A slice of PI

Tania Sless examines radical initiatives that are being implemented in the Republic of Ireland with the aim of reforming its personal injury compensation set-up, a system that has often been seen as easier to abuse and offering bigger payouts than the UK

Compensation in the Republic of Ireland is much more generous than in the UK, as many insurers have found to their cost. Irish litigants are aware that it pays them to forum shop when they have the choice of suing either in Ireland or the UK. Insurers also complain of delays in Irish litigation, and the difficulty of achieving settlement until the day of the trial, with the attendant increase in costs.

The Irish government has, for some time, shared this concern about the cost of personal injury claims, particularly when compared with its European neighbours, including the UK. Insurance is much more expensive in Ireland as a result.

This situation may, however, be about to change after new initiatives by the Irish government. The Personal Injuries Assessment Board, a statutory body, recently commenced operations. As its name suggests, it will assess compensation for personal injuries without the need for court proceedings.

It is confined to cases - initially only employers' liability but since 22 July, motor and public liability - where liability is not disputed.

It will operate a 'documents only' system of assessment.

Counting the cost

Parties are entitled to seek legal advice at any stage and the PIAB will not award costs - except in the case of vulnerable claimants. It will correspond directly with the claimant, even if they have appointed a lawyer, in which event the legal costs will presumably come out of the claimant's compensation. Assessment of damages will primarily be based on a medical report from the claimant's doctor, although in some cases a member of an independent medical panel will carry out an examination.

The PIAB will compile a book of quantum as a guideline to general damages for various categories of injuries. In due course, the PIAB suggests that claimants may use this book to settle claims directly with the persons they hold responsible for their injury, without need for reference to the PIAB or a court.

The aims of the PIAB are two-fold - to reduce legal costs and other fees charged by experts involved in personal injury claims, and to reduce the length of time taken to finalise compensation claims. The intention is that the PIAB will award the same amount as a court but its costs will be much lower.

Red tape

In order to claim compensation, the claimant must complete an application form and enclose a medical report from their treated doctor; confirmation from their employer of any loss of earnings; receipts for any other expenditure; other relevant documents; correspondence with the respondent; and a payment of EUR50 (£34). The PIAB will then contact the respondent to ensure that they are happy for the PIAB to assess the claim. It is difficult to envisage any respondent, particularly if insured, declining to deal with the matter in this way.

Both parties can choose whether or not to accept the PIAB award, the claimant having 28 days to make a decision, and the respondent 21 days.

If the claimant chooses not to accept, or fails to respond within time, the PIAB will issue an 'authorisation' that will enable the claimant to proceed to court if they wish. If the respondent does not reject the award, it will be assumed that they agree to it, and the PIAB will then issue an 'order to pay'. This will have the same status as a court award. Interest and other penalties may be added in the event of non-payment.

If the matter subsequently proceeds to court because one or both parties have rejected the award, the respondent is free to argue legal issues and to contest liability.

Further reforms are also in the pipeline. The Civil Liability and Courts Bill 2004, described as the government's response to "the crisis caused by the compensation culture," was published in February this year. Aimed at streamlining procedures in personal injuries cases and reducing insurance fraud, the Bill proposes reducing the time limit for bringing proceedings from three years to one so that there is no undue delay. Claimants must provide particulars of previous claims made.

The courts may direct the parties to participate in a mediation conference under an agreed or appointed chairman. And the courts will have the power to appoint experts to investigate specific matters. A new offence is created outlawing the giving of false evidence in personal injury claims, with penalties of up to 10 years.

Warm welcome

Not surprisingly, the Bill was welcomed by the Irish insurance industry.

It was also welcomed by the Irish Bar Council, and - except in relation to the reduced time limit - the Irish Law Society.

The PIAB on the other hand has not been welcomed by lawyers, with some already predicting its failure, and expressing concern at the opportunity for fraud. The Irish Law Society is vehemently opposed, describing the scheme as a triumph for the defence interest. It remains to be seen whether claimants are attracted by the prospect of securing compensation without the need for legal advice. If so, and if the PIAB in tandem with the other proposed statutory reforms does indeed lead to the 8% - 10% reduction in insurance premiums suggested by the Irish Insurance Federation, then it may be that others will look to the Irish example.

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