In a recent Bar Review article, Judge Kevin Cross put forward an alternative view on the current narrative surrounding damages in personal injury cases.
The prevailing theory on personal injury awards is that Ireland is cultivating a ‘compensation culture’ which is driving up insurance premiums due to the amount of disproportionate and excessive awards being given to Plaintiffs.
In his article, Judge Cross suggests that the insurance industry is actually the ‘hidden persuader’ behind this notion and claims that this is an attempt by the industry to influence and drive down the level of damages awarded to Plaintiffs.
He notes that the insurance industry has suggested that the average High Court award has increased. Judge Cross wonders how they can know this since the majority of cases are settled, with no disclosure as to the amount and no sharing of data between insurers.
Judge Cross describes this suggestion as the “fallacy of rising damages” and suggests that the contrary is actually true in that the level of general damages has decreased, taking into account inflation. He does concede that the cost of special damages however, have risen.
Judge Cross argues that a Plaintiff manufacturing an injury already faces significant obstacles such as numerous medical reviews, reports and surveillance. He argues that it would take a “fairly sustained level of acting ability” to go through the inconvenience of the 4 or 5 years before a case is heard, all while encased in a cervical collar or using crutches without any real medical need. He recognises that there should be no distinction between injuries visible on an x-ray and those not – in each case what is meant to be compensated is the actual loss or trauma to the individual.
He goes on to suggest that another cost that the insurance industry highlights -the cost of litigation- has actually decreased due to a change in the taxation rules. In addition, he suggests that PIAB has had a significant effect. In 2004, before the introduction of PIAB, 15,393 personal injury cases were listed in the High Court. In 2016 there were 8,510.
Judge Cross also makes reference to the fact that there is an increasing public awareness of safety and accident mitigation. For example, the Road Safety Authority has reported that the number of road injuries and deaths has decreased steadily over the years. Employers have also steadily been increasing safety awareness in their premises. He notes that the number of accidents as a percentage of insurance policies has dramatically decreased.
Judge Cross argues that premium increases are due to “mismanagement” in the industry or lack of competition, as opposed to an increase in awards for damages.
In conclusion, he maintains that the ‘hidden influencer’s’ in the insurance industry have done an effective job of promoting the idea that “one man’s award is another man’s premium increase”.
It’s an alternative point of view that will no doubt be a source of discussion among industry members and those tasked with defending personal injuries claims.
A copy of the original article in the Bar Review can be found here.