Personal Injury Claims: The Imperative for Continued Insurance Reform

Navigating the Challenges of Personal Injury Claims: The Imperative for Continued Insurance Reform

In recent years, Ireland has undertaken significant reforms to address the complexities and costs associated with personal injury claims. However, emerging trends indicate a pressing need for sustained efforts to ensure these reforms achieve their intended outcomes.

Proposed Increase in Personal Injury Awards

The Judicial Council's Personal Injuries Guidelines Committee has recommended a 16.7% increase in damages awarded for personal injuries. This proposal, if implemented, would raise the maximum compensation for severe injuries from €550,000 to €642,000.  While this adjustment aims to reflect current economic conditions, there are concerns about its potential impact on insurance premiums and the overall cost of claims. These proposed adjustments highlight the proportional rise in awards for the most severe cases, such as quadriplegia, brain damage, and severe sensory impairments, while also addressing the less severe, such as shoulder and ankle injuries. The Judicial Council planned to review the proposed amendments in January 2025 and, if approved, the proposals will go to the Minister for Justice. At the time of writing this article, we were not sure had this proposal been sent to the Minister.

They must be approved by both Houses of the Oireachtas before becoming law.

Predominance of Litigation in Settlements

Despite the establishment of the Injuries Resolution Board (IRB) to facilitate cost-effective and timely claim resolutions, a significant majority of cases continue to be settled through litigation. In 2023, 68% of personal injury settlements were achieved via litigation, incurring average legal fees of €23,000 per case, compared to €1,000 for those processed through the Injuries Resolution Board. This trend not only escalates the financial burden on the insurance system but also undermines the efficiency of the Injuries Resolution Board.

The Implications

If personal injury awards increase, alongside the associated legal fees it could continue to cause problems for the economy. Businesses, particularly small and medium-sized enterprises, may face increased insurance premiums, potentially hindering their operational viability. In the events sector, we know that the operators are facing increased costs across the board (Labour, Suppliers, Energy, Food etc). It is worrying because events are often run on tight budgets and sensitive to consumer confidence and the discretionary spending power of attendees. 

The Call for Sustained Reform

To address these challenges, it is imperative for the government to:

Reinforce the Role of the Injuries Resolution Board: Enhancing the capacity and authority of the Injuries Resolution Board can encourage more claimants to opt for this cost-effective and efficient avenue for dispute resolution.

Address Legal Costs: Implementing measures to curtail excessive legal fees associated with personal injury claims can alleviate the financial strain on the insurance system.

Promote Alternative Dispute Resolution: Encouraging mediation and other alternative dispute resolution mechanisms can reduce the reliance on litigation, expediting settlements and reducing costs.

By steadfastly pursuing comprehensive insurance reforms and addressing the underlying factors contributing to high legal costs, Ireland can create a more equitable and sustainable framework for personal injury claims. This approach will not only benefit claimants and insurers but also bolster the broader economic landscape by mitigating undue financial pressures on businesses.

New Competition in the Insurance Market

Competition is key, so Eventinsure and Brady Insurance have recently worked on increasing the insurance capacity we use and have signed a deal with Liberty Specialty Markets in London, to become part of our panel of insurers and also to provide insurance cover for some new leisure and sports trades that we see a gap for.  Additionally in Eventinsure, we have kept our insurance rates more or less stable over last number of years, with less than 5% rate adjustment in 7 years! This is something we have fought for and are really proud of as insurance intermediaries. 

See some news articles below that covered this exciting development: 
Breaking News 
Irish Examiner Article