- Commission finds that personal injury compensation payments for whiplash injuries are typically 4.4 times higher than awarded in England and Wales
- Key recommendation that the Judicial Council be requested to compile Judicial Guidelines for personal injury awards
- Implementation of recommendations should reduce insurance premiums for consumers and businesses
The Minister for Business, Enterprise and Innovation, Heather Humphreys, TD, and the Minister of State for Financial Services and Insurance and Chairperson of the Cost of Insurance Working Group, Michael D’Arcy, TD, today (Tuesday 18 September 2018) welcomed the publication of the Second and Final Report of the Personal Injuries Commission, which was established on foot of a recommendation of the Cost of Insurance Working Group.
Minister Humphreys said “I am very aware of the serious impacts on businesses and consumers of high insurance costs and other costs of doing business. I believe that the implementation of these recommendations, together with the complementary work of the Government’s Cost of Insurance Working Group, will bring greater consistency and predictability to awards, faster resolution of claims and ultimately, a reduction in insurance premiums. This will benefit consumers, businesses and society as a whole.”
“I would like to pay tribute to the Chairperson of the Personal Injuries Commission, Justice Nicholas Kearns and all the members of the Commission for their engagement in and commitment to this important work over a challenging 18-month work programme”, Minister Humphreys added.
The Personal Injuries Commission has made a total of 14 recommendations across its two reports which are aimed at positively impacting the overall Irish claims environment.
Commission Chairperson Justice Nicholas Kearns said: “The rigorous benchmarking study commissioned by the Commission shows, for the first time, that personal injury compensation payments for soft-tissue (‘whiplash’) injuries in Ireland are typically 4.4 times higher than the award levels that claimants in England and Wales receive for broadly similar injuries. The Commission acknowledges the need to ensure that all genuinely injured claimants receive adequate compensation. However, we must also recognise the negative impact of high insurance premiums on consumers and businesses. The multiple that has emerged in the benchmarking exercise is so significant that the Commission is satisfied that it calls for a response that is effective and achievable in the shortest time.
“Therefore, one of the key recommendations in the Report is that the Judicial Council, when established, would be requested to compile Judicial Guidelines for personal injury awards, similar to the system in Northern Ireland and in the UK. This will be facilitated by the early establishment of the Judicial Council,” said Justice Kearns.
Minister D’Arcy said “I believe that these recommendations along with the recommendations from the two Reports of the Cost of Insurance Working Group will deliver results in terms of providing greater consistency in award levels that will bring stability to the claims environment and in turn positively influencing the price of insurance paid by consumers and businesses. It is important that consumers and businesses can obtain insurance cover at a reasonable and fair price and I will continue working with relevant Ministerial colleagues to ensure that the proposed measures in the Reports are put in place as soon as possible.”
The Second and Final Report of the Personal Injuries Commission is available on the Department’s website here.
Notes for Editors
The establishment of the Personal Injuries Commission (PIC) was one of the key recommendations from the Report of the Cost of Insurance Working Group on the Cost of Motor Insurance approved by Government and published in January 2017. The Personal Injuries Commission was chaired by Justice Nicholas Kearns, former President of the High Court.
The Personal Injuries Commission was established in January 2017, by the then Minister for Jobs, Enterprise and Innovation, to assess systems for handling personal injury claims, particularly soft-tissue (‘whiplash’) claims focusing on causes, diagnosis, treatment and appropriate compensation level, to examine other jurisdictions including those where scales or rating of soft- tissue injuries are used, to analyse international compensation levels and compensation mechanisms and by benchmarking international awards for personal injury cases, to analyse and report on alternative compensation models internationally and following this make recommendations.
The terms of reference for the Personal Injuries Commission are set out in the Cost of Insurance Working Group Report on the Cost of Motor Insurance. The work of the PIC was phased over an 18-month work programme. The PIC has held 17 meetings since its inaugural meeting in February 2017, with its final meeting held on 28 June 2018.
The PIC, chaired by Justice Kearns, comprised of representatives from stakeholders that included the Bar Council, the Law Society, Insurance Ireland, the Irish Hospital Consultants Association as well as the Department of Business, Enterprise and Innovation and the Department of Justice and Equality, the Personal Injuries Assessment Board, the State Claims Agency and the Competition and Consumer Protection Commission
Since its establishment, the Personal Injuries Commission has been actively engaged in delivering in accordance with the terms of reference of its work. A considerable amount of research into approaches in other jurisdictions has been carried out along with a consultation exercise with the medical community and key stakeholder groups for the PIC’s First Report.
First Report published December 2017
The PIC has undertaken extensive research and stakeholder engagement publishing its First Report in December 2017. The Report makes 4 recommendations on the adoption of a standardised and internationally recognised approach to the diagnosis, treatment and reporting of soft tissue injuries by practitioners (Quebec Task Force Whiplash Associated Disorder (WAD) scale) who are appropriately competent and trained, the linking of future publications of the Book of Quantum to the Quebec Task Force WAD scale grades for soft-tissue injuries (‘whiplash’) and the gathering of relevant injury data and publication of same by appropriate bodies.
The Second and Final Report of the Personal Injuries Commission
The Second and Final Report represents an amalgamation of the second and third phase of the PIC’s scheduled work and deals in the main with the benchmarking of Irish personal injury award levels with international awards against those in England and Wales and an examination of alternative compensation and resolution models in other jurisdictions. Independent consultants (KPMG) were appointed to carry out the data validation/verification of the data received and to work with the Commission on the benchmarking exercise. The Report also includes an update on the implementation of the recommendations from the PIC’s First Report.
Key findings of the Report
- The benchmarking exercise has revealed that the level of general damages for soft -tissue (‘whiplash’) injuries in this jurisdiction runs at a multiple of 4.4 times that of our nearest neighbours, England and Wales.
- The PIC acknowledges the need to ensure that all genuinely injured claimants receive adequate compensation. The PIC recognises the negative impact of high insurance premiums on consumers and businesses.
- The multiple that has emerged in the benchmarking exercise is of such a magnitude that the PIC is satisfied that it calls for a response that is effective and achievable in the shortest time. It is a response which, in the form of a key recommendation in the Report, follows the example of judicial intervention which has occurred in Northern Ireland and in the UK, namely the introduction of Judicial Guidelines for judges.
- The PIC believes that the imminent statutory establishment of the Irish Judicial Council provides a unique opportunity to seek and obtain such guidance for judges in measuring general damages for personal injury. Judicial Guidelines should lead to greatly increased levels of consistency in awards, increase the frequency of early resolution of claims and reduce costs. The PIC understands that the Judicial Council Bill will be enacted by the end of the year.
Recommendations of the Second and Final Report
As a consequence of this recommendation, subsequent legislative amendments to the Personal Injuries Assessment Board Act 2003 will be required in relation to the removal of PIAB’s statutory responsibility to compile the Book of Quantum and also to the provision in the Civil Liability and Courts Act 2004 which should be amended to state that “the court shall, in assessing damages in a personal injuries action, have regard to the guidelines produced by the Judicial Council”.
The PIC believes this overall approach will achieve in early course a greater level of consistency in Ireland in the assessment of general damages.
In the event of any delay in the establishment of the Judicial Council the PIC believes that as a contingency arrangement the Executive should establish a formal framework, inclusive of PIAB, to enable the judiciary to complete guidelines in advance of the renewal deadlines for the next Book of Quantum.
The PIC recommends that the Judicial Council Bill 2017, establishing the Judicial Council, be progressed through the Houses of the Oireachtas as a matter of urgency.
The PIC notes that the Law Reform Commission has been requested to undertake a detailed analysis of the possibility of developing constitutionally sound legislation to delimit or cap the amount of damages which a court may award and believes it is the appropriate body best equipped and resourced to undertake this study. The PIC recommends that this analysis is informed and assisted by the PIC’s findings.
The PIC is satisfied that a ‘care not cash’ system of compensation for soft tissue injuries is incompatible with EU Law. Having regard to the decision of the CJEU in Petillo and Petillo v Unipol Assicurazioni  Case C – 371/12, it is not possible to replace cash compensation awards entirely with care. Possible schemes combining care and cash awards would appear to add additional costs and difficulties to the claims environment and accordingly the PIC is recommending such a system is inappropriate in an Irish context.
However, in respect of evidence heard by the PIC of the beneficial effects of early medical intervention and treatment where soft tissue injuries are sustained, the PIC recommends that any person who sustains a soft tissue injury receive timely, appropriate and effective treatment as part of a standardised treatment plan. Timely and effective treatment will improve patient outcomes and lead to downward pressure on costs associated with soft tissue injuries. In furtherance of this aim, the PIC recommends the development and roll out, in all relevant locations, of best practice standard treatment plans that focus on recovery alongside awareness and promotion of best treatment practices.
The PIC recommends that in cases where an insurer deals directly with a claimant, no offer in settlement or payment of a personal injury claim should be made unless and until a medical report has been obtained. The medical report should detail the nature, extent and prognosis of the injury. The PIC believes this to be a prudent measure to protect the interests of injured parties.
Claimants for their part must give prompt notification of any potential injury claim so that a proper investigation of the accident circumstances may be undertaken by a defendant.
The PIC recognises that exaggerated and fraudulent claims have an adverse impact on overall claims costs which in turn impact premium costs. The PIC believes this issue needs to be addressed by the development and deployment of suitable strategies, including technological strategies, to prevent and detect such activity. Fraudulent activities currently carry a low risk of detection and an even lower risk of prosecution and these are factors which tend to foster and encourage the continuance of the problem. The PIC has worked conjointly with the Department of Finance Cost of Insurance Working Group on this issue as fraud and exaggeration in their effects overlap the work of each group. The PIC supports recommendation 26 of the Cost of Insurance Working Group Report on the Cost of Motor Insurance regarding the potential for further cooperation between the Insurance Sector and An Garda Síochaná in relation to insurance fraud investigation. The PIC recommends the establishment of an Irish Garda Fraud Investigation Bureau along the lines of the Insurance Fraud Enforcement Department in the UK [IFED] without further delay.
The PIC recommends that insurers step up their anti-fraud capacity through the recruitment of suitably trained personnel and the development of various technological means of combating fraud. Wherever possible, insurers should provide timely information in relation to suspected fraud to An Garda Síochaná so that such cases can be investigated by An Garda Síochaná and where appropriate be the subject of criminal prosecutions.
Research carried out by the PIC and independent consultants has highlighted a lack of consistent and detailed industry-wide coding of injury data. Accordingly, the PIC recommends that insurers and other relevant parties consider adopting the same internationally recognised injury coding system. It is suggested that the appropriate system to be used is the World Health Organisation’s ICD-10 system. ICD is the international standard for reporting diseases and health conditions and the diagnostic classification standard for all clinical and research purposes.
10. The PIC recommends that the insurance industry establish a national medical research study on the prevention and management of soft-tissue (‘whiplash’) injuries. This research should be published as a means of facilitating evidence based improvements in approaches to treatment, informing policy and delivering benefits to consumers, business and wider society.