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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
depends upon court decisions.
Elimination of Fault Principle
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-
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-
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