We have all seen our car insurance premiums increasing year by year. Charities, voluntary groups, sports clubs, leisure companies and many other businesses are faced with soaring public liability insurance. Insurance companies state that the level of pay–outs for injuries is much higher here than in other jurisdictions, and that this adds to the cost. To help to tackle this, the government is reconstituting how the level of awards are decided on.
In 2003 the government set up the Personal Injuries Assessment Board (PIAB) to assess compensation for victims of workplace, vehicle and public liability accidents.
It is an independent state body who’s aim is to remove the huge cost of legal representation and to provide fair compensation. Previously, up to half of all compensation went to paying legal costs. The legal system was the big winner here.
Currently, compensation is guided by the “Book of Quantum”. This archaic sounding book gives monetary guidelines for a variety of injuries and takes into account the severity and the length of time it takes to recover.
This system worked very well in the early years after its introduction. Most claims were fully processed by the PIAB, and legal costs were kept low. However, over time, more and more claims went to court. Compensation levels awarded by courts appeared to exceed payments decided on by the PIAB.
This is despite a recent report from the Central Bank on car insurance claims demonstrating that people were barely if at all better off for pursuing their case through the courts, and often ending up waiting “twice as long for an almost similar-sized settlement”. The cost of settling claims through litigation accounts for over 60% of the actual compensation, while legal costs in PIAB average around 4% of awards. Claims involving litigation take an average of over 4 years, as against under 3 years when dealt with by PIAB.
A new system for compensation
New Personal Injury Guidelines have been agreed by the judiciary, but legislation is needed to put them into effect. The Minister for Justice has stated that the changes will be implemented as soon as possible and will apply to all cases not yet assessed by the PIAB.
These guidelines will be used by both PIAB and the judiciary. It is expected that parties involved in claims will have confidence in the process and there will be no benefit in taking a case to court.
A new aspect of the compensation system is that if a judge decides on payment outside these guidelines, he/she must state clearly their reasons for doing so. This will add transparency which the system is currently lacking.
Under the proposal, all personal liability cases must first come through the PIAB unless the case has been settled between the claimant and insurer/respondents. If the claimant is not satisfied with the compensation, they may take their case to court.
Going the PIAB route is very cost effective. For claims submitted by post or email, the cost is €90 while the charge using the online form is €45. The charge to the respondent is €600.
The use of a legal representative is not necessary, but some may choose to do so.
- The claimant completes the online form
- The respondent is notified of the claim
- The respondent (or their insurer) agrees to use the PIAB process
- PIAB may appoint an independent medical examiner
- PIAB examine the claim and decide the amount of compensation
- The claimant and respondent agree to accept this and the respondent pays the award
- If either rejects the award, the claimant can take the claim to court
The Book of Quantum does not make recommendations on amputations.
Whiplash is extremely difficult to assess. Medical professionals are reliant on the honesty of the injured person.
Generally speaking, compensation for minor injuries have been reduced, and other injuries have been adjusted to reflect compensation awards in Northern Ireland and the UK.
As stated earlier, these guidelines must first be legislated for. Legislation is already making its way through the Oireachtas, and the Minister has stated that the guidelines implementation is imminent. Cases that have not yet gone through the litigation will be processed through the new system with the PIAB.
The new Personal Injury Guidelines are expected to bring down the cost of insurance for both consumers and businesses. Claims through the court system should be in line with awards processed through the PIAB, reducing the incentive for people to go through the courts. Time will tell.
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