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Thursday 7 December 2023 Dublin: 10°C
Shutterstock/Monkey Business Images File photo. Payouts for whiplash can extend into the tens of thousands.

'The elephant in the sitting room': Long-awaited report on injury payouts could have 'dramatic' effect on premiums

The Judicial Council’s Personal Injuries Guidelines Committee is expected to publish its guidelines in October.

THE LONG-AWAITED report from judges on the awards made in personal injury claims should lead to an “immediate impact” on insurance claims and premiums, advocates have said.

Due in October, the report from the Judicial Council’s Personal Injuries Guidelines Committee will provide new draft guidelines to replace the guidance in the Book of Quantum.

Businesses are hoping the judges “reflect the common good” by lowering the guidelines on payouts in personal injury claims, and that these changes can be implemented soon.

“If general damages for minor injuries aren’t dramatically reduced, we’ll be in the same place in 12 months’ time,” Peter Boland of the Alliance for Insurance Reform told

“It’s been established by numerous studies that general damages for personal injuries is at the heart of this crisis. This is the elephant in the sitting room.”

The long-awaited report by members of the judiciary follows a number of years of calls for action from government, and also follows a recent court case which highlighted an intervention from a judge on the proportionality of awards in personal injury cases.

‘Should not be a lottery’

Earlier this week, reported on a case where a whiplash award was reduced from €76,000 to €41,000 by a Court of Appeal judge who remarked that personal injury litigation “should not be a lottery”. 

Mr Justice Seamus Noonan noted: “Ultimately each member of society must bear the cost of a compensation system whether through the payment of insurance premia in the case of private defendants or taxes in the case of public defendants. Society thus has a direct interest in the level of awards.”

The issue of tackling the high cost of insurance was seen as a priority going back to the beginning of the last government in 2016. 

After bottoming out in early 2008, motor insurance prices began a steady climb which eventually saw premiums doubling by mid-2016, according to CSO stats. While CSO stats also suggest a drop since then, figures from the Central Bank show motor premiums have actually risen by 17% since 2016. 

There are no official statistics on other areas of insurance, such as public liability for businesses, but business groups and bodies have said for years that insurance costs have become far too high and have directly contributed to the closure of many businesses.

The Cost of Insurance Working Group was set up four years ago to formulate recommendations that would lead to reduced premiums for individuals and businesses. 

While the idea of Ireland having a “compo culture” that is the main culprit when it comes to high premiums isn’t borne out by the statistics, reducing the amount paid out as a result of claims has been pinpointed as a key measure in getting premiums down.

Speaking to late last year, the then-junior minister with responsibility for insurance Michael D’Arcy said the “biggest issue” remained the level of awards.

“I don’t want to see people getting a large amount of money for a very small injury,” he said. “I want that to end.”

Personal Injuries Guidelines Committee

One of the long-awaited measures to help do this was the creation of the new Personal Injuries Guidelines Committee under the Judicial Council Act 2019.

On that committee is a group of judges from the Supreme Court, Court of Appeal, High Court, Circuit Court and District Court.

They are tasked with preparing new guidelines on the level of damages awarded for personal injuries by courts in the State. Established on 28 April 2020, the committee had their first meeting on 7 May and is due to prepare its first set of draft guidelines on 28 October. 

For businesses waiting for their insurance premiums to drop, these new guidelines on personal injury awards cannot come quickly enough. 

Boland explained how the Alliance for Insurance Reform has put a countdown on its website till 28 October when that report is expected.

“It’s a very important date from our point of view,” he said. 

While what’s expected on that date is only draft guidelines, Boland said he’s confident that the judges will expedite the changes and that the insurance companies should react to them “immediately”. 

“If awards reduce dramatically, then premiums should reduce,” he said. “Insurance is based on future risk. We would expect them to react to these [guidelines]. We’d called on the government to get commitments from the insurers on the reductions we’d see.”

Last year, then-Minister D’Arcy sought exactly that from insurers – a commitment premiums would reduce if personal injury awards went down.

Boland cited a precedent set by the industry during a previous crisis over costs back in the early 2000s. On that occasion, the industry provided assurances that premiums would drop by a certain percent once the action it called for was taken. 

A separate report that could offer a legislative, rather than a judicial, solution to the high payouts is also expected soon from the Law Reform Commission in the form of a report on capping damages in personal injury actions. 

“Frankly, we don’t care what way it happens once it happens,” he said. “We can’t afford to pay the premiums we’re paying.

We’ve seen many friends close their business in the meantime waiting for progress on this. Surprisingly, even during a pandemic when social and economic activity has plummeted, we’re seeing premiums rise. 

In a statement to, a spokesperson for industry representative body Insurance Ireland said that the industry was committed to working with the government and been clear that the cost of injury payouts was the “critical piece of reform in terms of dealing with the issue”. 

The real effects of claims inflation are seen in lower-value, high-frequency injuries like whiplash. According to the Personal Injuries Commission, 8 out of every 10 motor injury claims are for whiplash and our average award is 4.4 times what it is in the UK.

Insurers have committed to passing on savings to consumers arising out of reductions in the cost of claims. Competitors in the market will act independently but the evidence on this is clear. The last time we got to grips with costs through legislation with the foundation of the Personal Injuries Assessment Board in 2004, insurers responded, and customers benefitted.

The spokesperson added that industry officials met with ministers within the Department of Finance at the end of July, they also hope to “engage with the Cabinet Sub-Committee on Economic Recovery and Insurance Reform in Quarter 4 on the issue”.

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