Posted: September 3rd, 2013
New limits on whiplash injury settlements have been introduced in the Courts and Civil Law (Miscellaneous Provisions) Bill 2013 which have not found favour with representatives of the insurance industry.
Changes in the law introducedby the Courts and Civil Law (Miscellaneous Provisions) Bill 2013 – previously referred to as the Courts Bill – will increase the upper limits on whiplash injury settlements that can be awarded/approved by the District Court from €6,384 to €15,000, and by the Circuit Court from €38,000 to €60,000.
When proposing the changes to the law earlier this year, Justice Minister Alan Shatter said that the new limits on whiplash injury settlements would result in a reduction in legal costs due to fewer personal injury compensation claims going to the High Court; however two representatives of the insurance industry have claimed that the new upper limits could add as much as 30% to car insurance premiums.
“Amounts Are Too High”
Commenting on the new limits on whiplash injury settlements, Ken Norgrove from Zurich Insurance said “There amounts are too high. The Personal Injuries Board was great for straightforward and uncontested injuries but people will now take their chances in the District Court”.
His sentiments were echoed by Ciaran Phelan – CEO of the Irish Brokers Association – who accused the Seanad of passing the legislation without consideration of the costs involved. “These changes will see thousands more cases reach the courts this year” he said, “which obviously will increase the legal costs for insurers [and] which will in turn be passed onto consumers”.
Both industry experts predicted that the new limits on whiplash compensation settlements will encourage plaintiffs to “have a go” at a better settlement by pursuing legal action, rather than settle their claims for whiplash injury compensation out of court.
Were Premiums to Rise Anyway?
The warning of higher motor insurance premiums came a day after it was revealed that insurance premiums were likely to rise in any event, because of underwriting losses made throughout the year by insurance companies who have been undercutting each other´s rates to attract business.
Whereas an underwriting loss is a common occurrence for car insurance companies, they normally make a profit on investments income from funds they have on deposit which covers the loss. However, in recent years the return on investment has fallen which has reduced the overall income of the insurance companies and could result in the increase in premiums suggested by Mr Norgrove and Mr Phelan – only not for the reasons they claim.
Categories: Whiplash Compensation Claims