Compo culture won’t end until sky high pay-outs are finally slashed
THE rap on the knuckles Fine Gael TD Maria Bailey got last week was a welcome move by Taoiseach Leo Varadkar but it changes nothing in our compo culture country.
The reality, ladies and gentlemen, is that we are sleepwalking into a culture in which entitlement is enabled and in which businesses are ever-laying golden geese for solicitors and base opportunists. Pay-outs for whiplash, accidents at children’s leisure centres, defamation cases, cases against local authorities are all eye-wateringly huge. Going to court for a few days is beyond the means of most businesses and individuals so insurance companies invariably settle and this is exactly why it is far too easy for people to make a killing – even when they are often to blame for their own misfortune.
Pay-outs of up to €10m are not unheard of in our courts and that has been for defamation cases – crazy stuff!
In May the EU Commission finally made the decision to launch a formal probe into the Irish insurance market. Meanwhile the government’s junior finance minister Michael D’Arcy Jnr has said he doesn’t trust the insurance industry, while Sinn Féin’s Pearse Doherty went one further, accusing insurers of ‘gouging’ customers, given that their profits shot up by 1,300pc in one year.
‘I don’t trust them. They are involved in price gouging, they are involved in spin, they are involved in bluster. They made profits of a quarter of a billion euro in 2017,’ Mr Doherty said.
Last week the insurance crisis escalated after one of the last firms covering the leisure sector pulled out of the Irish market; a move which puts thousands of jobs at risk. As a parent of two children who are turning six and eight in September, I will be one of many struggling to find somewhere to throw a party because more and more community halls have had to stop allowing functions to be held due to spiralling insurance costs.
Oxford-based LeisureInsure said it will not quote for new business from this week, and from the end of the month will cease all renewals. It was one of the last few insurers covering event companies, bouncy castle operators, leisure centres, yoga classes, soccer teachers, drama classes, some play centres and a large number of leisure companies. Operators in the leisure sector largely rely on British insurers as Irish-based insurers fear incurring large losses on what is called liability insurance.
LeisureInsure was a management agent for insurer AxaXL in this market. It dealt with insurance brokers and directly with policyholders. The Alliance for Insurance Reform said thousands of businesses would not be able to get cover, although some cover is being provided to the sector by brokers with access to a specialist division of Allianz.
By stripping Maria Bailey of her plum €9,000 plus a year chairperson role on a housing committee, Mr Varadkar has hit her where it hurts, in the pocket. Bailey was found (by her party) to have exaggerated her injuries when she fell off a swing in a hotel while holding drink, and the way the shambles played out in the press earlier this year was hugely embarrassing for a government perceived to be more upper crust than working class. So long as businesses, local authorities and community organisations are deemed always to blame when an injury occurs on their property and as long as pay outs continue to be four, five times the European norm, the ‘gougers’ in insurance companies and the people always on the game for easy money will continue to live it up.
Taoiseach Leo Varadkar has shown some leadership in his treatment of Maria Bailey.