Claims Ireland

The Independent Service that Assesses Compensation Claims

PIAB Not Serving Plaintiffs


18 September 2005

Two reports last week demonstrate conclusively how yet another group of Irish consumers, namely plaintiffs in tort actions, are being ripped off.

Last Tuesday, the Personal Injuries Assessment Board (PIAB), the body through which plaintiffs must now pursue tort actions, declared itself a success primarily because of the 75 per cent acceptance rate of its awards.

On Friday, the financial regulator revealed profits in the insurance industry rose by 65 per cent to €698 million and motor insurance profits rose 55 per cent to €330million last year.

The PIAB has been uniquely successful in taking money away from deserving plaintiffs and putting it directly into the pockets of the insurance industry. As a practising barrister, my view may be said to be sour grapes, but any objective analysis of the reports bears out my opinion.

Despite receiving more than 13,000 claims in the course of its first year, the PIAB finalised awards in only 350 cases.

Up to 5,000 claims were settled without going through the PIAB process. As PIAB is a “lawyer-free zone'‘ this means that insurance companies are making offers to unrepresented lay people who are naturally tempted to accept.

The PIAB publicity machine has a rather curious way of presenting statistics. In its press release, the PIAB said it delivered a verdict in the 350 cases at a cost of €185,000. Yet page 26 of the annual report said that the PIAB incurred expenses of more than €3.3 million.

While some of these expenses obviously relate to the 8,000 cases still in the system, in terms of an annual result, the PIAB spent €3.3 million successfully assessing only 350 cases. The PIAB estimates that had those 350 cases gone through the courts the total costs would have been €1.2 million.

It remains to be seen whether the PIAB will actually be cheaper than the traditional legal route. But that argument obscures the real injustice of the PIAB, which is the absence of a professional legal adviser to assist a claimant and worse, the absence of an experienced judge to value the claim.

An example from the PIAB's own statistics illustrates this. One case reported involved a maintenance man who suffered a severe fracture of his ankle and now faces the possibility of arthritis. The PIAB awarded him €52,500 in general damages.

According to the book of quantum - which sets out the range of possible awards for different injuries - an award for such an injury would be in the range of €49,700 to €84,200. The PIAB itself described the man's injury as “severe'‘ and outlined the risk of permanent damage as a result, yet awarded him only €2,800 above the bottom of the possible scale.

The problem is claimants do not know how a PIAB offer compares with a possible court award. Under statute, claimants must go the PIAB route first. They may then proceed to court, but who in their right mind would turn down an offer of a large cheque? 

But tort law is not just about money or awards. It also concerns defining liability in negligence for injuries caused to others. A processing system such as the PIAB can never replace teasing out a case in court in an adversarial system that has developed over many years.

The real loser in all of this is not the legal profession but injured claimants who are offered what appears to be a large sum of money and then effectively told to gamble if they reject the offer. And the winners? Unquestionably, the insurance companies.

Consumers are obliged to have insurance cover for a variety of contingencies giving them no option but to contribute to the insurance companies' windfall profits. But when accidents befall those same consumers they can no longer be assured of receiving their full legal entitlement as judged by a court of law.

Rather, they must bite the bullet and accept an unreasoned, non-legal adjudication by some nameless individual working for an organisation whose sole achievement has been, not to reduce the cost of litigation, but rather to increase the profits of the insurance industry.

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