Claims Ireland

Insurers not Telling the Full Story

18-Jun-2019

Pat McDonagh (Supermacs) has made, as ever, some interesting points about personal injury cases. He is absolutely right that insurance premiums have risen in recent years, and that insurance companies look out for their own interests, not those of the insured.

We don’t think anyone would defend fraudulent claims but the system already allows for costs to be awarded against people making fraudulent claims and for them to be prosecuted.

Most of the coverage of insurance issues over the last few years has focused almost exclusively on the supposed increases in the numbers of claims, the amount of compensation paid and the legal costs involved.

This is despite figures from the Personal Injuries Assessment Board (PIAB) and the Courts Service showing no significant change in the number of claims, the many decisions of the Court of Appeal reducing compensation awards and the fact that court cost awards have been slashed over the past 10 years.

Any system can be improved and the system of awarding compensation for personal injuries should be continually reviewed. But the last reform, which introduced PIAB, was the result of another sustained campaign by the insurance industry.

PIAB, and the Book of Quantum which sets guidelines for compensation, are essentially creations of the insurance industry. When talking about PIAB, Mr McDonagh has misunderstood what the O’Brien case against PIAB, which the Law Society was involved in, was about.

PIAB does not award legal costs for that legal advice, but it is worrying to think that anyone would favour denying someone the right to independent legal advice and representation.

Insurance companies might prefer it if people don’t consult a solicitor, but it would be spectacularly unfair and unbalanced to interfere with their right to do so.

For most people unfortunate enough to be involved in a claim the experience will hopefully be a one-off, but the insurance industry would like that person to navigate the system alone, while they have the benefit of expert claims handlers and lawyers who deal with these claims all day.

Any personal injury solicitor has experience of cases where attempts were made to settle claims directly, at an undervalue, or when the injured party had not recovered from their injuries, or where children were injured and a settlement was made directly with an alcoholic parent for a pittance and no court supervision, or where the injured party was offered money but told the offer would be revoked if they instructed a solicitor.

In more routine cases, how is a person to know whether procedures have been followed correctly or whether they have been treated fairly?

Scare stories about injury claims have once again reached a fever pitch but there is less said about the fact that the European Commission carried out dawn raids at Irish insurance industry offices as part of a cartel investigation in July 2017 and less than one year later, after years of motor insurance price hikes, CSO figures showed premiums plunged over 12%.

Insurance companies can make themselves more profitable by increasing premiums and reducing what they pay out on claims, and they have done so with spectacular results in recent years.

However, some companies in the Irish market have a history of bad management and bad investments – all of which has an obvious impact on premiums but which is talked about less.

The current campaign against personal injuries claims has included targeted criticism of solicitors, and while it might not be popular to say so most of that criticism is unfair.

No solicitor should ever advance a claim which they know is fraudulent. If a solicitor does that it is incredibly serious and they should be reported to the gardaí, the Law Society and the Solicitors Disciplinary Tribunal.

There are often calls for the Law Society to do something about the issue but it is never clear what they are supposed to do. If insurance companies have evidence of wrongdoing they should report it.

But what about cases where there was an accident and injuries but an insurance company argues the injuries were exaggerated? Those cases often involve a conflict of medical evidence, which is for a judge to decide if a case does not settle.

Or where evidence emerges during the course of a case that does raise doubt but might not be conclusive.

The entire facts of a case are rarely known to both sides at the outset. A solicitor must always be vigilant and not just take on board instructions as fact but it is the job of a solicitor to advise on a case and advance it on the evidence, not to decide it.

A recent media study of court records checked whether there were any trends in fraudulent claims around the country to see if any particular solicitor had a high number of them and it did not find any such trend. It would be a very serious breach of professional conduct rules, and worse, if a solicitor furthered a case which they knew was fraudulent.

Last week, it was reported that almost 800 cases of fraud have been reported to gardaí by insurers in 2017/18 but as far as we know there have been hardly any prosecutions. We need more information on this – if there is evidence of fraud it is hard to understand why there have not been more prosecutions.

In our experience, however, the issue of fraud is exaggerated by the industry and it would be useful to hear from the gardaí or DPP as to whether these hundreds of cases involved any reliable evidence.

The reality is that the vast bulk of personal injury claims are straightforward assessments of damages where liability and exaggeration are not issues but it suits the industry to portray an environment of dodgy, out of control claims in its effort to encourage legal changes that would reduce the amounts of money it must pay out so that it can continue to bank the huge profits it has become accustomed to.