Speech
Speech by Minister Robert Troy on the Personal Injuries Assessment Board (Amendment) Bill 2022 in Seanad Éireann
From Department of Enterprise, Trade and Employment
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From Department of Enterprise, Trade and Employment
Published on
Last updated on
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Thank you Leas Cathaoirleach.
I would like to thank Senator Mullen for bringing forward this legislation and welcome the opportunity to be in the Seanad this evening to discuss the Bill, and to hear the contributions of Senators.
As previous speakers have said, it is timely and important legislation, and I very much share his ambition for positive change in this space.
Senators will be aware that I have today published the General Scheme of a Bill to enhance and reform the Personal Injuries Assessment Board. The General Scheme relates to commitments in the Programme for Government and the Action Plan for Insurance Reform, and reflects my ambition to increase the numbers availing of the PIAB model and to reduce the need for costly litigation
Many of the speakers today have pointed to the importance of businesses, consumers and community and voluntary groups being able to get insurance at a reasonable price. I wholeheartedly agree with them.
For too long, the cost and availability of insurance has had a negative impact on our economy and our society, particularly for SMEs in rural Ireland.
While I would wish for it to be a simple and quick fix – that is just not the case. It requires action, and sustained action at that.
This government’s Action Plan for Insurance Reform does this. With 66 actions to be delivered across Government, it is one of the most important programmes that this government will undertake.
We have made progress in delivering principal actions including:
Government has been clear that the reason we are undertaking reforms and changes was so that insurance would become more available and affordable for motorists, homeowners, and businesses. As these reforms are being realised, we expect the insurance industry to do what it is supposed to do and what it said it would do, which is to pass on savings and reduce premiums for motor and home insurance and for employer liability, and public liability.
Reform of PIAB is another important instrument for change in the personal injuries sphere. Since its establishment, the PIAB model has delivered major benefits by providing a low-cost, quick, and fair option for injury compensation.
The Central Bank’s reporting under the National Claims Information Database and most recently the Bank’s third private motor insurance report published in November 2021 shows the benefits of using PIAB. It shows the compensation awarded to claimants was broadly comparable, regardless of whether the case was finalised through PIAB or through litigation.
However, the legal costs associated with settling these claims through litigation were €16,064. This compares to legal costs under the Board of only €841. The time taken to resolve claims with the litigation model is 4.2 years with claims settled through the Board taking 2.3 years.
The NCID reports make clear that in overall terms, the Board offers the most cost-effective settlement channel in terms of Injury Claimant Settlements. But they also show that only 15% of motor claims in 2019/2020 and 12% of EL/PL claims in 2019 settled through the Board.
As Senators have noted we know the number of cases being finalised through PIAB has fallen. PIAB informs me that public health restrictions have led to a significant reduction in the number of road collisions during 2020 and in 2021.
These trends are similar for accidents in public places and places of work with many public places closed or limited in numbers and many employees working from home. This has resulted in a significant decline in personal injury claims to PIAB. Claim application volumes in 2020 were 16% lower than 2019 levels of 31,000. Applications in 2021 are estimated to have also reduced by approximately 20% compared to 2020 volumes down to 21,000 compared to 26,000.
While it is not fair to measure PIAB’s success or failure based on the number of claims it receives it is an important indicator of the personal injury landscape. It gives us insight into what can impact on the number of accidents occurring resulting in claims. This includes not only the effects of COVID I have mentioned earlier but also a potential means to increase awareness regarding accident prevention and risk assessment.
The impact of the Guidelines together with reform of PIAB should lead to greater use of the service provided by the Board, lower claim costs and facilitate a reduction in insurance premiums. This should contribute to reductions in insurance premiums for businesses, consumers and community and voluntary groups.
Given our shared ambition to improve the availability and reduce the cost of insurance I want to take this opportunity to inform the Seanad about my work in this regard, specifically to enhance and reform PIAB. Since taking office I have worked to develop proposals to have more personal injury cases resolved by PIAB in a faster timeframe and with lower costs compared to litigation. I have engaged with consumers, businesses, community groups and representative bodies such as the Alliance for Insurance Reform and the resounding message from all has been the urgent need for change in the personal injuries sphere.
Last year I launched a public consultation on measures to enhance the role of the PIAB. I am pleased to say that there was an excellent response to the consultation with over 240 responses received. These submissions reflected the consensus that the time is right to strengthen and enhance PIAB. At the same time, I was struck by the positive feedback received indicating that the service provided by PIAB is a valuable one and really makes a difference. This is again reflected in the Central Bank’s reports which show legal costs are 15 times greater when claims are settled via litigation rather than through PIAB and take almost twice as long to settle.
It is clear to me that PIAB has a valuable role to play and the General Scheme I have published today is the start of a process of legislative reform to enhance and strengthen the Agency.
The General Scheme proposes to amend the Personal Injuries Assessment Board Act 2003-2019 to increase the number of personal injury claims settled through PIAB and to avoid the expense and time associated with litigation. It provides that:
Given the provisions to extend the Board’s remit and give it new statutory functions to resolve personal injury claims I am also proposing to change PIAB’s name to the Personal Injuries Resolution Board.
A key reason for this is my proposal to introduce mediation into PIAB. This is a new function. The advantage of mediation is that parties can avoid potentially prolonged and costly litigation and may arrive at a mutually satisfactory outcome in a shorter space of time.
Mediation offered by PIAB will follow the recognised principles of mediation including being a fully voluntary process, ensuring confidentiality and impartiality and providing the opportunity for the parties to determine the issues that requiring resolving. Where the parties do not consent to mediation the existing process in respect of assessment of a claim remains.
An advantage of mediation is the ability for parties to get speedy access to a process that may produce a satisfactory outcome for the parties in a short space of time. Mediation will not affect the timeline for assessment of a claim.
The Board will remain obliged, under section 49 of the Principal Act to assess claims within nine months of confirmation of the respondent’s consent to the assessment process notwithstanding some exceptional circumstances provided for in the legislation.
Mediation is already successfully used by bodies such as the Residential Tenancies Board, Workplace Relations Commission and the Financial Services and Pensions Ombudsman as a means of facilitating the resolution of issues between parties and my proposals are modelled on existing legislation in respect of these bodies.
With the introduction of the Personal Injury Guidelines, a claim that has been assessed by the Board but then proceeds to litigation, will be considered by the courts using the same criteria and award levels used by the Board. The obligation on the part of the trial judge to have regard to the Guidelines is mandatory. Under the General Scheme proposed, I intend to strengthen and clarify existing provisions regarding costs in a court setting. The discretion available to the courts will be tightened regarding the award of costs against a claimant who has rejected a PIAB assessment and where the respondent accepted. Instead, the default will be for the courts to award costs against the claimant unless this would give rise to an injustice. This should encourage certain classes of personal injury claim to be settled without the need for more costly litigation.
While developing the legislation to enhance and reform PIAB has taken a little longer than I would have liked I believe it is important that when we legislate to reform PIAB we will have gone as far as we can in terms of strengthening the Agency to ensure more cases are settled through PIAB without recourse to expensive litigation.
On foot of stakeholder engagement, I considered at some length and in detail the potential to reform PIAB as a quasi-judicial body. The potential to legislate that a claimant/respondent could only appeal a decision of the Board on a point of law was fully explored. However, informed by the advice of the Attorney General I have not been able to take this approach forward. This is because such an approach would not be compatible with the Constitution as it would impinge on the constitutional right of access to justice delivered by the courts as well as the primacy of the courts regarding the administration of justice, particularly with regard to a body of common law.
As I said earlier, the General Scheme is the starting point for reform, and I will continue to explore all avenues and suggestions to enhance the Agency.
Turning to the specific provisions of the Bill which Senator Mullen has introduced. The Bill proposes to provide penalties for knowingly giving false or misleading information to PIAB during an application for, or the assessment of, a claim for an award for personal injuries.
As Senators will know, through PIAB, certain classes of personal injury claims, where liability is uncontested, can be settled on a consent basis without the need for litigation.
By proceeding with the PIAB process, the respondent (generally an insurer) would have considered the claimant’s case and satisfied itself of the bona fides or otherwise of it. Where liability is an issue, or the circumstances of a claim are disputed, the respondent will refuse an assessment by PIAB of the claim so that he/she can investigate the matter. In those circumstances PIAB will release the case and provide an authorisation to a claimant to proceed to litigation if they so wish.
The PIAB Acts do not provide for any penalty or sanction in relation to the provision of misleading or false information to it. This is because PIAB does not investigate the circumstance of claims or address the issue of liability. However, where there are suspected fraudulent claims, there is an onus on the respondent to report such suspected fraudulent claimants to An Garda Síochána to enable the successful prosecution of fraud offences.
Where PIAB is made aware of suspected fraudulent activity, it reports the matter to An Garda Síochána. The determination of whether fraud has taken place is by its nature a matter of judgment for which a Court is the appropriate body, and which can consider the relevant matters presented to it by all parties.
As the Senator is aware, there is already a significant body of legislation which deals with fraudulent personal injury claims, both where an alleged fraud has taken place regarding information supplied in proceedings before the courts as well as suspected fraud outside of the litigation system. This legislation includes the Criminal Justice Act 2011, the Criminal Justice (Theft and Fraud Offences) Act 2001, the Civil Liability and Courts Act 2004.
The Department of Justice has examined deterrents to insurance fraud, including penalties for insurance fraud, in consultation with relevant agencies. An important milestone was achieved in 2021 with the enactment and commencement of the Perjury and Related Offences Act 2021, increasing the range of options for investigation, prosecution and penalties on conviction which can be considered of those making false and misleading claims.
The Action Plan for Insurance Reform contains several actions relating to fraud. Most notably, the Garda Insurance Fraud Coordination Office was opened in July 2021. The establishment of this office will improve cooperation and coordination with the Insurance Industry, bring consistency to the handling and investigation of insurance fraud referrals and should facilitate more cases being referred to the DPP for prosecution. The enforcement of existing provisions already on the statute book will be kept under review.
Government fully appreciates the intentions of the Senator’s Bill. Fraudulent claims should be dismissed by the Courts and - where appropriate - fraudsters should be prosecuted.
I believe there may be merit in introducing an offence concerning the provision of knowingly false information to PIAB along the lines of the Bill.
I will however need to consider how the proposed provisions might interact with the provisions under existing legislation. These will need to be examined to determine if the effect of the proposed provisions of this Bill provide additional benefits or merely duplicate existing provisions under which PIAB can currently refer suspected cases of fraud for investigation by An Garda Síochána. Consideration will need to be given as to how fraud would be detected, investigated and the legislation enforced. When I have examined the matter and if there is merit in introducing these provisions I will revert with proposals to Government.
If there is a gap in PIAB’s legislation I will move to fix it.
To conclude, Cathaoirleach, I would like to thank Senators for their valuable contribution tonight.
I believe that greater utilisation of the PIAB process, alongside consistent implementation of the Personal Injuries Guidelines, will increase the number of personal injury claims settled through PIAB and ensure that insurance products are available and affordable for all businesses and consumers.
I am determined that legislation to strengthen and reform is progressed as soon as possible, and I look forward to constructive engagement with Senators on this.
The proposals to enhance the Agency are a new direction to address issues in the claims environment. I have said before, Government does not have a monopoly on good ideas and we are willing to work with members of both Houses to progress reform.
I wish to acknowledge Senator Mullen’s positive and constructive engagement with me to date and I want to ensure that this positivity and constructive debate and engagement continues as I progress legislation to enhance and reform the Personal Injuries Assessment Board.