The Alliance for Insurance Reform has welcomed a new report from the Law Reform Commission about legislation that would put a cap on personal injury insurance claims.
The guidelines being prepared by the Judicial Council will eventually replace the Book of Quantum, which is produced by the Personal Injuries Assessment Board, and to which judges currently have to have regard when deciding on general damages.
The new system is likely to continue to involve a cap on personal injury awards of €500,000 for the most catastrophic of cases - a figure that can be exceeded if a court believes exceptional circumstances justify such a move.
The report was timely, the alliance's director Peter Boland told RTÉ radio's Morning Ireland, as the country was in the middle of an insurance crisis. Personal injury pay-outs in Ireland are 4.4 times higher than in the UK, he added.
The problem was with “paracetamol injuries” which included bruising that were receiving payments of €20,000. He said such pay-outs were not sustainable and the country could not afford to continue paying out such money for minor injuries.
There were two routes the Law Reform Commission could take - via the judiciary or the Oireachtas, he said. There was a Plan B, the Oireachtas could legislate for change along the lines of the specific model outlined by the Law Reform Commission.
Plan B was there if the judiciary “does not step up to the plate”, he said.
The report was “very good news for policyholders” said Mr Boland.
In a recent Supreme Court decision in the case of the Ruth Morrissey, who died earlier this year at the age of 39 from cervical cancer, the court confirmed that the cap should be €500,000, an increase of €50,000 on the previously generally recognised figure.
The awards for general damages for less that catastrophic injuries are set by the courts using previous court rulings that address how proportionality should be determined, while taking into account the €500,000 “cap”.
The new report, published on Wednesday, Capping Damages in Personal Injuries Cases, examines four types of legislative model for capping damages, including one introduced by Fine Gael senator Anthony Lawless in 2019, by way of a private members' bill.
The commission decided that the model outlined in the Civil Liability (Capping of General Damages) Bill 2019, might be open to constitutional challenge because of the role it would assign to the minister in the capping of damages awards.
It also decided that a model involving a mandatory cap being set by the Oireachtas by way of legislation, would be at risk of constitutional challenge.
A fourth model examined, which involved a mix of Australian and English law, would probably be able to resist a constitutional challenge, the commission decided.
The report says it would be appropriate that the new proposed regime centred on the Judicial Council Act 2019 should be given time to be applied in practice.
