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Commission outlines options to cap the amount of damages awarded in personal injury claims

Soft tissue, or whiplash claims, are the most common claims made in Ireland.

Image: Shutterstock/Monkey Business Images

THE LAW REFORM Commission has today published a report which examines the legislative models that could be introduced to cap the amount which is awarded in damages during personal injuries claims. 

It follows a recommendation that the Commission should examine whether a cap on damages awarded in personal injuries cases would be constitutional or desirable, by the Costs of Insurance Working Group (CIWG) and the Personal Injuries Commission (PIC). 

The CIWG was set up in 2016 by the Department of Finance to address the rise in the cost of insurance premiums affecting a number of societal groups including motorists and businesses. 

A report from that working group lead to the establishment of the PIC, which examined how Ireland compared to other countries by clinical standards, particularly when it came to soft tissue or whiplash injuries, which is the most common personal injury claim.

The Law Reform Commission has outlined four ways in which caps could be introduced to limit the awarded damages in personal injury claims. 

  • The first approach would see a new scale implemented and damages awarded by the court through a proportionality test on that scale.
  • The second approach looks to elements of legislation in the UK and Australia, which would see a scale introduced, similar to the first option, but with the Oireachtas damages awarded at each point on that scale. 
  • An alternative option would be to have a scale, similar to the first two suggested options, with delegated official or body, such as a minister or regulatory-body, assigned to set the caps. 
  • The last option outlined by the Commission would essentially retain the current structure, with the courts deciding how much should be awarded in damages. 

Claims in Ireland

In 2018, the Courts Service recorded 22,049 personal injuries cases across the courts system in Ireland.

There were a further 18,992 cases filed in 2015, 21,898 in 2016, and 22,417 in 2017.

Those involved in the insurance industry have called for caps on the compensation awarded in those cases which are successful – the highest amount awarded in damages last year was €15 million.

The Personal Injuries Assessment Board (PIAB) – an independent state body which assesses compensation claims – also received over 33,000 claims in 2018.

This is up on by around 1,500 on the same figure four years previous in 2014 when there were 31,576 claims made to the board. 

The debate around insurance claims and the knock-on effect these claims, and the respective compensation payouts, have on insurance premiums has lead to concerns that a ‘compensation culture’ has developed in Ireland. 

The German-based organisers of the popular annual Oktoberfest event in Dublin announced it would not be returning this year saying they were “not used to the claim culture that has developed in Ireland”. 

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The Ballina Salmon festival was another fatality of rising insurance costs when it announced it would not be proceeding this year. 

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