Bill to cap insurance payouts for personal injury claims passes second stage in Seanad

A BILL tabled to cap the level of insurance payouts for personal injury claims has passed second stage in the Seanad.

It received widespread support and will now go to committee stage.

The aim of the bill is to ensure the cost of insurance cover is reduced for motorists, businesses and farmers.

Called the Civil Liability (Capping of General Damages) Bill 2019, it is being promoted by Fine Gael’s Senator Tony Lawlor.

Speaking during a debate on the bill last week Justice Minister Charlie Flanagan described the insurance industry as highly profitable and said there was scope to cut premiums.

He said jobs were at risk from soaring premiums and the inability of some companies to get cover.

The level of awards in personal injury cases was too high and needs to be addressed, the minister said.

Addressing the Seanad on a bill that aims to cap injury awards, Mr Flanagan said the latest data for the industry showed insurers making healthy profits.

“The annual profits of ten major insurance companies amounted to between €6.1m and €201m at the end of 2017 with the total assets of insurance corporations reported by the Central Bank to be €305bn at the end of last year.”

Businesses, particularly those in the leisure and child activity sectors, are closing due to soaring premiums, with many unable to get cover. Their insurers blame high and inconsistent injury awards in the courts.

Senator Lawlor’s bill has the support of business groups Ibec, Isme, the Licensed Vintners Association, famers’ lobby group the IFA and Insurance Ireland.

The Lawlor bill comes months after the Government-appointed Personal Injuries Commission found that award levels for minor injuries in this country are almost five times higher than in the UK.

The commission, headed up by former High Court President Mr Justice Nicholas Kearns, has advocated that a judicial council made up of judges should recalibrate awards levels.

But the legislation to put a judicial council in place has been delayed.

Insurers have consistently argued that the cost of insurance is directly related to high levels of awards made in the courts.

There are suggestions that the Lawlor compensation-capping bill will have to be referred to Attorney General Seamus Woulfe as the legal lobby has suggested it may be unconstitutional.

Business lobby group Isme dismissed claims that the legislature could not dictate to judges on award levels.

Chief executive Neil McDonnell said the principle that awards for general damages can be capped has been conclusively established in Irish case law and in statute.

“The legislature routinely decides the sentencing tariffs to be applied in matters of criminal and road traffic law. The principle is no different here,” Mr McDonnell said in a letter to the Government.

However, lawyers are expected to question the constitutionality of the bill, if it is passed by the Oireachtas, and argue that injury awards constitute property rights.