The Gazette 1987

SEPTEMBER 1987

GAZETTE

their legal rights and because of contracting legal business in other areas, solicitors do not discourage litigation." It is essential that all parties involved in the legal process look closely at the present legal system to ensure that it is made more efficient and less costly to operate within. The only real point of debate, in my view, is how significant the reforms should be to achieve a more efficient and cost- effective system which will lead to lower claims' costs and therefore premium levels. Fault versus no-fault liability The desirability of replacing the present tort (negligence) system with a no-fault liability system is an argument which has been debated in many jurisdictions over the past twenty years or so. The O'Connor Committee of Enquiry into Motor Insurance looked at this issue in the early seventies and a majority recommended against it. The U.K. Royal Commission on Civil Liability and Compensation for Personal Injury also studied this question and its Report published in 1978, though somewhat divided on the issue, recommended the maintenance of the tort system coupled with a limited no-fault scheme providing compensation similar to that paid to injured employees under the U.K. In- dustrial Injuries Scheme. The U.K. Government never implemented this recommendation. Other countries and states both in America and Canada have introduced no-fault liability but I would hasten to add not all of these Schemes have led to the expected drop in premiums which their sponsors had predicted. It must be stressed at the outset that the introduction of no-fault liability, unless it is coupled with a very significant drop in the levels of compensation being awarded at present to injured victims, would lead to a very significant increase in the cost of motor and other forms of liability insurance. Under a no-fault system of liability all persons injured in road accidents would be entitled to claim full compensation, irrespective of their own fault. Consequently, plaintiffs, who currently cannot claim compensation under the tort system because they were res-

ponsible for the accident, or canonly claim partial compensation due to their own contributory negligence, would be able, under a no-fault system, to claim full com- pensation. No-fauft liability systems, in as far as my research has shown, usually incorporate an agreed schedule for compensation both in respect of loss of earnings and lump sum payments for certain types of non-pecuniary compen- sation. As a result, the need to involve the legal profession in such a system is significantly reduced, thereby producing a substantial saving in legal costs. This I believe is the position in New Zealand and I was surprised to read Mr. Coghlan's statement that lawyers continued " to play a prominent part in dealing with claims" brought under the New Zealand system. It should not be overlooked that in Ireland we already have a limited form of no-fault compensation under our social welfare system and there is every likelihood, if a more specific no-fault compen- sation system for road and other accidents were introduced, that it may be linked to our present social welfare system. An interesting constitutional issue arises in relation to no-fault compensation. Would it be possible under our Constitution to introduce a scheme restricted to motor and work accidents or could it be argued that victims of all accidents, be they at home, in public places etc., should be equally entitled under the Con- stitution to the same system of compensation? The cost impli- cations of a general no-fault scheme for all accidents needs no emphasis. The insurance industry does not feel that such a radical departure from the present tort system is necessary in order to contain and ultimately reduce insurance costs. We feel that the introduction of major reform to the present legal system would lead to a material reduction in claims costs. We would also question if a move away from the tort system is in the public interest. The present tort system does create for the individual an awareness of his responsibility to his fellow citizens. The maintenance of the tort system under which the individual

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