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Law Society dismisses idea new personal injury awards ‘ruse’ will help consumer 
There is “not a hope” that insurance premiums will start coming down quickly following the introduction into force of new guidelines on personal injury awards, according to a Law Society spokesman. 
From this Saturday the new compensation guidelines, which were adopted by the Judicial Council in March after a vote among the State’s judges, will come into effect. 
They are expected to introduce reductions of up to 50 per cent in the size of general damages awards for minor to middle-range injuries, which constitute approximately 80 per cent of all claims. 
The guidelines are also being adopted from this weekend by the Personal Injuries Assessment Board (PIAB), which assesses all claims that have not been settled directly, in a bid to stop such claims proceeding to litigation. 
Bodies representing business and wider society have called on the insurance sector to begin reducing premiums from Monday, but Stuart Gilhooly, a former president of the Law Society, said he did not expect this to happen. 
“On no Monday do I expect [premiums] to come down, no less this one,” said the solicitor, who has spoken for the body that represents the State’s solicitors in the debate over the reasons behind Ireland’s high insurance costs. 
‘Line their pockets’ 
“We’ve said from the word go that this is a ruse, and that is what it is, a ruse for the insurance industry to line their pockets to an even greater extent than before.” 
He said the guidelines would lead to “savage cuts” in the damages paid for smaller whiplash injuries, and also see many cases being heard in lower courts, where the legal costs are smaller. 
However, the insurance industry will come up with a reason not to pass the resultant savings on to the consumer. 
“They’ll probably throw a few crumbs from the table, I’d say. A little bit like last year, when they gave us all €30 back on our premiums when there were no accidents at all.” 
The Government was mistaken when it accepted the insurance industry’s argument that cutting award levels would lead to lower premiums, he said. 
However, the director of the Alliance for Insurance Reform, Peter Boland, said it expected that insurance premium charges should be “significantly reduced” from Monday. 
“If you renew from Monday, the financial risk associated with your policy is going to be significantly reduced.” 
Compensation costs 
Therefore, he said, the alliance, which represents civic and business organisations, expects premiums to be significant reduced also, starting from Monday. 
Neil McDonnell, the chief executive of the small and medium-sized business association, Isme, said that approximately 40 per cent of motor insurance premiums goes on compensation. 
On that basis, a 50 per cent cut in small and medium-sized awards should lead to a cut of approximately 20 per cent in motor insurance premiums. 
He said the reduced costs that would now be associated with most accidents should be immediately reflected in liability and motor insurance premiums. 
The establishment of PIAB in 2004 led to an immediate drop in the size of insurance premiums that persisted for five years, he said. 
Insurance Ireland, which represents the industry, said “competition law prevents us from commenting on future pricing”. 
The guidelines were a “very important step that will help us reduce costs over time”, the representative body said, and it was “optimistic for the future of insurance in Ireland”. 
The new guidelines should ultimately result in personal injury claims being processed more efficiently and consistently, it said in a statement. 
The need for expensive litigation will diminish over time and “we all need to work now to ensure that the consumer benefits” from these and other changes. 
“The market is very competitive and is very capable of reacting to the proposed lower cost of claims,” the statement said. 
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