The Gazette 1987

GAZETTE

APRIL 1987

system of trial) are not likely to pro-

vide any great savings that will be

noticed in insurance premiums.

The insurance industry itself has

admitted this in the recent debate

on the Government's proposal to

abolish juries in civil cases. More-

over, the most recent study of the

English system, where there is no

jury trial, concluded that the fault

system is inefficient, dilatory and

disproportionately expensive. (Lord

Chancellor's Dept., Civil Justice

Review, Consultation Paper: Per-

sonal Injuries Litigation, Feb. 1986,

p. 36). From this is it clear that the

inefficiency and the expense

associated with the system are not

caused by the presence or absence

of the jury trial, but rather by the

"fault system" which is present in

both jurisdictions.

It is submitted, therefore, that

the best way of handling the un-

insured driver problem is to intro-

duce a major reform which would

move away from the fault system

to a strict liability or no-fault

system.

I n t e r im Re f o rms

— Some Proposels

Pending the introduction of such a

major reform — which would prob-

ably meet with a lot of resistance

from vested interests — the follow-

ing suggestions might be con-

sidered within the present fault

system:

A. Increased Hearings

at Lower Level

It is suggested that most motor

accident cases in Ireland are heard

at a very high level of adjudication

(frequently in the High Court) while

the comparative situation in most

other European States is that such

cases are settled at a lower level,

thus incurring lower costs. The

possibility of hearing such claims at

a lower level of adjudication should

be investigated further. The in-

creased jurisdiction of the Circuit

Court which can now hear cases

up to £1 5,000 should have made

a contribution on this matter. Un-

fortunately, there are no studies

done on the effect which this has

had on keeping legal costs down.

Moreover, it does not appear that

litigants who bring their actions in

the High Court and are awarded

more than £7,500 but less than

£1 5,000 are sufficiently penalised

for not commencing their action at

Circuit Court level. They may still

be given High Court costs. (See

Section 17 of Courts Act 1981.)

This certainly does not encourage

litigants or their advisers to com-

mence their actions in the Circuit

Court. A greater contribution could

be expected if the jurisdiction of

the Circuit Court were raised to

£30,000.

B. The "Two Senior" Rule

The necessity for a total of eight

lawyers to be involved in the nor-

mal High Court action should be

discontinued. In particular, the

" t wo Senior" rule should be aban-

doned. This rule of practice among

the Senior Bar could be dis-

couraged by providing that the

costs of t wo Seniors should not be

allowed on taxation of costs unless

the trial judge gives a special certifi-

cate that the case warrants t wo

seniors.

Greater Co-operation

between Insurance

Companies

The law of large numbers which

states that the larger the group the

more accurately the losses of the

group can be predicted, is of

course particularly relevant to the

insurance industry which thrives on

high degrees of certainty. There-

fore, it is submitted that a common

information bank should be estab-

lished and that the possibility of

establishing one insurance fund for

all Irish motor risks should be

examined. This need not be State

run but could be an amalgamation

of the compan i es presently

operating in the area. Such a fund

would benefit from higher certainty,

economies of scale, and consistent

policies relating to settlement, etc.

Perhaps the companies involved in

motor insurance should also,

because of the smallness of the

Irish market, explore the pos-

sibilities of greater co-operation

and information sharing. Care

would have to be taken, how-

ever, to ensure that competition

would be maintained in this event

and that a restrictive practice pro-

blem would not arise. Rational

resource pooling on a reasonable

scale should help to reduce

premiums.

Paul Romeril

Consulting Litigation Engineer

has moved to:

1 9 Upper Pemb r oke Street,

(off Fitzwilliam Square)

Dublin 2.

Our

temporary telephone number

( 01) 7 6 1 1 9 6

D. Insurance Premiums might

be tax deductible

Consideration should be given to

making insurance premiums tax

deductible. Loss of revenue to the

government could be recovered by

taxing other motoring expenses

more heavily (e.g. petrol). Thus

there would not in the long run be

a large change in the motorists

outlay or government's income but

the "avoidable" costs of motoring

(i.e. insurance) would be reduced

thus making it more attractive to

abide by the law especially if higher

fines are to be imposed, (cf.

generally Posner, The Economic

Analysis of Law). The increased

costs will be in areas which the

motorist cannot possibly avoid

(petrol, oil, etc.). This should have

the effect of promoting the desired

result which is universal insurance.

The added advantage is that the

payment on the insured items is a

voluntary one insofar as petrol, etc.

will be bought only when needed

and the burden of payment is

spread over a period of time thus

facilitating the less well off. The

question of diminishing returns on

petrol taxation is not within the

scope of this submission except to

suggest that such problems may

be alleviated by the reduction in

insurance premium costs.

E. Abolish the Jury form of

Trial?

Abolishing the jury form of trial will

not

have any appreciable effect on

insurance premiums. This has

already been admitted by the

insurance industry itself. This con-

clusion is supported by an earlier

s t udy on the problem: see

McMahon,

Judge or Jury? The

Jury Trial for Personal Injury Cases