The Gazette 1987

APRIL 1987

GAZETTE

system of trial) are not likely to pro- vide any great savings that will be noticed in insurance premiums. The insurance industry itself has admitted this in the recent debate on the Government's proposal to abolish juries in civil cases. More- over, the most recent study of the English system, where there is no jury trial, concluded that the fault system is inefficient, dilatory and disproportionately expensive. (Lord Chancellor's Dept., Civil Justice Review, Consultation Paper: Per- sonal Injuries Litigation, Feb. 1986, p. 36). From this is it clear that the inefficiency and the expense associated with the system are not caused by the presence or absence of the jury trial, but rather by the "fault system" which is present in both jurisdictions. It is submitted, therefore, that the best way of handling the un- insured driver problem is to intro- duce a major reform which would move away from the fault system to a strict liability or no-fault system. Pending the introduction of such a major reform — which would prob- ably meet with a lot of resistance from vested interests — the follow- ing suggestions might be con- sidered within the present fault system: It is suggested that most motor accident cases in Ireland are heard at a very high level of adjudication (frequently in the High Court) while the comparative situation in most other European States is that such cases are settled at a lower level, thus incurring lower costs. The possibility of hearing such claims at a lower level of adjudication should be investigated further. The in- creased jurisdiction of the Circuit Court which can now hear cases up to £1 5,000 should have made a contribution on this matter. Un- fortunately, there are no studies done on the effect which this has had on keeping legal costs down. Moreover, it does not appear that litigants who bring their actions in the High Court and are awarded more than £7,500 but less than £1 5,000 are sufficiently penalised I n t e r im Re f o rms — Some Proposels A. Increased Hearings at Lower Level

for not commencing their action at Circuit Court level. They may still be given High Court costs. (See Section 17 of Courts Act 1981.) This certainly does not encourage litigants or their advisers to com- mence their actions in the Circuit Court. A greater contribution could be expected if the jurisdiction of the Circuit Court were raised to £30,000. B. The "Two Senior" Rule The necessity for a total of eight lawyers to be involved in the nor- mal High Court action should be discontinued. In particular, the " t wo Senior" rule should be aban- doned. This rule of practice among the Senior Bar could be dis- couraged by providing that the costs of t wo Seniors should not be allowed on taxation of costs unless the trial judge gives a special certifi- cate that the case warrants t wo seniors. The law of large numbers which states that the larger the group the more accurately the losses of the group can be predicted, is of course particularly relevant to the insurance industry which thrives on high degrees of certainty. There- fore, it is submitted that a common information bank should be estab- lished and that the possibility of establishing one insurance fund for all Irish motor risks should be examined. This need not be State run but could be an amalgamation of the compan i es presently operating in the area. Such a fund would benefit from higher certainty, economies of scale, and consistent policies relating to settlement, etc. Perhaps the companies involved in motor insurance should also, because of the smallness of the Irish market, explore the pos- sibilities of greater co-operation and information sharing. Care would have to be taken, how- ever, to ensure that competition would be maintained in this event and that a restrictive practice pro- blem would not arise. Rational resource pooling on a reasonable scale should help to reduce premiums. C. Greater Co-operation between Insurance Companies

Paul Romeril Consulting Litigation Engineer

has moved to:

1 9 Upper Pemb r oke Street, (off Fitzwilliam Square) Dublin 2. Our temporary telephone number is ( 01) 7 6 1 1 9 6 Consideration should be given to making insurance premiums tax deductible. Loss of revenue to the government could be recovered by taxing other motoring expenses more heavily (e.g. petrol). Thus there would not in the long run be a large change in the motorists outlay or government's income but the "avoidable" costs of motoring (i.e. insurance) would be reduced thus making it more attractive to abide by the law especially if higher fines are to be imposed, (cf. generally Posner, The Economic Analysis of Law). The increased costs will be in areas which the motorist cannot possibly avoid (petrol, oil, etc.). This should have the effect of promoting the desired result which is universal insurance. The added advantage is that the payment on the insured items is a voluntary one insofar as petrol, etc. will be bought only when needed and the burden of payment is spread over a period of time thus facilitating the less well off. The question of diminishing returns on petrol taxation is not within the scope of this submission except to suggest that such problems may be alleviated by the reduction in insurance premium costs. Abolishing the jury form of trial will not have any appreciable effect on insurance premiums. This has already been admitted by the insurance industry itself. This con- clusion is supported by an earlier s t udy on the problem: see McMahon, Judge or Jury? The Jury Trial for Personal Injury Cases D. Insurance Premiums might be tax deductible E. Abolish the Jury form of Trial?

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