The Gazette 1993

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GAZETTE V I E W P 0 I NIT OCTOBER 1993
Unjust, Unworkable and
Unconstitutional
| What is the proper level of
compensation to be paid to an accident
victim who suffers serious personal
injuries?
That is an issue that may well arise for
debate in this country in the near
future. The Minister of State with
responsibility for Commerce and
Technology, Seamus Brennan TD,
thinks that Irish courts pay too much -
especially for non-pecuniary loss,
usually referred to as 'pain and
suffering'. Minister Brennan's concern
is with the high cost of insurance,
particularly motor insurance, in this
country. He has come to the conclusion
that the level of damages paid in
accident cases is the principal
'bugbear' and, if we could reduce the
payouts of insurance companies, by
reducing compensation levels, all
would be well and insurance levels
would come down.
The Law Society recently responded to
Mr. Brennan's proposals with a
| detailed, well-argued paper which
| suggested that he was wrong on all
counts. The paper suggested that the
Davies Arnold Cooper Report, upon
which Mr. Brennan appears to be
basing his policy, was an unreliable
study; that Irish levels of damages
were fair and that, even if
compensation levels were reduced,
Minister Brennan could not guarantee
any corresponding reduction in
insurance premiums. The paper fired a
strong warning shot at the Minister that
a proposal to determine levels of
compensation by statute could be
unconstitutional.
In our view, Minister Brennan owes
the Irish public some explanations. He
must, at a minimum, justify his
contention that Irish levels of
compensation are too high and he must
also, in our view, show clearly how, if
they are reduced, he proposes to
| guarantee a reduction in insurance
I levels.
I A cause and effect link between levels
of compensation and the high levels of
insurance in this country has been
presumed by Minister Brennan.
According to the Davies Arnold
Cooper Report, however, countries
such as France, Germany and the
Netherlands have higher general levels
of compensation for the most serious
categories of injury yet, in those
countries, motor insurance levels are
much lower than in Ireland. How does
the Minister explain this? Moreover, it
is clear from a comparison between the
levels of compensation in England and
here that one of the main reasons for
the difference - which is not all that
significant - is that Irish courts use
actuaries for calculating future losses
(in relation to life expectancy)
whereas, in England, this function is
performed by the judges themselves. A
close reading of the Davies Arnold
Cooper Report will show that the
multiplier used for future life
expectancy is significantly higher in
Ireland than in England - for example,
in the case of serious brain damage to a
woman aged 20, the multiplier used in
England was 15 years whereas, for the
corresponding injury in Ireland, the
multiplier was 23 years. This is a very
significant factor which accounts for a
large part of the disparity between
English and Irish levels of damages. It
seems hardly necessary for us to ask
which of the two approaches is the
fairer.
The Law Society paper made some
good suggestions as to how the high
level of insurance should be tackled in
this country. There is a clear need to
establish why fatalities and serious
injuries are higher here than in the UK
despite the lower accident rate. The
level of uninsured driving needs also to
be tackled. The Society also made some
strong points about the American
experience in this general area. In many
of the States across the US, attempts to
introduce caps on levels of damages
were held to be unconstitutional and,
even in those States where such
'reforms' were implemented, there is
no evidence that there has been any
reduction in insurance costs.
If this debate is to continue - we would
hope that in the general public interest
the Minister will now drop his
proposals - Minister Brennan must do
more than simply advert to what he
believes to be 'EC norms'. He must
answer the paper put to him by the
Law Society.
We await his response •
A copy of the press statement and
summary of the Society's submission to
government, or a copy of the full text of
the submission, is available to practit-
ioners on request to Mary Kinsella at the
Law Society. Tel. 01-6710711.
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