Matt Shanahan urges binding review of PIAB and rising insurance costs

Minister, at the outset, I want to thank you for engaging in this and in your new brief and to be fair Minister Troy before you as well and as you know both myself and Deputy O'Reilly are members of the Enterprise Committee and this subject has come up in PLS in terms of Enterprise Committee work as well and I think insurance reform has been a long-running saga in Ireland to say the least of it and as I said to you I think I said to the Tarnished on the last day in committee I seem to remember the Fine Gael Minister in Wexford who came and went trying to deliver insurance reform and it wasn't possible but we have implemented PIA back in 2003 and to a lot of fanfare and I think people were expecting you know pretty significant things from that in terms of reform and what was it supposed to do essentially you know was to try and streamline the process and to try and reduce the costs these elevated costs both in the award side of the side and in the costs of claims and the legal fees and it looked for a while that that was going to have some success but over a period of time unfortunately a march came along and more and more and as well you're aware the majority of cases are not going through PIAB they're basically going towards the direction of the courts as they're being settled out of courts and we then had I suppose the appointment of the Judicial Review and Council to try and arrive at a better foundation in terms of the claims outlook to try and get a book of quantum that more reflected a fair book of quantum particularly in line that most of our insurance is written underwritten from the UK and outside and you know our book of quantum was completely out of whack with theirs so all of this was done as part of the ongoing PIAB legislation and we now have a book of quantum that is agreed and we have judicial guidelines guidelines around that which we would hope to see and it's still not happening by the way but we hope to see that our society taking stronger notice of those but I suppose where we've arrived at and with respect to the amendment that I have proposed to the Minister it was quite clearly prefaced on the basis of having a review procedure a recurring review procedure to ensure that all facets of the PIAB legislation were going to work as designed and also that we could track and see that we are making progress on the areas that we need to make progress on and I suppose what I had asked for and I was looking at the legal services legislation of 2015 and there was a review procedure built in there and essentially what it asked the Minister is that you would do a review within 12 and no later than 18 months of the initial enactment and then further on that you would provide a periodic review and report to the houses of the Oireachtas every three years further to that and basically from there any recommendations resulting could be brought in amendments to try and change the founding legislation that that was the reason and that was the reason and as I read it from your amendment proposed you know I don't see how we can get back at the founding legislation your amendment speaks to only this this latest draft of legislation that we're talking about I think that's a misstep personally and I just wonder I know Minister and I take your bona fides and your word that where you've said to me you know that we leave no stone unturned and we'll make sure that when we go back we look at this in detail but I would prefer to see something in the legislation that speaks to that now I accept that you have agreed to a review and I'm sure that probably wasn't easy in terms of where the department wish to be maybe it's very onerous on the department and you have committed to one I would prefer to have seen and maybe we can still get something done if you're prepared to accept some periodic review procedure I think it's needed Minister first and foremost for transparency I think the other thing that I was interesting to listening to a debate recently on radio about insurance and you know we've a very difficult insurance market here at the moment as well you're aware we've a significant number of underwriters who have left the market and we have players who have left the market and in order to try and entice a new competition into the sector which is what we all wish to see we must have better transparency in terms of I suppose you know where the payout and claims situation is going to land and at this moment in time you know you're presently working on I understand the duty of care the occupiers liability insurance and liability insurance we've had businesses this year we've had businesses this year we've had businesses that have had no claims and they've suddenly seen an increase in their insurance of 50% and the whole problem here is that you know we basically have largely a lot of latent claims still lying around but there isn't there isn't security I don't believe in the insurance sphere and we have had a reduction in motor insurance which is to be welcomed but at the same time we've had a dramatic rise in liability insurance and the difficulty again we won't have a review process potentially for that beyond maybe this one look back so minister I would really ask you and maybe you might in your response highlight to me what you feel more that you can give or what what I don't want to say guarantees because that's not fair but I think in terms of of the minister's office and maybe you won't occupy that chair somebody else will but how can we bind the department to a really meaningful review and clearly what that is going to mean that more and more cases are going to go through PIAB and we know that if they go through PIAB or whether they go through the courts the actual amounts of rewards are nearly the same but the legal fees are dramatically different I just looked at a table earlier today where cases in PIAB were being settled for 1,018 euro and they were costing 23,000 euro through the courts in terms of the legal fees aspect and that to me is just that that makes no sense and this is damaging I suppose credibility it's absolutely hurting business it's absolutely hurting policyholders and policyholders and I think we have to get to a point of insurance reform that people can believe in and I would as I say and I'm really I know we've spoken earlier today and I think you've given me your position and I do accept your position is difficult but I would ask you maybe in a couple of minutes if you could highlight to myself and anybody else who's watching you know what kind of guarantees can you give that we're going to have a robust process in terms of this review and if this review brings up something minister what is the legislative procedure to bring further amendments to the legislation how do you see that to the legislation how do you see that happening maybe if you'd highlight that that would be a help if you please go over with uh thank um both deputies and I appreciate um deputy shannon's amendment uh and um I appreciate uh both deputies uh remarks in the way we worked on this um deputy shannon's amendment is based as he said on the provisions contained within the legal services regulation act 2015 the personal injuries the personal injuries assessment board was established uh in 2004 and has been making assessments for more than 18 years the legislation that established it in 2004 has been reviewed several times since its original enactment and we've had amending legislation twice since I entered this house in 2007 and most recently in 2019 so it hasn't been a static piece of legislation uh it has been uh reviewed uh even without a formal review clause the current bill that we have here this evening uh is a result of a thorough examination of the legislation and the operation of the board it included extensive engagement with stakeholders and a certain while I wasn't minister in place at the time deputy troy was the the pls was particularly helpful um and that has led us down to introducing this new function uh for the board uh through mediation and I agree and we all agree that a review of these new powers of mediation is appropriate I'm concerned that a statutory requirement for a constant rolling review of the legislation which is what's envisaged in deputy shannon's amendment will result in a certain element of paralysis within the system that there's constant reviews um that people are constantly preparing for review or responding to a review and in the meantime what I want to see is mediation going to work and I want mediation to be given the space to work and I want uh PIAB or PIRB as they would have been on to be given the time the space to make mediation work so that we all hope that mediation will result in a much better outcome uh for those going to it and I really want the board to be given uh that thing to do secondly the statutory provisions regarding the legal services regulatory regulatory authority require the body to actually review itself so that it can uh review itself review the operation of its own act and then that it makes the recommendations to the minister having reviewed itself um I actually think my the amendment that I'm putting forward on behalf of the government that the minister of the day will undertake the review rather than PIRB reviewing itself and the minister of the day is answerable to the house I don't know who will be here but they are answerable to the house more so than uh the PIRB will be you'll get one more chance to go in as the proposal yeah Dr Shannon uh I've got a last camera corner uh minister yeah look as I say I accept your bona fides in terms of of the difficulties that you envisage and and the reasons that you've put out why you feel that uh a periodic review is difficult um I think we probably differ uh on that but I accept that that's uh your position in terms of of the commitment that you've given within the amendment to engage with stakeholders uh is there something that could be written within that to ensure that the minister of the day and the department would engage with uh I suppose umbrella groups or representative groups of stakeholders because I just worry about who is uh actually going to be speaking to the policyholders here and I think it's very important if we're talking about insurance reform we're talking about trying to reduce costs and there's no point in talking to other people around the process if we're not talking to those who are paying the actual costs and the bills and who are supporting uh the activities so I suppose that's the first thing um the second thing as you as you say that this review that you propose will be undertaken by uh the minister of the day and um okay I can see how that would uh probably make sense the question is will it be done to an external appointed body would would you think the plan would be to appoint some external review process or will it be just done in house as a report that the minister would present to the house and again there's obvious uh difficulties with that and I think that uh what you've said is we don't want to go back and second guess legislation or reform I think that's exactly what we should be doing to be quite frank with you I think there's a lot of legislation passed in this house that we should have some type of a look back uh facility for it and I know you say look it's possible to bring um people to bring a bill or bring a private motion or all that it would be far easier if it was enacted if it was set within the enactment of the legislation that that process was there uh but as I say look minister I've I've heard you and I've spoken to you a number of times and I thank you again for the engagement and I think it has been uh positive but I think the the proof is going to be in the pudding in terms of this and you've committed to a review I believe it cannot be comprehensive enough and it cannot be wide-ranging enough and I would like to see recommendations resulting from it as well that might actually make their way back into the house it would work and that perhaps there might be some element of that maybe as part of the the Shannon debate that could be recorded as well that would that would give people comfort that at the very least there's a there's a halfway house between the very rigorous review proposed by deputy Shannon um and the review proposed by the minister and I'm not suggesting it's not rigorous but that there there would be some kind of halfway house there that maybe that could be discussed between now and when this makes its way to the Shannon I think we're all agreed this this should go through people are waiting on us we want to see it it's it's progressive etc so um perhaps there might be a bit of opportunity there thanks can I call it up we um you know the amendment is very clear um the ministerial amendment is clear that you know the minister should consult with the board and other such persons as the minister considers appropriate it's deliberately not prescriptive because there could be you know relevant persons uh in a couple years time they may not exist now but it does put a requirement on the minister to consult uh and to consult people in this space and I think you know there's one certainty the officials are their successors will will be there when we may not and they've shown huge consultation a huge spirit of cooperation in trying to make this work and I know that will continue uh within um the within the department uh I'd also say that my reading of a deputy Shannon's amendment is that it's a rolling review it's not periodic and that speaks to my concern deputy or in particular about that it will be constantly under review and that we won't get the space to actually get the function underway and get the function up and running um and my review is targeted at the mediation side of things because as I've said since 2004 we've had two separate pieces of legislation um in 07 and in 19 uh updating the whole thing this will be the third piece of PIAB stroke PIRB related uh legislation so I I think we haven't left it there we we are watching it we're not throwing it out there and going away it'll be under constant scrutiny and the review process as I've laid out in the government amendment um lays out that there will be consultation and it has to be done with a given time period clarify deputy will be this amendment I'm going to put to the floor now that means your amendment then can't be put if the amendment is no I thought we'll come to it in due course but just just the clarification so at this point um I'm going to put the amendment so the amendment has been pressed by the minister so in the chalk is that agreed that the amendment will be made agreed so amendment number two is agreed and we'll move on to amendment number three it cannot be moved because well number one has been already discussed but two it's an alternative so we're moving on now to the final amendment um in the name of the minister rice i thank both deputies uh for their engagement on the last amendment the third and final amendment is a technical amendment relating to commencement manners for the provisions of the bill the amendment provides that the new mediation function may be commenced separately for different classes of claim this models how the original act was commenced in 2004 the second stage debate stressed the importance of a properly operated mediation function providing that mediation may be commenced in a staggered manner would allow the board to manage the introduction of mediation in a careful and considered way providing the board with additional functions to increase the number of claims settled through its process will increase the number of claims that are settled faster and as deputy channel referred to earlier at less cost than other settlement channels this in turn should have a knock-on effect on the cost of insurance and i'll speak to that at the end of the process uh and again i'd like to uh thank the deputies for their engagement today you propose all the amendment has been pressed is it agreed that the amendment be made that's the end of the amendment so we're moving on um land image right hig on kuigo came we now proceed to the fifth stage i'm asking the minister to move that the bill do now pass can i just say a few remarks um i'll ask concurter with your permission i i feel rather like a rugby player who got the ball just before the try line and threw it over the try line uh and i do want to acknowledge the huge work um that deputy robert roy has put into this legislation um uh and you know i know that he engaged in a lot of consultation uh previous to this and i'd like to thank a deputy uh deputy o'reilly and channel have been particularly engaged in this on the committee uh and senator mullen as we proceed to the senate um but i particularly want to thank the officials involved that are here with us john and i'm uh and the team in the department who are continuing to put extraordinary work into this um and i wish this function every success i think we all have a stake in it that is is successful and i want to reach the team at piab um stroke pi rb every success but we are doing a lot of heavy lifting in this house in relation to insurance um across party working collectively but also at government level and i think that the work that we are doing should be resulting not just in reduced motor premiums but in reduced premiums on employers and on public liability and i think a message needs to go from this house this evening to the insurance industry we're doing heavy lifting for you it is time you pass on the benefit to your clients to your consumers um and let them be absolutely assured that we continue to sit on them until they pass on the benefits of this legislation to their claimants from all good last night you