The message about the Injuries Resolution Board (IRB) is clearly not getting through to the public in general and insurance customers in particular. Established in 2004 to provide a lower cost route for settling personal injury insurance claims, nearly all cases must now be submitted to the board. Overall, it resolves one in two claims.
The other fifty per cent of claims – where either side rejects the IRB settlement proposal – are resolved by litigation, which usually takes the form of an out of court settlement. The enduring popularity of the legal route for resolving motor insurance injury claims is hard to fathom, given that court awards and IRB awards are based on the same guidelines and the average value of awards made across both channels is the same. However, the litigation route takes three years longer and legal costs are on average 24 times higher.
It is hard to see how the continued use of the litigation channel benefits the injured party. Why wait three years for the same result? The higher fees that are incurred – for little apparent benefit to the client in most cases – may be paid by the insurance company, but the wider pool of insurance customers ultimately foot the bill in the form of higher premiums.
The presumption is that the bulk of IRB settlements are rejected by a claimant on the advice that they may do better by going down the litigation route.
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The Solicitor’s Guide to Professional Conduct places no specific requirement on solicitors to talk through the pros and cons of rejecting an IRB settlement and going down the litigation route with their clients. There are general guidelines about client relationships which if adhered to in the spirit intended should suffice.
It perhaps asks too much of any profession to expect its members to turn down work. The time may have come when a different approach is needed to ensure that claimants are fully aware that, in the round, the benefits of rejecting an IRB settlement and taking your case to court are at best marginal.
