The Gazette 1993

GAZETTE

V I E W P 0 I NT

IMNAGEMN

JUNE 1993

Capping awards is not the answer

However well-intentioned, the proposal

by the Minister for Commerce & Tech-

nology, Seamus Brennan, TD, to reduce

the cost of insurance premiums by

placing a cap on the amount that judges

could award in personal injuries cases, is

misguided. Apparently, the Minister

would seek to bar judges from awarding

damages higher than the European

average. Aside from the very dubious

constitutionality of the proposal (which

the Minister appears tacitly to accept),

any attempt to interfere with the basic

rights of ordinary people to be properly

compensated when they suffer personal

injury through no fault of their own must

be viewed with serious concern.

Reducing the cost of insurance cover is,

undoubtedly, a socially desirable

objective but the Minister appears, in

responding to direct pressure from

insurance and business interests, to be

attacking the rights of the most

vulnerable sector - ordinary people who

are injured. That is not the way forward.

The reasons for the relatively high cost

of insurance in this country cannot be

reduced to any one factor and any

changes that might be brought about

must be carefully balanced having

regard to the rights of all the parties

involved. It is facile and unfair to seize

solely upon the compensation element in

the total costs of the insurance industry

and argue that it alone should be

reduced. A much broader approach is

required under which every aspect of the

cost of insurance would be subjected to

rigorous examination, including the

procedures and administrative practices

of insurance companies themselves.

It would appear from the public

pronouncements of leading members of

the insurance industry, business

organisations and certain public bodies,

notably Dublin Corporation, that a

climate of opinion is being inculcated

where the entitlement of a person to seek

fair and legitimate compensation is

being undermined. It is important that

both branches of the legal profession, on

behalf of the public, would seek to assert

the entitlement of ordinary people to

vindicate their rights and to be fully and

properly compensated when they have

been wrongly injured. This is, after all,

the essence of our system of justice.

Much has been made of comparative

i statistics on the level of awards in

Ireland and those pertaining in other

European countries. There are dangers

inherent in selectively adopting legal

provisions or rules from other jurisdict-

ions without looking more generally, and

i in a broader way, at other aspects of the

i legal systems in those countries and

especially at the employment and social

welfare codes that apply to people who

suffer injuries. There is a risk that,

because European legal systems are very

different ffom that in Ireland, we would

not be comparing like with like. And, in

any event, who is to say that the Europ-

ean average in relation to compensation

and personal injury cases is

just and

| equitable

in all the circumstances and

who is to say that those levels of

I compensation would be appropriate for

the circumstances that apply in Ireland?

It is noteworthy that a report issued last

year by Coopers and Lybrand, which

examined the cost of motor insurance in

this country as compared with the UK,

indicated that the level of accidents in

this country involving claims for

personal injuries was much higher than

in the UK. As well as that, motoring

costs generally are much higher in this

country and our roads are in a much

poorer condition. These factors have to

be taken into account in looking at

insurance costs.

Some years ago, the Government

concluded that juries were the cause of

the problem and they proceeded to

abolish the jury system in personal

injuries cases. That did not, apparently,

succeed in reducing the level of awards.

And there are good reasons for this. One

reason is that Irish judges have their own

sense of what is fair and equitable

having heard all the evidence. It would

be highly dangerous, to interfere with

the discretion of a judge to award what

he regards as proper and just in a

particular case. The judge evaluates all

the evidence and, in particular, the

medical evidence relating to the injuries

suffered and is, therefore, best placed to

make the decision. And if it is felt by the

other side that the trial judge was too

generous in damages, there is the right to

appeal.

Undoubtedly much can be done to

reduce insurance costs. It is interesting,

in this context, to look now at the

MacLiam Report of 1982 on this issue.

There we find a host of recommenda-

tions, but no action appears to have been

taken on many of the recommendations

that lie exclusively within the control of

Government. We believe that the

Government should act now to reform

our civil litigation procedures and

provide a speedier and more efficient

service in the courts. Last year, at the

express invitation of the Attorney

General, the Law Society agreed to parti-

cipate in a working party to examine

certain issues relating to personal injury

actions in the High Court. That working

party also includes representatives from

i the Irish Insurance Federation and the

: Bar Council. It has already made two

reports containing many useful recom-

mendations about how such procedures

could be improved, thus leading to re-

duction in costs. As yet, there has been

no response from Government to the

reports.

If we are going to have European norms

in relation to damages for personal

injuries it is fair to ask the Government

to apply European norms in other areas.

In particular, let us have a system of civil

legal aid in this country that equates with

Í the European norm. The Government

í should address the real issues underlying

í the high cost of insurance and provide

| better and speedier access to justice

! rather than sending signals to the com-

munity that they propose to reduce the

! compensation levels payable to ordinary

| people when they suffer serious injuries.

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