Minister lashed for plans to raise personal injury claims by 17%
Government TDs and business lobby groups have slammed plans to allow a 17% personal injury claims hike by the judiciary, warning it would 'wipe out' any progress in reducing insurance premiums.
In a statement, the Irish Small and Medium Enterprises Association (ISME) strongly criticised Justice Minister Jim O'Callaghan, who is set to bring a memo to Cabinet next week to legislate for the increase.
ISME claimed that Fianna Fáil TD Mr O'Callaghan's support for the increase is 'a capitulation to vested legal interests and undermines years of work to bring down insurance costs for SMEs and consumers'. Minister Jim O'Callaghan. Pic: Leah Farrell/RollingNews.ie
Fianna Fáil and Fine Gael backbenchers also expressed concern over the proposal. One TD in Fine Gael, which currently holds the Enterprise brief at Cabinet, said the move 'is not at all in line with the Government's focus on reducing the cost of business'.
Last week, it emerged that the Minister for Justice will seek Cabinet approval to begin drafting legislation to increase personal injury awards by 16.7%. The proposed hike, which will reportedly be brought before ministers on July 8, is based on a recommendation from the Judicial Council.
The board of the council, an independent body representing judges across Ireland, is required by law to review personal injury guidelines every three years. The group proposed in December that payouts should increase by 16.7%, citing 'significant global and national inflation' in the period since the last review. Pic: Gareth Chaney/Collins Photos
The recommendation was adopted by the council at large in late January and passed over to Mr O'Callaghan, who must put the amendments before the Houses of the Oireachtas for approval.
The memo from the minister will come following sustained pressure on the Government to bring down the cost of premiums, with officials in the Department of Finance currently working on an updated Action Plan for Insurance Reform.
ISME said the hike 'would lead to increases in insurance premiums for both businesses and consumers' and 'further reward a legal industry already profiting from vexatious litigation and huge personal injury payouts'. Neil McDonnell. Pic: Sasko Lazarov / RollingNews.ie
The association said: 'Ireland also has 14 times more personal injury cases than England and Wales, with a population 12 times smaller.'
The group's chief executive, Neil McDonnell, called the proposed rise 'indefensible' and said: 'Insurance costs have not fallen following previous reforms, and now the Government wants to undo the little progress that has been made.
SMEs and voluntary groups will bear the cost while legal firms walk away with bigger fees. 'Minister O'Callaghan will have to make a decision based on social good, not on the desire to maintain legal earning power.'
He also called for the Justice Minister to remove the judiciary from the job of setting the amount of awards and delegate it to an independent expert body such as the Injuries Resolution Board or the Workplace Relations Commission.
Discontent is also brewing in the Oireachtas, particularly among members of Fine Gael, which is endeavouring to be seen as the 'pro-enterprise' party in the Dáil.
Numerous Fianna Fáil sources also indicated discontent in the Justice Minister's own ranks and questioned whether the legislation to give way to the 16.7% hike needed to be brought forward in the coming weeks.
Cork TD Séamus McGrath said the Government must do everything in its power to 'put a downward pressure' on insurance costs.
'The proposal to increase personal injury awards needs to be considered very carefully, and I will be raising my own concerns about the reported proposals,' the Fianna Fáil deputy said.
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