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Personal injuries awards drop 40% since new guidelines introduced

The Tánaiste said he expects the drop in award levels to be reflected in reduced insurance premiums.

Image: Shutterstock/Cascade Creatives

THE AVERAGE AWARD in personal injuries cases has dropped by 40% in the last five months following the implementation of new guidelines aimed at lowering insurance costs.

The latest annual report by the Personal Injuries Assessment Board (PIAB) – the state body which assesses personal injury compensation and main implementer of the guidelines – shows nearly half (48%) of claims are now under €10,000 compared to just 12% of awards previously.

The new guidelines, which came into effect in April and replaced guidance in the Book of Quantum, set out the level of damages that may be awarded or assessed in respect of personal injuries.

The PIAB report found that in the period from 27 April to the end of September, average awards reduced from €23,877 to €14,233 – an average reduction of €9,654 per award. The board estimates that 18% of awards are now under €5,000, and 30% are between €5,000 and €10,000.

The report, which is based on over 2,600 assessed claims, also shows that there has been a reduction in acceptance of awards by claimants and their solicitors over the same five-month period.

The PIAB estimates that the rate of acceptance of awards by claimants has dropped to 41%, which it said is traditionally over 50%.

2021-10-14_18-56-28 Source: PIAB

PIAB Chief Executive Rosalind Carroll said the report shows that the guidelines are having a very immediate impact on award levels but that it will take some time to see the full effects “particularly in respect of savings in legal costs and litigation”.

“As the cost of personal injury claims has been reported as an important factor in the price and availability of insurance, this report is good news for individuals, communities, and businesses who pay for insurance and ultimately for society,” said Carrol.

Carrol added that the reduction in acceptance of awards by claimants and their solicitors is not unexpected given the early nature of the implementation of the guidelines and the level of change.

“What is very important, is to get data on all the settlement channels, i.e., settlements with insurers and awards by the Courts, so that consistency and certainty, one of the objectives of the Guidelines, can be seen by all,” she said.

Reductions in award levels create the perfect environment for a reduction in insurance premiums. Combined with the overall sharp reduction in the number of injury claims in the last 18 months, this Report shows that overall claim costs are falling very significantly.

Reacting to the report’s findings, Tánaiste Leo Varadkar said he expects the “dramatic drop” in award levels to be reflected in reduced premiums for individuals, businesses and volunteer groups.

Varadkar said that Government will continue to work with the insurance sector “to make sure this is the case”.

“Premiums have been too high for too long. I know many businesses and volunteer groups also continue to struggle to find insurance too. These figures, published by the Personal Injuries Assessment Board today are really welcome and although we will continue to monitor the situation closely, they do show that the Guidelines are having an effect.”

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The Department of Justice is to submit a report on the impact of the Personal Injuries Guidelines at the end of this year

“We are liaising with PIAB and other stakeholders including the Central Bank, the Courts Service and the insurance sector to ensure it is informed by robust data and insightful analysis,” Minister of State at the Department of Justice, Hildegarde Naughton said.

In a statement, Insurance Ireland welcomed this morning’s announcement.

“While the PIAB rejection rate remains high at 60%, we believe the figures announced today are very encouraging,” the group’s CEO Moyagh Murdock said.

“Insurance Ireland is prohibited from commenting on future pricing, but we believe that meaningful reductions in award levels will lead to decreased volatility and increased competition in the market over time.” 

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Adam Daly

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