ISME welcomes the publication of the Central Bank’s third report of the National Claims Information Database into private motor insurance. The report confirms a downward trend in the cost of motor insurance, falling 7% from 2019 to 2020. In view of the heavy restriction on movement during the 2020 pandemic lockdown, we in ISME are surprised that this decline was not higher.
However, the report also points to matters of concern for us:
- Legal costs continue to represent the majority of the cost of claims. Legal costs account for 51% of total costs in litigated cases, and 65% of total costs in litigated cases below €100,000 (which is the vast majority of cases).
- Despite the fact that there is only a nominal difference between the size of the awards made by PIAB and those awarded by litigation, in cases worth more than €30,000, more than 50% of cases are litigated.
- PIAB continues to handle only a minority of cases, with 10% of claims settled in that channel.
- Yet the time from claim to settlement in the litigation channel at 3.9 years is almost twice that of the time through the PIAB channel which is two years.
- We cannot conclude that litigation in the vast majority of motor claims is in the pecuniary interest of the plaintiffs, yet it continues. The Department of Justice must bear this in mind as it considers its resource allocations for the Court Service, and future legal reforms.
Despite some of the good news for policy holders in the Central Bank report, motor insurance is not a good indicator of progress in Employers’ Liability (EL) and Public Liability (PL) insurance for business, sporting and charitable bodies. Motor insurance is mandated by law for road users private and commercial, and it is enforced at the roadside by Gardaí.
EL and PL insurances however are purely commercial, and are provided by a far smaller number of insurers who exert disproportionate market power because they are so few. Many businesses are facing a “take-it-or-leave-it” premium increase for 2022, while others are not being quoted a premium at all. This is an existential issue for may of them. The sectors most at risk are nursing homes and homecare providers; hospitality venues; childcare businesses; charitable, voluntary and community organisations; sporting and adventurous activities, especially those catering for children.
ISME has written to the Department of Justice on several occasions concerning the stalling of essential legal reforms in this area.
- The Occupier’s Liability Act must be amended to provide for a ‘common duty of care’ that is practical and proportionate as well as reasonable. The tort reforms introduced by the Australian Federal Government in 2002-2004 can serve as a simple template for reform.
- We need urgent reform of the Defamation Act 2009, which breaches our constitutional right to express freely our convictions and opinions, and which has been criticised by the European Court of Human Rights.
- Successful defendants must be able to recover their costs quickly through a bond, or from the plaintiff’s lawyers.
- The right of appeal in civil litigation must be regulated (as it is in criminal law) to prevent impecunious or vexatious plaintiffs from coercing defendants into settlement.
- Defendants must not be penalised for raising fraud as a defence where there is objective reason for doing so.
- We must (after 17 years on the statute books) commence Section 30 of the Civil Liability and Courts Act which provides for a claim-by-claim register of all personal injury claims. This is an essential tool in the avoidance of exaggerated and false claims.
We simply do not have the time for further procrastination on these legal reforms. Without them, many activities and facilities we value will not be able to remain open in the New Year.