Personal Injuries Assessment Board in Ireland - October Update
Following on from the news release indicating that injury claim awards in Ireland have been reduced by 40% since the introduction of the Judicial Council Guidelines in April 2021, the PIAB have now published more in-depth statistics.
It’s important to remember that most assessments take between 9 – 15 months, and the claimant has a further 28 days post assessment to accept or reject it, so the statistics published refer to a reasonably small number of cases (~2,600) assessed between 27 April and completed by the end of September 2021.
- 18% of awards are now under €5,000.
- 30% are between €5,000 and €10,000
This means 48% of assessments are under €10,000 compared to 12% previously.
PIAB says that there is an average reduction of €9,654 per claim and that this level of reduction equates to a total reduction in award values over this period of €25.6 million.
As we have outlined previously, the guidelines have not yet been tested in court and there are judicial reviews pending against both PIAB and the state in relation to their implementation. In the absence of a body of case law demonstrating the court’s approach to the guidelines, many claimants are more likely to be prepared to take their chances.
PIAB’s report confirms that the overall acceptance rate has dropped to 41% where pre-guidelines it would have been over 50%.
Traditionally claimants would have accepted around 50% of awards and respondents would have accepted around 90% giving an overall acceptance rate of just over 50%.
Since the implementation of the guidelines, only 36.6% of claimants in motor cases are accepting awards. With the respondent acceptance rate of 95.4% this gives and overall acceptance rate of just 34.2% in motor cases.
Public liability and employer’s liability fair slightly better with claimant acceptance rates of 54.7% and 42.8% respectively.
To put those figures in perspective, 68% of the claims during this period were motor claims, 19% were public liability and 13% were employer’s liability.
PIAB Chief Executive Rosalind Carroll indicated that this was not unexpected, however she also pointed out that less than 4% of claims are determined by the courts and therefore it is essential to review data on all settlement channels in order to determine the true impact of the Guidelines.
The guidelines introduce significant reductions in respect of minor injuries. As the guidelines only apply to cases assessed and issued after the guidelines were introduced, the courts are currently handing down awards under the old Book of Quantum. This means that claimants, not unexpectedly, may feel short changed due the two-tier system in operation. The other sticking block is that a claimant is not entitled to any legal costs if they accept a PIAB assessment, except for cases involving minors or other vulnerable applicants. If they issue proceedings and get even €1 more, the claimant will get the award plus costs. Statistics from the Central Bank indicate that litigation can increase overall claim cost by 60%, with most of that being legal costs, therefore it is clear why litigation is so attractive to claimants. It is also why early settlement can be so attractive to respondents. Most claims settle outside court therefore the behaviour of respondents/insurers is likely to have significant influence on settlement behaviour. The desire to minimise legal fees (both their own and the claimants) could lead to early settlements being negotiated at a level beyond that envisaged by the guidelines. This would have the long-term effect of undermining the guidelines entirely.
Eva Bashford, Partner in Horwich Farrelly Ireland said: It is vital that all organisations settling claims follow the guidelines in order to drive long term change in settlement behaviours. In the short term this may lead to an increased spend on legal fees as more claimants opt to litigate. In the longer-term however, consistent application of the guidelines will lead to the reductions envisioned when it becomes clear that respondents aren’t going to offer more money to avoid legal fees, and the claimant can’t be assured of a higher award in the Courts.
For more information, please contact Eva Bashford.