A change in damages practice: Courts get tougher in claims cases

A COURTROOM is a difficult, stressful place for most lay people. 

It is where humanity’s worst side is revealed and, only occasionally, a place to see humanity’s better side triumph. In the most serious cases, violence or gross dishonesty are centre stage but for most people, a day in court is an attempt to bridge the divide between what this world should be and what it actually is.

That balance-the-books reckoning is the objective when a person injured (or not) through a third party’s behaviour or carelessness takes a case to try to secure compensation. This essential process has been discredited by the dishonesty and opportunism of a tiny minority of claimants whose creative testimony has allowed the insurance industry create an impression that nearly anyone making a claim for damages is an unprincipled adventurer. Obviously, this is untrue but, in a minority of cases, it is unfortunately so.

The wind seems to be shifting. Since the Court of Appeals was established just over two years ago it seems a new culture may be taking root. It seems that awards are being cut, that rulings are being overturned and more and more claims are being dismissed. If there is a new more assertive, less- easily-cowed culture establishing itself in our awards process then it will certainly be welcomed by the insurance sector. However, consumers may delay their welcome as they may be unduly optimistic to expect lower premiums. This is, as history shows, a one-way street.

Insurance costs are a real issue for Irish businesses, especially for those whose insurance providers increase premiums because they make a settlement with a claimant without defending it in court. That this practice is driven by the legal professions and their eye-watering fee levels makes it even more unattractive. It is a process that needs reform.

In recent weeks the impact of legal costs was highlighted — again — when the Comptroller and Auditor General, Seamus McCarthy, reported on the redress scheme set up to compensate the victims of sexual abuse at the hands of clerics. The C&AG found that 15% of the €970m made in awards went to the legal professions. In Canada, that figure was 13%, in Queensland and Western Australia it was 4%, close enough to a quarter the Irish rate. The Law Library lobby will, as is usual, shrug off these details but the level of legal fees charged in this country feeds into the Central Statistics Office figures released last week that show Ireland is the third most expensive country in the European Union. Irish prices are 22.5% above the EU average. Legal fees are inevitably a driver of insurance costs.

The new culture of challenge has exposed testimony that is at best questionable and, as some judges have observed, utterly unbelievable. This moves the process to another point — will those responsible for initiating perjury prosecutions — the gardaí or the Director of Public Prosecutions — do their part? The change brought by the Court of Appeals is welcome but we must never lose sight of the fact that every citizen is entitled to their day in court. How they use that great privilege is another matter altogether.

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