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Referendum on insurance payouts can't be ruled out if reforms don't work, says Varadkar

The Taoiseach said the insurance industry must play its part in decreasing premiums.

Image: Shutterstock/Monkey Business Images

A REFERENDUM ON capping insurance payouts can’t be ruled out in the future if reforms of the industry fail, Taoiseach Leo Varadkar said today. 

He told the Dáil that a “huge issue” remains when it comes to reducing the cost of public liability insurance for business and voluntary organisations.

Varadkar said the government has asked the Law Reform Commission to undertake a detailed analysis as to whether “constitutionally sound legislation” to cap or limit the amount of damages a court may award can be introduced. 

He said public consultation on that matter will take place later this year.

“It will be interesting to see what the Law Reform Commission comes up with because if the other reforms do not work, we need to consider the possibility of legislating in this House to limit and cap awards.

“We should not rule out a referendum down the line if the existing reforms that are planned do not work,” he said.

The Taoiseach also said the government is taking strides to improve matters, stating that the  Judicial Council Act will now allow for the establishment of the judicial council.

Once set up, a personal injuries guidelines committee can begin to draw up new guidelines as to the appropriate awards to be given to people who suffer injury as a consequence of negligence or a failure of duty of care on the part of others.

These new guidelines will replace the book of quantum, which currently set out the level of awards people should be awarded in the courts.

While Varadkar said the government cannot interfere directly in any way with the deliberations of the judicial council and its committees, the objective is to bring the kinds of awards people get for injuries in Ireland more in line with those in other countries.

“We then expect the insurance industry to respond by reducing premiums,” he told the Dáil. 

The Taosieach said the engagement is currently underway between the Chief Justice and the Attorney General to ensure the judicial council is set up before the end of the year, stating that a budget of €1 million has been set aside in Budget 2020.

“I hope that once the new guidelines are in place, and even before then, judges will recognise the importance of having reasonable guidelines and awards that are in line with international norms because high payouts have a real-world impact.

“This is not just about the plaintiff in question; it is also about the wider impact on society. Very high payments coupled with very high premiums in Ireland are having a real impact. They are causing businesses to close, jobs to be lost and sporting, leisure and musical activities that take place in other countries to be unviable in Ireland.

“That is wrong, and we need to consider the wider social and economic impact of high awards on people in general,” he said 

The Taoiseach called on the judiciary to proceed “without delay” in establishing the judicial council and replacing the book of quantum with a schedule of awards “that are more realistic and more in line with those of other countries”.

The insurance industry also has to play its part in bringing down premiums and reducing its profit margins, he said, adding that the gardaí are stepping up its activities in the investigation of fraud. 

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