ISME, the Irish SME Association is urging the insurance industry to confirm publically that they intend to register debt judgments against losing plaintiffs as a standard operating procedure in the Irish market.
The Association has been an active supporter of the Alliance for Insurance Reform in its’10 Asks’ campaign. The 9th ‘Ask’ in this campaign for lower insurance costs is the reinstatement of the 2003 Irish Insurance Federation/Ibec protocol on dealing with claims. Recent media reports have suggested that, while some insurers are actively and successfully defending false or exaggerated claims on behalf of their clients, they are not pursuing the recovery of costs, where plaintiffs’ cases are thrown out.
Commenting on this issue, ISME CEO Neil McDonnell said:
“At least one ambulance-chasing solicitor, recorded by an Irish Independent investigative journalist, boasted about how even two ‘chancers with fraudulent claims’ were not pursued for costs by the insurers. This is an egregious breach of duty by the insurer to recover costs incurred. Failure to pursue losing claimants means there is no ‘moral hazard’ for those who take dubious, vexatious, exaggerated, or downright false claims.”
The ISME CEO continued:
“As a matter of course, insurance companies must register judgments for costs against losing claimants, even where those claimants have no means to repay.
This is especially important since many of those presenting false or exaggerated claims are serial claimants. Securing a judgement for costs against them means there is a good chance that a future award in their favour can be ‘garnished’ to recover costs.”
Hugh Ward, principal solicitor with Hugh J. Ward & Co. Solicitors stated:
“When a court decides to award costs against the losing party it is essential that the costs are recovered from the losing party. This general rule helps to prevent the issuing of frivolous and fraudulent proceedings, or proceedings without any reasonable hope of success. In our experience the recovery of court awarded costs is a relatively straight forward debt collection process, which is not expensive and can demonstrate a serious financial consequence of issuing legal proceedings.”
An ISME member recently recovered the costs of defending a vexatious High Court action from an employee who also took a personal injuries case against them, by garnishing the personal injuries award. This is not an expensive process, and ISME uses this service in recovering its own debts when necessary.