The Gazette 1996

GAZETTE

NOVEMBER 1996

V I E W P O I N T Rabbitte's caution on capping vindicated by Deloitte & Touche report

sense in economic terms even apart from the primary issue of justice. In this regard it is worth quoting in full three consecutive paragraphs from the report's executive summary. "The report's analysis of High Court cases found that, contrary to the general perception, the majority of High Court awards of general damages in the most serious ipjury cases, clustered around an average level of approximately twice the level of average industrial earnings. Very high awards (in excess of £60,000) were the exception rather than the rule. "A comparison of the High Court awards with the UK "Guidelines for the Assessment of Damages and Personal Injury Costs" found that 85% of the Irish High Court awards examined fell within the range o^he UK guidelines. y x "In the light of the analysis of High Court awards for general damages, the report found that there was no valid case for introducing a capping regime for general damages in Ireland. Moreover, there would be no guarantee that the introduction of a capping regime would lead to reductions in insurance premiums in Ireland". On the comparison of Irish legal costs with those which prevail in the United Kingdom, the report says: "It would seem that legal costs in both jurisdictions are broadly comparable in that more expensive solicitors' fees in the UK are offset by greater involvement of solicitors and barristers in Ireland". On the much attacked "no foal, no fee" arrangements between solicitors and their clients, the report concludes that:

"Before the inquiry was set up, there was a considerable amount of concern centering on expensive legal procedures, the cost of motor cover (particularly for young males up to the age of 30) and the belief that awards were grossly out of line with settlements in other countries. The broad sweep of the report effectively undermines all three contentions." - Irish Times Editorial following publication of Deloitte & Touche report When Mr Pat Rabbitte became Minister for Commerce Science & Technology in December 1994, his in-tray contained a well advanced proposal for legislation to cap the level of general damages which the courts could award as compensation to the victims of personal injury caused by the negligence of others. A powerful lobby of industry, public authorities and insurance interests, backed by an uncritical media, had apparently persuaded both political and departmental policy makers of the validity of contentions such as those above which the Irish Times now recognises to have been "effectively undermined". No Minister could be in any doubt as to what, at least in the short-term, would be the overwhelmingly popular approach to take on this issue. Public opinion had been inflamed by an apparently endless series of articles on "our compensation culture", full of one-sided reports of supposedly "true" cases. Most insidiously of all, these reports were typically laced with often mutually contradictory and now demonstrably spurious "statistics" about how Irish court awards were, for example, four, five, six or more times greater than those made in the courts of the United Kingdom and other countries. "Capping" was obviously the answer if only the relevant Government Minister would stop stalling and get on with it. This siren call of guaranteed political popularity, at least in the short-term, through the introduction of capping

Commerce, Science and Technology Minister Pat Rabbitte. legislation, must have been difficult to resist for any politician. It is to the great credit of Minister Rabbitte that he did resist it. He applied his own judgment to the so-called evidence for capping and concluded it was at best anecdotal and certainly was insufficient to form the basis for the policy decision which vested interests were urging him to take. He decided to commission Deloitte & Touche to prepare a report which would seek to distinguish fact from fiction in the propaganda with which he and his predecessors had been assailed. He insisted that Government policy on this matter should be founded on professional research rather than on myth. If, as appears to be the case, the Government has accepted the finding of the Deloitte & Touche report that there is "no valid case" for capping personal injury compensation awards in this country then the public interest has been very well served by Minister Rabbitte's caution and political courage. In its submission to Deloitte & Touche, the Law Society argued that the introduction of a capping regime would almost certainly lead to injustice for people who had sustained injuries through no fault of their own. The Society was convinced, in addition, that the crude capping proposal made no

"Subject to consumer safeguards there seems to be no reason why

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