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Minister for Trade Promotion, Digital and Company Regulation, Robert Troy TD today launched a public consultation seeking views on how to enhance and reform the Personal Injuries Assessment Board (PIAB).
Since its establishment in 2004 the PIAB model has delivered major benefits by providing a low-cost, quick and fair option in injury compensation. The PIAB system annually saves tens of millions of euro which would otherwise be paid in processing costs by the parties, and ultimately by policyholders. However, the number of cases being finalised through PIAB has fallen in recent years.
In line with Action 18 of the Action Plan for Insurance Reform, the Department of Enterprise, Trade and Employment is seeking observations from the public and interested parties on the role of PIAB and the operation of the PIAB Acts 2003-2019.
Speaking on the launch of the public consultation, Minister Troy said:
"This consultation is an important action in the government’s insurance reform agenda. Reforming the PIAB process has been a top priority for me since taking office and as Minister with responsibility for PIAB. I have met regularly with PIAB and a range of representative bodies to assess the role of PIAB and develop proposals to enhance and reform the Agency.
"The 2nd Motor Report from the Central Bank clearly shows why reform is necessary. The clear message to the public from the report is financially they are hardly any better off going through the legal route for personal injury claims, and indeed it will take nearly twice as long for an almost similar sized settlement."
Minister Troy added:
"The proposals I am considering cover both administrative changes within the current process as well as potential legislative changes to increase the number of cases kept within the PIAB system. This consultation will run parallel to the ongoing work of officials from my department who continue working with PIAB and are actively developing proposals for legislative reform.
"The overarching principle of my approach is to have more personal injury cases resolved by PIAB in a faster timeframe and with lower costs. I am confident that meaningful reforms will arise in PIAB."
He continued:
"I am committed to delivering real reform of the PIAB model that helps reduce the cost of litigation and ultimately premiums. I would ask all interested parties to consider the issues highlighted in this public consultation and to submit their views and proposals on how to incentivise use of the PIAB model. Given the high cost of insurance is an issue that has an impact on the economy and society, I also encourage responses from members of the public to have their say on the proposed reform of PIAB.
"The overarching objective in seeking to enhance and reform PIAB is to bring more cases within PIAB’s ambit and reduce the number of cases that progress to litigation. Encouraging more claimants and respondents to avail of the PIAB model should lead to cost savings in the claims environment and should ultimately lead to reductions in insurance premiums."
As part of this process observations are sought from interested parties on the role of PIAB and the operation of the PIAB Acts 2003-2019.
The deadline for submissions or comments is 17 April 2021.
Insurance Reform - Public consultation on enhancing and reforming the Personal Injuries Assessment Board
The Programme for Government contains commitments which together clearly demonstrate the government’s ambitions for real reform of insurance to deliver an insurance system which is both affordable and reliable and one which underpins a vibrant economy.
The Sub-Group on Insurance Reform under the Cabinet Committee on Economic Recovery and Investment, chaired by the Tánaiste, with membership from Ministers and Ministers of State, is tasked with driving insurance reform on a cross-governmental approach.
The ‘Action Plan for Insurance Reform’ was launched on 8 December 2020. The Action Plan sets out 66 actions for reform to bring down the costs for consumers and business and to introduce more competition into the market.
In line with Action 18 of the Action Plan for Insurance Reform, the Department of Enterprise, Trade and Employment is now seeking observations from the public and interested parties on the role of PIAB and the operation of the PIAB Acts 2003-2019.
PIAB was established in April 2004 to fairly, promptly, and transparently compensate the victims of accidents involving personal injuries in a cost-effective manner.
PIAB independently assesses claims for compensation arising from personal injuries sustained as a result of a motor, workplace, or public liability incident. Under the Personal Injuries Assessment Board Acts 2003-2019, all personal injury claims, with certain exceptions, such as medical negligence cases, must be submitted to PIAB unless they are settled by the parties involved at an early stage.
Through PIAB certain classes of personal injury claim, where liability is uncontested, can be settled without the need for many of the costs associated with litigation, which can contribute to the high cost of settling such claims. To date, PIAB has received over 450,000 claims, of which consent to assess was received in over 230,000 cases and awards with a value of over €3.5 billion were made in over 150,000 cases. The PIAB system annually saves tens of millions of euro which would otherwise be paid in processing costs by the parties, and ultimately by policyholders.
The Central Bank has produced two reports on motor insurance claims which show that the pursuit of litigation is contributing significantly to overall settlement costs, and that the cost of claims settled by litigation has increased significantly since 2015. The reports show that on average legal costs associated with settling claims through litigation were 67% of the actual compensation amount, adding substantially to the overall cost of the claim, bringing the total average claim cost through litigation to over €40,000.