New laws on insurance claims could hit motorists’ pockets
THE Government is set once again to hit the pockets of motorists despite the continuing insurance cost crisis.
The latest development is hidden in a piece of legislation published by Minister Heather Humphreys on August 14 under the title ‘Personal Injuries As- sessment Board (Amendment) Bill 2018’.
Ostensibly, the objective is to curtail abuses by injury claimants of the independent assessment board (PIAB) which does not award legal costs in the 23pc of claims finalised through the non-adversarial process.
But hidden away in the wording of Section 13, which in the June 2017 version of the Bill had the misleading heading ‘Grants to the Board’, the Government is planning to give itself the power to snatch the financial reserves of the PIAB. These stand at €17m from successfully defending judicial reviews by vested interests.
If that money was being earmarked for road safety or fraud detection, there might be some arguable legal basis for the proposal. But the money is destined for the Central Exchequer.
And the constitutionally frail wording holds the prospect of Government seeking an annual dividend from the operations of PIAB. The extra cost would fall on potential defendants, called respondents in PIAB, of whom 60pc are motorists.
The provision also risks undermining the independence of the board, which has been self-funding since it started in 2004 after repaying its loan for set-up costs.
The ensuing conflict of interest for the board is something government policy is supposed to avoid, as outlined by the revised code of 2016 on Corporate Governance in the public sector. This prevents a civil servant, to whom a State agency reports, from being a board member of it. One cannot serve two masters with opposing agendas.
Meantime, I will let you do your own calculations on how much you contribute to the Exchequer kitty annually.
As well as compulsory insurance premiums, there are levies which have increased from 3pc to 5pc since last July to pre-fund insurer insolvencies.
And ‘road tax’ which, since January 2018, is no longer allocated to roads but to the central Exchequer.
About half the price of every litre of fuel goes to the Government before you factor in what fuel companies and their employees pay in tax. And VRT rates on new vehicles here are high.
I could go on but I won’t – you’ve heard all that before.
Also, I am not anti-bike but I would point out that as road users they make little or no contribution under any of the headings just mentioned.
Back to the cost of motor insurance. Any legislation published during the Dáil recess from July to September always raises my suspicions about things trying to fly under the radar.
The content of this PIAB (Amendment) Bill 2018 is essentially the same as that proposed after the 2014 consultation on the previous decade of operations.
As a result it largely ignores the decisions of the Court of Appeal since November 2015, which halved the levels of compensation previously awarded for moderate injuries by the High Court.
It makes no reference to the recommendations of the Personal Injuries Commission in December 2017. They envisaged that compensation should be assessed on the basis of percentage disability – that would substantially reduce awards for minor and moderate injuries, most of which do not involve any absence from work or financial losses.
Publication of this Bill during the politicians’ holidays is a bit like a celebrity chef show where only half the methodology is explained and the programme ends with “here’s one I prepared earlier”.
Aside from gathering in more money for the Minister for Finance, this Bill will do nothing to ameliorate the cost of insurance.
We know from experience that, for constitutionally sound reasons, the Executive government cannot dictate to the independent judiciary.
If claimants are to be sanctioned for abuses of the PIAB process, such as failing to attend independent medical examinations, then the place for those measures is in the Rules of the Superior Courts, not in the occluded optics of another money-making machine at the cost of motorists.
The classification in economics theory of a cash cow cannot accurately predict at what point the animal is bled dry but many policyholders are already looking anaemic.