The Gazette 1985

INCORPORATED LAW SOCIETY OF IRELAND GAZETTE Vol. No. 79 No. 3 April 1985

Insuring Justice?

T HE well orchestrated campaign promoted by the motor insurers seeking an alleviation of their financial plight appears to be meeting with some success, if recent reports in the media are correct. That much is wrong in the field of motor insurance is undeniable; that the true causes are those seen by the insurance industry is perhaps less certain. An authoritative US source has noted that insurance companies complain most about the cost of claims when investment income falls. Could this be a factor in the Irish situation? Before accepting all the arguments made by the insurers it may be well to look at them more closely. One cannot be disputed: the high percentage of drivers who are uninsured. This is a national scandal, and efforts to tackle it seem to be inhibited by the belief, sustained by the "clientism" of many of our legislators, that all persons over 18, regardless of their records as drivers or the condition of the vehicles they wish to drive, are entitled to insurance cover. The burden of coping with the uninsured driver ends up with those who are honest enough to insure themselves as the insurers pass on to such persons the cost of contributions made by the insurers to the Motor Insurance Bureau of Ireland. This same principle has recently been applied, with dubious morality, to the funding of the PMPA. Quite why the industry should be obliged to bear the expense of bailing out a company which has run into serious difficulties when the statutory monitors seem to have so clearly failed in their duty to police the industry is hard to understand. The extravagant awards of juries are cited as another source of excessive cost. The example of the UK is thrown up as a comparable jurisdiction where awards are substantially lower than in Ireland. Awards in personal injury cases have been made by Judges only in the UK for over 30 years and it is undeniable that awards there are lower than in this country. This does not, however, warrant the conclusion that awards in the UK are at the correct level. There is one notorious factor which may be largely responsible: the petrification of money values in the judicial mind. This is most obvious in the criminal or quasi criminal area where the same fines are applied by Judges in their 10th and 20th year on the Bench as in their

first. The phenomenon is noted in other areas where money values are concerned. The UK figures for personal injury awards do not show that the awards have kept pace with inflation. Is the call for consistency in awards in truth a call for lower awards? If there were not a reasonable consistency about jury awards in Ireland how would such a high percentage of cases be settled. In the recent High Court sessions in Dublin only 37 cases went to a hearing while 422 were settled. In passing it may be noted that the evidence from Dublin Circuit where a number of judges hear personal injury cases without juries does not suggest that consistency in awards automatically results from the absence of juries. In retaining the jury system two changes might be considered, the first, advocated by the Prices Advisory Committee in its 1982 Report being that the Jury should be allowed to be given an indication of the general level of awards for the type of injury involved in their particular case; secondly, in serious injury cases including para and quadri-plegic cases, as has been suggested before in these pages, the vast awards should largely be replaced by annuities of sufficient level to maintain the injured party and to provide all necessary medical services. Too often the financial benefit intended for a young person who was almost completely incapacitated ends up with the next-of- kin when the life expectancy figures prove over optimistic. Even more tragic are those cases where the award proves inadequate to meet the victim's long term needs. Finally, there are the legal costs; if these are high, as they are, the remedy lies largely with the insurers. Early settlements, more front end loading of Counsel's fees, a less cosy relationship between claims managers and the kings of the round hall all might help to keep costs down. The "second Senior" syndrome would vanish if cases wére settled earlier and fewer set down for trial. There are hopeful signs of improvement in the settlement rate and a falling off in the number of High Court Writs being issued. Would it be too unfair to accuse the insurers of taking advantage of yesterday's less serious problems which are seen to be in decline to gain an advantage for the morrow? • 81