The publication of the Courts Bill 2013 has confirmed that the lower court injury compensation limits will rise for the first time in twenty-two years, but some are concerned this may lead to higher insurance premiums.
How much compensation the lower courts in Ireland are allowed to award in personal injury settlements has been fixed since the Courts Act of 1991 imposed the current ceilings. As the law stands at present, the District Court can only make compensation awards up to €6,384, while Circuit Civil Court awards of personal injury compensation are limited to €38,092. Under the new legislation, the lower court injury compensation limits will increase to €15,000 and €60,000 respectively.
The measures are aimed at reducing the burden of legal expenses for individuals and companies involved in litigation by having their cases heard in a lower division of the Irish court system, but whereas many might feel that lower litigation costs will have a positive effect on the price of insurance premiums, there are those who believe the opposite might be true.
The Department of Justice and Equality investigated the possibility that settlements of personal injury compensation awarded in the lower courts could increase as the ceilings were raised and noted that, when the idea was last proposed in 2002, increased limits were not brought in due to concern about “the potential impact on the levels of awards, which could, among other things, lead to consequential increases in insurance costs”.
Chairperson of the Motor Insurance Advisory Board, Dorothea Dowling, has also raised concerns that raising the limits of what can be awarded in the lower courts creates an incentive for people to ‘try their luck’ in the lower courts rather than go through the Injuries Board – which has its own established tariffs for the assessment of personal injury claims in Ireland. She suggests the changes proposed in the Courts Bill 2013 could see some 24,000 extra litigation cases being launched.
Ms Dowling warned that, when the lower court injury compensation limits were last raised in 1991, insurance companies raised their premiums ahead of the increases. She fears that there will be a repeat of the events from twenty-two years ago when the Courts Act 2013 is passed.