Insurance costs are rapidly becoming the biggest threat to many Irish businesses and especially those in the hospitality sector. What is frustrating is that while the causes of high insurance costs have been thoroughly researched, the remedies have been painfully slow in coming.
If forming Committees and Working Groups was an Olympic sport, Ireland would be a regular medal winner. In recent years we have seen a flurry of Committees set up to deal with the insurance issue. All with their own acronyms – the Cost of Insurance Working Group (CWIG), the Personal Injuries Commission (PIC) and now the Personal Injuries Guidelines Committee (PIGC) which in turn is a sub-committee of the Judicial Council (JC).
Confused? I don’t blame you. The Alliance for Insurance Reform was set up almost two years ago by a wide range of civic, sporting and small business bodies. Our sole objective has been to reduce spiralling insurance costs in Ireland to sustainable levels. We have worked hard, with our member organisations, to keep this issue on the political agenda and prominent in the media. We have also put forward realistic solutions which would reduce insurance premiums.
On a weekly basis, I am contacted by a restaurant owner, a hotel, a play centre, a charity or a community group that has reached an existential point in their organisation due to a massive increase in premium even though they have had a zero or minimal claims experience; or can no longer get insurance cover at all.
For all the weighty reports written on the issue, the basic causes of our insurance crisis are not in doubt. We award disproportionately high awards – minor injuries often getting massive awards. At insurance company and Garda level, we do not tackle fraudulent or exaggerated claims – spawning a compensation culture. The fear-of-getting-caught is so low for fraudsters and exaggerators that there is really no deterrent. Even when a case is dismissed for fraud or exaggeration, we hardly ever see a judgement that makes the have-a-go claimant pay the other side’s legal bill.
Vested interests – especially lawyers and insurers – who make fortunes from the personal injury business – fight tooth and nail against reforms which would bring insurance costs down for businesses. Finally, in our courts, the scales of justice seem to weigh much heavier on the shop, the pub, the hotel or the café which has received the claim rather than on the claimant.
So, what’s to be done? The solutions have been long identified and are now well accepted across the political spectrum.
The new Personal Injuries Guidelines Committee (PIGC) must urgently reduce general damages to reflect international norms and the principles already established by the higher courts. In simple terms minor injuries should attract minor damages.
Government must set up a fully resourced and dedicated Garda Unit to tackle fraudulent and exaggerated claims.
We need to review and re-balance the “common duty of care” to one that requires occupiers to take a duty of care that is reasonable, practical and proportionate.
Finally, we need Government to take a tough line with insurers. As reforms are implemented, premiums for public and employer liability must fall – and fall rapidly. Let’s see quantifiable commitments from insurers on those reductions.
So, please, no more Committees or Working Groups. Let’s have action.