The Gazette 1985

INCORPORATED LAW SOCIETY OF IRELAND

GAZETTE

Vol. No. 79 No. 3

April 1985

Insuring Justice?

HE well orchestrated campaign promoted by the

motor insurers seeking an alleviation of their

financial plight appears to be meeting with some success,

if recent reports in the media are correct. That much is

wrong in the field of motor insurance is undeniable; that

the true causes are those seen by the insurance industry is

perhaps less certain. An authoritative US source has

noted that insurance companies complain most about the

cost of claims when investment income falls. Could this be

a factor in the Irish situation?

Before accepting all the arguments made by the

insurers it may be well to look at them more closely. One

cannot be disputed: the high percentage of drivers who

are uninsured. This is a national scandal, and efforts to

tackle it seem to be inhibited by the belief, sustained by

the "clientism" of many of our legislators, that all persons

over 18, regardless of their records as drivers or the

condition of the vehicles they wish to drive, are entitled to

insurance cover. The burden of coping with the uninsured

driver ends up with those who are honest enough to insure

themselves as the insurers pass on to such persons the cost

of contributions made by the insurers to the Motor

Insurance Bureau of Ireland. This same principle has

recently been applied, with dubious morality, to the

funding of the PMPA. Quite why the industry should be

obliged to bear the expense of bailing out a company

which has run into serious difficulties when the statutory

monitors seem to have so clearly failed in their duty to

police the industry is hard to understand.

The extravagant awards of juries are cited as another

source of excessive cost. The example of the UK is thrown

up as a comparable jurisdiction where awards are

substantially lower than in Ireland. Awards in personal

injury cases have been made by Judges only in the UK for

over 30 years and it is undeniable that awards there are

lower than in this country. This does not, however,

warrant the conclusion that awards in the UK are at the

correct level. There is one notorious factor which may be

largely responsible: the petrification of money values in

the judicial mind. This is most obvious in the criminal or

quasi criminal area where the same fines are applied by

Judges in their 10th and 20th year on the Bench as in their

first. The phenomenon is noted in other areas where

money values are concerned. The UK figures for personal

injury awards do not show that the awards have kept pace

with inflation. Is the call for consistency in awards in truth

a call for lower awards? If there were not a reasonable

consistency about jury awards in Ireland how would such

a high percentage of cases be settled. In the recent High

Court sessions in Dublin only 37 cases went to a hearing

while 422 were settled. In passing it may be noted that the

evidence from Dublin Circuit where a number of judges

hear personal injury cases without juries does not suggest

that consistency in awards automatically results from the

absence of juries.

In retaining the jury system two changes might be

considered, the first, advocated by the Prices Advisory

Committee in its 1982 Report being that the Jury should

be allowed to be given an indication of the general level of

awards for the type of injury involved in their particular

case; secondly, in serious injury cases including para and

quadri-plegic cases, as has been suggested before in these

pages, the vast awards should largely be replaced by

annuities of sufficient level to maintain the injured party

and to provide all necessary medical services. Too often

the financial benefit intended for a young person who was

almost completely incapacitated ends up with the next-of-

kin when the life expectancy figures prove over optimistic.

Even more tragic are those cases where the award proves

inadequate to meet the victim's long term needs.

Finally, there are the legal costs; if these are high, as

they are, the remedy lies largely with the insurers. Early

settlements, more front end loading of Counsel's fees, a

less cosy relationship between claims managers and the

kings of the round hall all might help to keep costs down.

The "second Senior" syndrome would vanish if cases

wére settled earlier and fewer set down for trial. There are

hopeful signs of improvement in the settlement rate and a

falling off in the number of High Court Writs being

issued. Would it be too unfair to accuse the insurers of

taking advantage of yesterday's less serious problems

which are seen to be in decline to gain an advantage for

the morrow?

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