Mounting insurance costs and a growing litigation culture pose a threat to Irish society that could result in schools, sports clubs, playgrounds and Montessori schools all severely curtailing their activities, an Oireachtas committee has been told.
An alliance of businesses and organisations painted a bleak picture of the detrimental impact of what it says are “crippling” insurance costs will have on Irish society.
Representatives of the Alliance for Insurance Reform appeared before the Oireachtas Committee for Business on Wednesday to highlight what they said was the complete lack of sanctions or punishment for people who deliberately make fraudulent and false insurance claims.
In its opening submission the Alliance said increases in insurance costs would shut down businesses and childcare facilities, could prevent the provision of new playgrounds and would also close Montessori schools, because of unaffordable premiums.
It laid out ten steps which it argued should be taken by the Government to remedy the situation and lower the costs.
Peter Boland of the Alliance said the situation was now so serious it posed a “much broader societal threat”. “Society as a whole will shrink,” he said.
Eoin McCambridge of McCambridge’s in Galway said the Injuries Board now dealt with only 10 per cent of cases. He said insurance companies pushed to settle rather than defend cases because of an inconsistency in judgments. It was also very rare for the costs to follow plaintiffs when they lose.
Mr McCambridge, whose business has faced substantial increases in public liability insurance, highlighted the fact that Section 25 of the Civil Liability and Courts Act 2004 was very rarely invoked. This provides a means where those who have been found to have taken false insurance claims can be prosecuted.
“There is no downside to taking a case on fraudulent grounds,” he said.
“Somebody who has been found by a court to have made a misleading or inaccurate claim, and that is putting it very politely, is able to walk away scot-free without any further action being taken.”
Stephanie Reid, who owns the children’s play centre Monkey Business in Galway, said she has been claim free for five years but faces insurance hikes that could put her out of business in the future.
“You have to put the kids in bubble-wrap because everything is a risk now,” she said.
The Alliance has called for automatic referral to the Garda of fraudulent claims; the setting up of a Garda Insurance Fraud Unit; the regulation of claims management companies (which it says ‘harvest’ claims on the internet); reforms of the 2004 Act; a change of approach to calculating the Book of Quantum; more consistency among the judiciary; more control of the national database; and the reinstatement of the ‘Blue Book’ (which would allow more transparency).
