Assessment of Personal Injury claims in Ireland: Katrina McAteer comments on the lessons for UK litigation.
I was instructed recently to advise in relation to a personal injury matter being pursued in the Republic of Ireland. Recent change in the Irish system for the assessment of personal injury damages has resonance for litigation in this jurisdiction, particularly in the arena of costs. The very fact of the fixed costs regime for pre-issue fast track matters indicates that costs remain very much a primary concern for litigation funders in the UK in this post-Woolf reforms era.
Personal Injuries Assessment Board
In an effort to tackle the high cost of insurance in Ireland the Irish Government has set up the Personal Injuries Assessment Board (PIAB). As of July 2004, all personal injury claims (other than medical negligence) must be referred to the PIAB before proceedings can be issued.
The PIAB has no role in determining liability and it will not make any findings of fact in relation to fault or negligence. Its role is limited to valuing claims and making awards, which can be accepted or rejected by the parties. The PIAB must notify the parties of its assessment within nine months, which may be extended by a further six months. If the PIAB cannot make an assessment within 15 months, they must issue a release to allow court proceedings to be issued.
If the PIAB assessment is rejected by either party the claimant is free to issue proceedings in the normal way. It is only with a certificate of release from the PIAB that claimant solicitors can issue proceedings. It is worth noting that the notification of the claim to the PIAB stops the running of time for the purposes of the statute of limitations. (Note also that the conventional three-year period has been reduced to two years in the Republic of Ireland from March 2005 by the Civil Liability and Courts Act 2004.)
Of profound interest to litigation funders in the UK is that the PIAB has no power to award legal costs. Indeed the rationale of the scheme was to remove lawyers from the process of assessing damages in personal injury cases. This situation has been fiercely contested. In a recent case taken against the PIAB by an applicant dissatisfied with the proviso that his solicitor could not communicate directly with (and receive responses directly from) the PIAB, the Irish High Court ruled that the PIAB cannot refuse to deal directly with solicitors acting for claimants. It is anticipated that the issue of legal costs will be the subject of the next action taken against the PIAB. Certainly, there seems to be a reasonable case for contending that if claimants are entitled to legal representation, they are entitled equally to their legal costs.
Effects of PIAB
The PIAB scheme is in its infancy in Ireland and it is therefore very difficult to say how it will affect those involved in personal injury litigation. The defendant insurance market has not unequivocally accepted the new regime. Defendant insurers are said to be very concerned that the scheme simply adds another level of bureaucracy to an already unwieldy and costly process. During the assessment period, the defendant must bear numerous costs and then once again throughout court proceedings, should the claimant choose to reject the PIAB's assessment.
Defendants have suggested that the scheme could lead to higher awards for damages than occurred in the pre-PIAB days. If a claimant rejects the PIAB's evaluation of his/her claim after a lengthy assessment period then that assessment period has simply added to the length of time in which the claimant can be said to have suffered injury and loss.
From the claimant's perspective, the scheme has both advantages and disadvantages. Certainly it has the potential to speed up the time in which claimants obtain damages, and assessments are based upon a databank of valuations, which are understood to be on the generous side so as to encourage acceptance by claimants. Whilst arguments that it is unjust to claimants to deny them the right to litigate their claims within the court system in the normal way are by now otiose, other sources of potential injustice arise. The PIAB scheme does not contain provision for heads of loss such as disadvantage on the open labour market or loss of earning capacity, which may be familiar only to legal professionals. There is therefore potential for gross undervaluation in cases where claimants have been seriously injured.
A brief foray into the Irish experience suggests that the new regime is not without pitfalls for all those involved in personal injury litigation. The real question is whether the demands of justice can be met whilst concurrently delivering lower costs experience to insurers, and thereby reduced insurance premiums for consumers.
This article was originally published in Solicitors Journal on the 22nd April 2005.