic injuries, to have interim payouts to cover medical and other expenses before a case is finalised.

“There is a palpable sense of worry now among plaintiffs,” he said and backed a call for a review of the guidelines before the planned evaluation in 2024.

Kildare solicitor Liam Moloney who handles personal injuries cases said compensation awards here are now on a par or lower than Spain and Portugal but medical expenses in those and other European countries are considerably cheaper.

Mr Moloney, who is also the vice president of the Pan European Organisation for Personal Injury Lawyers, said our awards system is the same in some minor injury cases as Romania and Poland. “It is essential for the fair delivery of appropriate compensation that the real financial value of such payment is reassessed given the dramatic increase in the cost-of-living standards here,” he said.

The guidelines, he said, should be immediately reviewed to ensure that injustice is not being done to people who are injured through no fault of their own.

“The essential purpose of compensation is to, as far as possible, to enable the person who has suffered personal injuries from negligence to get back to a normal life, that is the position they were in before the negligent act occurred. It is not to enrich someone. 

"That includes ensuring that the full costs of ongoing and future medical treatments, care costs and transportation are paid in addition to compensation for pain and suffering.” 

They have been backed by the Law Society of Ireland which represents over 14,000 solicitors. Law Society spokesman and former president, Stuart Gilhooly SC, said the country is in a very different situation now than when the guidelines were put in place last year and they are going to have to be revisited.

He said under the Judicial Council Act 2019, there was provision to take into account the economic conditions and this could now be done. He said plaintiffs can be dealing with substantial car damage, loss of earnings or medical bills and these “special damages” or expenses can exceed general damages.

Fall in payouts

Mr Gilhooly said there was also a serious problem emerging in relation to access to justice where people are finding it difficult to find solicitors to take on minor soft tissue injury cases which will now only attract awards of €6,000 but require the same level of work.

The amount paid out in personal injuries awards in the past two years has fallen by €118m, PIAB said at the end of July. The annual report which was published then said the fall in payouts has been partly driven by a decrease in the volume of claims received, and a reduction in accidents during the Covid-19 pandemic.

However, changes to the personal injuries guidelines were also highlighted as one of the reasons why the amount has fallen. PIAB handled 21,410 new personal injury claims and awarded total compensation to accident victims of over €157m in 2021.

According to the agency, the number of claims received is a reduction of 18% compared with the previous year. This follows a reduction in 2020 of 16% and an overall drop in claims volumes in the last two years of 31%, the report noted.

The report was the first since new guidelines on personal injuries were introduced last year. The new guidelines introduced a range of compensation payments for neck injuries, from the most minor (€500) to the most severe (€150,000). 

The guidelines replaced the old guidelines known as the Book of Quantum. The average PIAB award after the guidelines came into effect last year was €13,825 — down from €23,877 in 2020.

*

The Personal Injuries Guidelines from the Judicial Council deal with a wide range of injuries in terms of 'General Damages', which are the amounts awarded for pain and suffering in relation to an injury where someone else is at fault. Medical bills, out-of-pocket expenses and loss of earnings incurred by a personal injury claimant are covered by 'Special Damages'.

More information here.

This article was edited on Oct 24, 2022 to include the above explanation regarding 'General' and 'Special' damages

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