Injury awards fall by 40% but will cost of insurance drop?
PERSONAL injury awards have fallen by 40% compared to last year – with almost half of payouts now under €10,000 following a major reform of the Judicial Council Guidelines.
Tánaiste Leo Varadkar vowed yesterday that the public will benefit from this sharp reduction in the form of reduced insurance premiums.
The fall in awards comes just five months after the new injuries guidelines came into effect earlier this year.
A report by the Personal Injuries Assessment Board (PIAB) has revealed that 18% of awards from April to September were under €5,000, and 30% were between €5,000 and €10,000. Nearly half (48%) of all claims are now under €10,000 compared to just 12% of awards in previous years.
In the same five-month period last year, the State paid out an average of €23,877 to personal injury recipients. This five-month average dropped to €14,233 this year.
A breakdown of the awards show that claims against employers remain the highest overall – with an average €17,203 paid out between April to September.
In the same period last year, workers who took their employers to court for personal injury claims received €30,576 – a 44% reduction.
A total of €15,697 was awarded for public liability damages, compared to €26,000 in 2020 – a difference of 40%.
Motor-related awards equated to €13,230 in the five month period this year, while last year saw €22,158 handed out for this type of award. The report shows that the average awards for general damages has also fallen 46%.
Mr Varadkar said insurance reform was one of his top priorities as Tánaiste.
‘Premiums have been too high for too long. I know many businesses and volunteer groups also continue to struggle to find insurance too,’ Mr Varadkar said. ‘These figures, published by the Personal Injuries Assessment Board are really welcome and although we will continue to monitor the situation closely, they do show that the guidelines are having an effect.
‘I expect this dramatic drop in award levels to be reflected in reduced premiums for individuals, businesses and volunteer groups and Government will continue to work with the insurance sector to make sure this is the case.’
Minister of State for Financial Services Seán Fleming TD also agreed that insurance companies should reduce their customers’ premiums in light of the reduction of awards being granted.
‘It’s important that we see the insurance industry meet their public commitments to pass on their reduction in costs to their customers,’ he said. ‘The new personal injury guidelines have created stability for the insurance industry, and this is making Ireland a more attractive place to sell insurance.
‘We have identified a number of key business sectors that need more insurance competition and I am working closely with the IDA to attract new insurance operators into the Irish market,’ he said.
However, PIAB chief Rosalind Carroll believes that the report is ‘good news’ for individuals, communities, and businesses who pay for insurance. ‘It will take some time to see the full effects of the guidelines, particularly in respect of savings in legal costs and litigation,’ she said.
However, she said the changes to the guidelines are having an ‘immediate effect’ and added: ‘Reductions in award levels create the perfect environment for a reduction in insurance premiums.’
‘It will take time to see full effects’