Matt Shanahan: Tackles soaring business insurance and PIAP review

Gerham, Oireann Córle. Minister, it has been already said a number of times in the House already, but insurance costs as a result of personal injury awards have been a blight on the Irish business landscape for a number of years. I think it is not stretching it to any degree now to say for a lot of businesses that, and I know a number of businesses who have verged on self-insurance over the last years, and actually in fact some were trading without insurance for a period of time because it just could not sustain. the cost, and we have seen, and we are still seeing a number of businesses in Ireland who are failing to secure adequate liability insurance, and that is a significant problem going forward, and I hope it is something that your department will look at. On top of that, we have also seen insurance companies exit the market, and I think it is fair to say there has been a very significant lack of transparency in the market in terms of what the claims situation was like, and that is something again that has to be addressed, particularly now as we try to deliver insurance reform. Insurance reform has been a very long time coming. I seem to remember a previous Fine Gael junior minister who has come and gone who championed insurance reform in this House, and we are now only getting into the trust of it. myself and colleagues, as you know, as you know, Minister have been active in this area, and we have been working to try and help to improve, to liaise with business, particularly in the SME sector, and to try and improve the landscape, and we have, as you know, pressured for the introduction of more significant perjury legislation. Perjury, unfortunately, has played a very key part in a lot of compensation claims over the past number of years. In fact, we have seen evidence of CCTV showing set-up traffic accidents where people clearly were not in cars and yet they were able to go into court and perjure to say that they were passengers of vehicles. Hopefully that is coming to an end, but I might also point out somebody who has led a period of reform in this country, Supermax, and in fairness to Pat McDonagh was one of the first people to introduce video evidence in hallways and close to toilets and to show that people are actively trying to create slips and falls in order to avail of personal injury payouts. It has been a very significant problem and, as I say, it remains so. Actually, funny enough, this year, Minister, as I am sure you are aware, there has been a reduction in motor premia over the past 12-15 months and that has been put down to the ongoing work of insurance reform. What is amazing at the same time is that insurance costs have risen for the business sector and that does not really make sense to me. I would say the claims environment largely in a lot of businesses do not reflect the premia they are paying. Some have never had a payout and yet they have seen their insurance premium rise by 100, 150, even 200 per cent in the past year. There is still something fundamentally wrong with our insurance sector that needs to be got with. I think everyone can agree that many of the low-level claims can be adequately dealt with outside of the courts system. Now, with the working book of quantum, transparency should be able to be applied to many claims. We have seen that system operate across Europe and, particularly in the UK, our near neighbour has operated that very well. It also remains the case that, even after the recent judicial guidelines, our book of quantum is still far away in excess of our UK neighbours. I think that, again, is something that needs to be revisited over the coming year or two. I welcome the personal injuries resolution board bill, which I believe, if properly supported significantly, will reduce the costs of administering personal injuries awards and thereby – and this is the crux of it – should reduce the costs of liability insurance on individuals and businesses. However, there is a key concern I have along with my colleagues Minister and as a member of the Enterprise Committee. I brought this up recently when we were looking at PIAP as part of PLS in the Enterprise Committee. I think a mechanism needs to be inserted within the Act that allows reforms to counter any unforeseen challenges to the operation of PIAP or PIRB into the future. Such a review mechanism is actually already built into the founding legislation of the Legal Services Regulatory Authority. There are three areas there, Minister, which I might draw your attention to. Within those terms, it allows that within 18 months and not later than each three-year period, a review of the operation of the Act is called for. I think that would be welcome in this case. It also states that no later than 12 months after the review commences, a report is made to both Houses and findings, conclusions and any recommendations resulting are made to the Minister of the Day. And again, I think this would be extremely beneficial to the operation of this legislation. Beyond that, there is another term that says recommendations under relevant subsections may include amendments to this Act, including to part seven, the Solicitors Acts 1954 to 2015, or any instrument made under those acts as the authority considers appropriate arising from such findings and conclusions. Finally, it says, in conducting a review under this section, the authority shall consult with the Competition and Consumer Protection Commission, professional bodies and such other persons as the authority considers appropriate for such purpose. I would like to see amendments being tabled for this, and I will certainly be looking to do that, because I do think we need to have this ongoing review of this legislation. We cannot just basically enact it and then think it is going to be fit for purpose to the future. We have plenty of challenges still coming down the road in terms of, I suppose, instigating this legislation, and we need to be able to ensure that it is doing the very thing that it is supposed to do, which is to reform the delinquent situation we have had in this country for years in terms of personal injuries compensation. I would also ask Minister, and by the way, just in terms of those, I am happy to point you to those references that I have mentioned, Minister, but one of the other things I think we need to do is we need to stop some of the scaremongering that is being carried out by some parties who would rather see maybe this legislation not being enacted fully. One of those is the recent media reports that awards for minor injuries would not cover medical costs due to inflation. That is completely erroneous. Medical costs and other out-of-pocket expenses are covered under the special damages provision and they are not affected by any recent reforms. So again, Minister, maybe just some further public information needs to be put out there to show that this legislation has been worked on for quite a period of time, and maybe too long, but at least we now seem to be getting to something that is going to deliver reform into the area. As I say, having considered the length of time that we have spent in this country talking about insurance reform, we now have to be sure that what we are going to enact is fit for purpose, that it can be adapted into the future to whatever other difficulties may come down the track. So to all of that, as I say, Minister, I welcome where we are going with this legislation. I think I will be tabling some amendments, but I welcome it to the House broadly. Thank you.