Blow for judges as minister decides against proposed 17pc increase to personal injury awards
It comes after a committee of judges had made a controversial proposal to hike personal injury award guidelines by almost 17pc.Insurance companies had warned that such a rise would have led to even more premium rises.The proposal from the Judicial Council needed to be approved by a change in the law to effect it.Personal injury guidelines are used by the courts and the Injuries Resolution Board when assessing injury claims.But it is understood that the proposal from the judges will not be voted into law.A memo prepared by Justice Minister Jim O’Callaghan, to be presented to a Cabinet sub-committee on insurance reform, states that he will “lay the guidelines in the Oireachtas but not move a resolution”.This effectively means the recommendation of the Judicial Council to increase the guideline award levels will be laid before the Houses of the Oireachtas but not effected by legislative change.Next week’s full Cabinet meeting will be presented with Mr O’Callaghan’s memo which effectively says the Government should not move to increase injury award levels.This is seen as a major blow for the legal fraternity, but a victory for the likes of the Alliance for Insurance Reform, business lobby group ISME, Insurance Ireland, and insurance companies.Today's News in 90 Seconds - July 9th All of these groups said lawyers would be the main winners from any hike in the award guideline levels.And the National Competitiveness and Productivity Council criticised the fact that the judges did not consult the Injuries Resolution Board before proposing higher award levels.Business and consumer groups claim that higher awards will act as a greater incentive for lawyers to encourage their clients to avoid settlements in the Injuries Board, which does not pay legal costs, and litigate the claims instead.Lawyers get huge legal fees for litigated cases.The Central Bank has found that in liability claims the average award assessment of the board and one that is litigated both come in at €24,000.Legal fees for cases settled through the Injuries Board average €597.However, litigated cases have average legal costs of €24,786.A sub-committee of the Cabinet, set up to drive insurance reform, discussed the matter today.It is understood a memo presented to the sub-committee by Mr O’Callaghan states the also plans to amend the Judicial Council Act that would mandate judges to review award guidelines over a longer period than the current three years.Judges will be forced to engage with the Injuries Resolution Board when considering changes to recommended award levels.There is also mention of a commitment to legal reform, in the memo.However, Minister O’Callaghan is also expected to convey his concerns to the sub-committee on insurance reform on the impact not increasing award levels could have on the Injuries Resolution Board.There is a risk that the judiciary could start making increased awards outside of the guidelines.At the same time the Injuries Board will not be permitted to increase its awards as it is obliged to impose the guidelines in place.There is a risk that this combination could drive claimants back to the courts with a consequent increase in legal costs which will make the claims process more expensive.This is something the minister is said to be cognisant of and plans to keep under review.
