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Insurance & Risk Update: Common Sense the Best Policy in 2019?

11 December 2018

During the past year, the Irish courts have applied the principles arising from the Byrne v Ardenheath Company Limited judgment. This has resulted in a welcome approach to the application of ordinary common sense to determinations in personal injury cases. The Personal Injuries Commission’s second and final report examined the benchmarking of Irish personal injury award levels with international awards. It also looked at alternative compensation and resolution models in other jurisdictions. Last, but certainly not least, GDPR had far reaching implications for Irish insurance companies. We examine all of these issues and their impact on insurance litigation in Ireland during 2018. 

Common Sense Prevails

The Court of Appeal judgment in Byrne v Ardenheath Company Limited marked the welcome emergence of an ‘ordinary common sense’ approach to the judicial determination of personal injuries actions in Ireland. The Court of Appeal set out the following criteria:

  • A court should bring ‘ordinary common sense to bear’ on the assessment of expert evidence, particularly where it is not dealing with a complex or specialist field of activity

  • Plaintiffs are responsible for their own actions where the application of ‘ordinary common sense’ would have prevented the accident giving rise to the claim

A number of recent cases applied the criteria set out in the Byrne judgment. In Edward O’Connor v Wexford County Council, which was handed down in May 2018, the High Court acknowledged that while these criteria applied to circumstances arising from occupier’s liability, they were also relevant in the context of employers’ liability claims. 

As recently as 23 November 2018, the High Court in O’Mahoney v McCarthy Hanlon and Waterford and Wexford Education and Training Board again re-affirmed the application of the Byrne criteria in the assessment of reasonableness in employers’ and occupiers’ liability claims. We acted for the second named defendant in that matter.

The dismissal of claims on the application of the criteria set out in the Byrne judgment is a welcome development from the point of view of defendants and their insurance companies and it is hoped that it will continue.

Personal Injuries Commission

Following its First Report published in December 2017, the Personal Injuries Commission, chaired by Mr Justice Nicholas Kearns, published its Second and Final Report in September 2018. 

The Commission examined the benchmarking of Irish personal injury award levels with international awards and looked at alternative compensation and resolution models in other jurisdictions. 

It found that compensation awarded for whiplash injuries is on average 4.4 times higher in Ireland than awards made in England and Wales.

The Commission considered possible schemes combining care and cash awards for soft tissue injuries to be inappropriate as they would appear to add additional costs and difficulties to the claims environment.

The Commission’s recommendations included:

  • The introduction of best practice “standard treatment plans”

  • The compilation of judicial guidelines for judges on the appropriate general damages for various types of personal injury

  • The development and deployment of suitable strategies to reduce exaggerated and fraudulent claims

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.

GDPR

The General Data Protection Regulation came into effect in May 2018. It has had far reaching implications for insurance companies, their insured entities and indeed litigators, who now have a heightened obligation to ensure personal data is dealt with appropriately. 

It is likely that this enhanced focus on data protection will lead to an increase in the number of data protection actions taken in the Irish courts. Claims for breaches of data protection legislation are also likely to be seen as heads of claim in personal injuries proceedings, employment disputes and other civil actions.

How the courts will deal with compensating for such breaches remains to be seen. Prior to the GDPR coming into force, compensation could only be awarded for material or financial loss. While claimants could bring personal injuries actions arising from emotional distress, it was not a recoverable loss under data protection legislation. Interestingly, compensation for psychological distress is now also recoverable as part of a data protection action. This broadened scope is sure to result in a rise in actions, particularly once these claims become more mainstream and as data subjects are becoming more aware of their data protection rights and remedies.

It will also be interesting to see if the judiciary will approach the issue of compensation for psychological distress in data protection actions in a similar manner to the approach taken in personal injuries actions in terms of quantifying damages. 

Conclusion

2018 has been an interesting year for insurance defence practitioners and their clients. The Irish Courts’ willingness to apply the Byrne v Ardenheath judgment in a number of cases throughout the year has been a very welcome development, as have the proposals made by the Personal Injuries Commission. It will be very interesting to see how these play out in 2019 and whether or not data protection actions will become as prevalent as anticipated. Only time will tell.

For expert legal advice on successfully defending personal injury claims, 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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