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Our payouts are three times that of the UK, so why wouldn't whiplash legislation work here?

Britain and Ireland are currently the outliers of Europe when it comes to soft tissue injury claims, and the UK has announced plans to cap whiplash payouts via legislation.

shutterstock_704231407 Source: Shutterstock/Daisy Daisy

THE HIGH COST of car insurance in Ireland is a perennial social bugbear here.

There are many factors behind the elevated rates seen. One of the most significant is the matter of heightened insurance payouts for soft tissue injuries, commonly known as whiplash.

Whiplash accounts for about 80% of personal injury claims stemming from vehicular collisions in Ireland. They are often settled without a claimant having to present medical evidence of their affliction.

Britain and Ireland, meanwhile, are the outliers of Europe as regards the size of the payouts doled out by their courts. The average settlement for a whiplash injury in the UK is in the region of €7,000 (£5,000 sterling).

In Ireland? It’s about three times that figure (between €15,000 and €18,000).

Recently, UK justice secretary David Gauke declared his intention to bring in legislation governing civil liabilities through the House of Lords. The bill will seek to place caps on the compensation payable for soft tissue injuries sustained in driving collisions, as well as requiring the injured to provide medical evidence as to the severity of their discomfort.

Soft tissue claims are roughly 50% more numerous in Britain than they were 10 years ago. Conversely, the number of fatalities and accidents on British roads is falling.

“We are putting this right through this important legislation, ensuring whiplash claims are no longer an easy payday. The bill will seek to set fixed amounts of compensation for whiplash claims and the halt the practice of settling whiplash claims without medical evidence,” Gauke said last month, while predicting.

So, given the situation is even more strained in Ireland, (where the number of claims is down, but the size of payouts continue to increase), what’s to stop legislation from being introduced here to put a stop to a predatory claims industry taking advantage of a lack of clarity regarding how such injuries should be handled by the law?

Softly softly

In recent years the Irish government has recognised that there is a certain urgency to the issue. Its response has been something of a softly softly approach however.

Two years ago a new book of quantum, that which documents the prevailing trends in injury awards, was produced for the first time since 2004.

In January 2017, the cost of insurance working group filed a report on the issues facing the motor insurance industry here. One of its recommendations was the establishment of a Personal Injuries Commission (PIC), a suggestion subsequently actioned with former High Court Justice Nicholas Kearns at the helm of the new commission.

2 Justice Nicholas Kearns Source: Rollingnews.ie

The PIC published its first report last December, which looked at international best practice as regards the motor insurance claims industry, and made certain specific recommendations, such as calling on Irish insurers to publish their claims data as standard to shed some light on the murkiness surrounding the level of settlements here (for the PIC’s current reporting, insurers here have given it access to claims data regarding soft tissue injuries for 2015 through 2017).

It also suggested that medical professionals filling out personal injury reports should be fully trained and accredited, and that claims should be directly relatable to the severity of an injury.

However, most importantly, the report recommends that Ireland adopt an international grading standard for soft tissue injuries, the Quebec Task Force Whiplash Associated Disorder (QTF/WAD) standard, which assigns five levels to soft tissue injuries. In essence, such a move would establish a level of verifiability to whiplash claims – the gravity of such injuries being notoriously difficult to quantify.

It is the commission’s next report (due sometime in the next two months) which may well ramp things up a little – for it will deal with the idea of benchmarking whiplash claims against international levels.

“Independent consultants are currently carrying out the validation of relevant data received and are working with the Personal Injuries Commission on the benchmarking exercise,” a spokesperson for the PIC told TheJournal.ie.

This report is expected in quarter two of 2018 subject to the completion of the verification exercise and will include any recommendations arising from the deliberations of the commission.

However, regardless of what recommendations the PIC makes, those suggestions still need to be adopted by the government.

“The government doesn’t have to accept it, no,” says one insurance industry source. “But it would have to find a reason not to do so. And certainly at present there is a correlation between high payouts and fraudulent activity.”

Personal Injuries Assessment Board

In discussing the idea of capping whiplash claims with legislation, it’s important to remember that one bill is already in front of the Oireachtas. It relates to increasing the powers of the Personal Injuries Assessment Board (PIAB), most specifically by allowing the board to enforce compliance among claimants when it comes to attending medical assessments or when requesting evidence of special, severe damages.

However, while that bill has yet to make its way into becoming legislation, the actual level of payouts being distributed by the judiciary would not be affected.

So, assuming the Personal Injuries Commission’s findings regarding benchmarking are not accepted by the medical community, or the injuries board itself, why would legislation, akin to that being proposed by Gauke in the UK, not be a valid option?

It’s a difficult question to find an answer to.

“It’s a hard one,” says another source within the industry. “The current levels of awards reflect consumer expectation. If someone is getting x amount, you’ll want to get something comparable. It’s established precedent. It is very difficult to say we’re going to go to UK levels.”

With the Personal Injuries Commission we don’t know what the outcome is going to be. It’s not for insurers to decide, it’s for society to decide what is an affordable level of award.

The same source stresses the “urgency” of the rate of reform here, adding that the best way to rectify the situation is to strengthen the powers of the injuries board.

90399629_90399629 Source: Eamonn Farrell/Rollingnews.ie

“In terms of the level of awards, everyone has the right to pursue a claim if they believe that’s the best outcome for them. Our view is you have a process, but ultimately we want to see consistency. The best way to do that is to rework the injuries board.”

For the moment, the industry bodies here seem happy enough with the progress being made. Insurance Ireland describes the first report of the PIC as “an important first step”, but adds that “we should accelerate the pace of reform to ensure we don’t let this opportunity pass”.

The Motor Insurers’ Bureau of Ireland (MIBI – tasked with compensating the victims of road traffic accidents caused by uninsured and unidentified vehicles) meanwhile describes the PIC’s first report as “strong and progressive”.

“By bringing in this more sophisticated approach to categorisation it provides all involved with a better understanding of the severity and complexity of the injuries sustained, which should help ensure that claimants are fairly compensated,” says CEO David Fitzgerald.

You get the impression that the goings-on at State level, not just in Ireland but in the UK too, are being watched with hawk-like levels of scrutiny.

“Our long-held view is that we need to take volatility out of the claims environment and to do this, we urgently need to bring consistency to award levels and to benchmark our award levels with comparable countries, like the UK,” says an Insurance Ireland spokesperson.

The defining issue in the Irish motor insurance market is the cost of claims and the UK Government’s decision to introduce fixed amounts of compensation for whiplash could provide a template to address the rising cost of claims in Ireland.

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