The Gazette 1971

quate for others, depending upon who is at fault on the judgment of a jury. It is important to be reminded from time to time about a couple of fundamental ancillary facts. Firstly, the motor insurance industry is itself not all that happy about the present situation in which it continues losing money on its underwriting of motor insurance. Then to add insult to injury as it were, it ends up as the focal point of a good deal of largely undeserved if well- intentioned criticism. Secondly, and this is the point most frequently forgotten, the motor insurance industry is merely doing what it is designed under the present system to do. It is not necessarily responsible for any flaws real or imagined in the legal system, within which it operates. Obviously if the system changed the industry could adapt itself to such changes as it frequently had to do in the past. There is frequently a misconception about what the motor insurance industry purports to do. It was never intended as a system, nor was it designed with the objective of protecting the injured party. But the fundamental misconception must be rooted out that it is the industry itself which is responsible for the flaws which critics who share the views of the Auditor find in the current legal system. It is important to remember that the industry is offering the service it is supposed to offer. Unless motorists were protected by liability insur- ance very few would be able to afford the financial risk of driving a car at all. Motorist Relieved of Financial Responsibility On the other hand it must be emphasised that this is not an open and shut case. There are people who would disagree with the Auditor's fundamental thesis. One fundamentally important consequence of such change, for example, would be that the motorist would be exempt from the financial responsibility for the acci- dents he may cause. Many could find such a situation repugnant to their sense of fair-play. The classic example is of course that of the drunken driver who runs over and kills a child. The position under a "no fault" system would be that he would receive payment for his own minor injuries and escape all liability for the loss and suffering he has caused. Another problem is the moral one of whether other drivers should be made to pay for the compensation to victims of accidents which resulted from their own carelessness or negligence. Furthermore it is sometimes suggested by critics that a change to a "no fault" system would lead to even more complaints than those presently heard about the current system. There is a real difficulty of estimating the costs of such a system. Many feel that such costs might esca- late well above the level of the current system. The only personal view that I will express is this, that we must be careful to avoid over-simplification either way. In fact any attempt at formulating proposals for change should be preceded by a clear understanding of all of the com- plex issues involved. The problem will be solved success- fully only if the real fundamental causes are isolated, identified and understood. No solution would be of any value if its practicability were not carefully examined. The facts of the case as they exist in this country are being examined with the utmost objectivity in order to identify what are the real difficulties in this country. The problem would appear to be universal and it has received a great deal of attention from academics, from lawyers, from insurance associations and from govern- ments all over the world. We are currently examining virtually all of those systems which have been the result of careful and thorough examination throughout the world, for their soundness, their thoroughness, their reliability and particularly for their relevance. In mak- 49

raised this question of abandoning the fault principle in 1965 and it was included in the programme of work of the Council of Europe. The Irish delegation again raised the matter in 1966 at the Berlin Conference of European Ministers for Justice. The essential basis of our existing system is really that of shifting the loss from the plaintiff to the defendant. Insurers think in terms of a general pool so that the loss in one claim is set off against a saving in another one whereas the individual litigant is concerned only with his own claim. Expense to car owners should not be the test or the limiting point, particularly as the present system has no impact on behaviour because by virtue of the system of compulsory insurance it is not only the negligent motor- ist who pays. A second great defect in the existing system is that in respect of smaller claims the adminis- trative and litigation costs can sometimes represent a sum equal to from 30 to 100 per cent of the damages awarded. The present system has also had a particularly bad effect in the development in the legal profession as all the best brains in the Bar in particular have been devoted to this type of litigation which means that many fundamentally more serious and important branches of the law have been completely neglected. This is particularly harmful in a system such as ours where so much of the development of the law itself It is suggested that the best system would be one in which the fault principle is entirely eliminated and that damages should be continued to be awarded under the headings which at present exist with one modification, namely, that sums which are awarded in respect of prospective financial losses whether by way of earnings or outgoings should be funded and tne actual amounts paid periodically so that if a person should not live as long as expected the balance unpaid would revert to the general fund. It is suggested that a statutory board or boards should be set up to deal with these cases which would comprise as personnel a lawyer, an actuary, a medical expert or other type of expert depending upon the matters arising for consideration in assessing the damages. The type of medical expert on the board at any given time might depend upon the particular nature of the injuries suffered. A claimant for damages who, in the result, was not satisfied with some one or more ingredient of the damages awarded could then go to court for the purpose of appealing against the award for that particular ingredient. Mr. John O'Connor, M.Sc., F.I.S., investments manager of the New Ireland Assurance Company congratulated the Auditor on his paper, and said that a good many people would agree with the Auditor's main thesis, undoubtedly the motor insurance industry operating within this system has tended to be the focal point of a good deal of criticism in countries in recent years, as : (a) some individuals or groups claim that they find it difficult to obtain insurance or to get renewal of their insurances at reasonable levels or premium; (b) some critics are of the opinion that premium rates are too high; and (c) there is the charge of inequity in compensation amounts, unreasonable delay in receiving awards because of delays in the legal system, Court costs, and so on. People sharing the Auditor's basic viewpoint, while not necessarily agreeing with all his conclusions, feel that it is unjust that payments should be delayed by compli- cated legal processes and crowded Court calendars, that awards should be generous for some and inade- depends upon court decisions. Elimination of Fault Principle