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Insurance & Risk Update: Changing the Landscape of Personal Injury Claims

03 October 2018

Following its First Report published in December 2017, the Personal Injuries Commission (PIC), chaired by Mr Justice Nicholas Kearns, published its Second and Final Report in September 2018. This report deals mainly with the benchmarking of Irish personal injury award levels with international awards and an examination of alternative compensation and resolution models in other jurisdictions.

Key findings and recommendations

The Report makes a number of interesting findings and recommendations, which we now consider:

  • Compensation awarded for whiplash injuries is on average 4.4 times higher in Ireland than awards made in England and Wales. 
  • Fraudulent activities currently carry a low risk of detection and an even lower risk of prosecution, factors which encourage the continuing abuse of the claims system.
  • The Judicial Council should, when established, compile judicial guidelines for judges on the appropriate general damages for various types of personal injury. This recommendation follows the example of judicial intervention in Northern Ireland and England and Wales. 
  • Any proposal to cap the amount of damages which a court may award requires careful constitutional scrutiny by the Law Reform Commission.
  • A “care not cash” system of compensation for soft tissue injuries is incompatible with EU and national law. Possible schemes combining care and cash awards are inappropriate as they would appear to add additional costs and difficulties to the claims environment. 
  • Best practice “standard treatment plans” should be introduced to ensure appropriate, timely and effective treatment for persons who sustain a soft tissue injury, improving patient outcomes and reducing the costs associated with this form of injury.
  • In cases where an insurer deals directly with a claimant, no offer in settlement or payment of a personal injury claim should be made without obtaining a medical report detailing the nature, extent and prognosis of the injury. 
  • Claimants must give prompt notification of a claim to a defendant or insurer so that fair and proper investigations may be undertaken. 
  • As exaggerated and fraudulent claims have an adverse impact on overall claims, the issue needs to be addressed by the development and deployment of suitable strategies, such as technology, to prevent and detect such activity. It is also recommended that a Garda fraud investigation bureau should be developed without delay. 
  • Insurers should step up their anti-fraud capacity through the recruitment of suitably trained personnel and the development of various technological means.
  • Insurers and other relevant parties should consider adopting a standardised, internationally recognised injury coding system.   
  • The insurance industry should establish a national medical research study on the prevention and management of whiplash injuries.

Conclusion

The recommendations propose that far reaching action is required to tackle the impact on the insurance sector of the high personal injury awards and false and exaggerated claims.

Judicial guidelines, and other recommendations such as efforts to promote anti-fraud strategies, could potentially result in greater consistency and predictability for awards, faster resolution of claims and a reduction in claims costs. 

Significant emphasis is placed on the involvement of insurance companies in finding a solution with particular emphasis on the development and implementation of anti-fraud strategies, the establishment of a national medical research study on the prevention and management of whiplash injuries, and the adoption of an internationally recognised injury coding system.

For more information on the key recommendations of the report, contact a member of our Insurance & Risk team. 


The content of this article is provided for information purposes only and does not constitute legal or other advice.

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