The UK and Canada are cutting the cost of processing claims - why can't Ireland?

AT ITS HEART the insurance industry is built around events that lack certainty with consumers willing, and sometimes obligated, to take out policies to ensure they are compensated if some undesired incident ever comes to pass.

An analysis of claims costs and awards for damages between different jurisdictions is notoriously difficult and leaves many attempts at such research open to charges of not comparing like with like. That said, our Noteworthy investigation yesterday found that total awards for personal injury cases fell 28% between 2014 and 2018; and that the average award dropped 19% during the same period.

The scale of the industry across Europe is impressive with motor insurance premiums worth €135.3bn in 2016 with total claims in the same year costing €103.5bn. Any claim related to soft tissue injuries is required to obtain a medical report from an accredited expert through MedCo, another portal system established in 2015 to facilitate the sourcing of fixed cost medical reports in whiplash injury claims.

MedCo said its purpose is “to improve the quality and consistency of medical reports and to remove potential conflicts of interest by ensuring there are no financial links between law firms and the medical experts who provide advice.

The Civil Liability Act 2018 which was passed in December and introduces a tariff scheme for soft tissue injury claims seen as a major attempt by the UK government to address the rising cost of motor insurance. Introducing the legislation in the House of Commons last year, the Lord Chancellor and Secretary of State for Justice, David Gauke, said it aimed to make the personal injury compensation system “fairer, more certain and more sustainable for claimants, defendants, the taxpayer and motorists.”

Although the PIC also recommended the establishment of a specialist fraud investigation bureau within An Garda Síochána that would be modelled on the UK’s Insurance Fraud Enforcement Department, the proposal has been rejected by the Garda Commissioner Drew Harris who voiced his preference for the problem to be tackled on a divisional basis rather than through a centralised unit.

The guidelines are reviewed every two years and are recalibrated based on actual awards made by courts.Typically the recommended ranges of awards are categorised as minor, moderate and severe – not dissimilar to the Book of Quantum used in Ireland by the PIAB.

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