Michael Faulkner says the much vaunted Irish injury compensation system may not be as good as the figures suggest
For those campaigning for a radical overhaul of the UK's compensation system, the news that the Irish Personal Injuries Assessment Board (PIAB) is apparently providing cheap and fast compensation will have been heartening.
The PIAB's figures for 2005 show that it delivers compensation within nine months, compared to three years for litigated claims; while the average cost of processing a claim is only 10% of the award compared to 46% under litigation. Furthermore, the PIAB says most of the legal profession is now working with it.
The ABI, whose proposals for reform of the UK's compensation system draw on the PIAB model, says the figures show that reform can work and will hold them up in support of its model.
But dig a little deeper and there are still some questions about whether the PIAB is delivering the necessary access to justice.
The PIAB was set up in 2004 with the aim of overhauling the way compensation was delivered in Ireland. At the time, the Irish system was in virtual meltdown with legal and other costs running at a staggering 46% of insurers' claims spend.
Under the PIAB system, claimants complete an application and submit a medical report. The PIAB makes an assessment of any award after receiving representations from the liable party. The aim is to provide a streamlined system which reduces lawyers' involvement in the compensation process.
But concerns have been raised that the process is putting injured people off making a claim, denying them their right to compensation.
In 2004, the number of personal injury claimants using the courts system was 35,000. In 2005, the first full year of the PIAB's operation, this plummeted to 4,000, presumably because injured people were using the PIAB. Yet in 2005 only 951 awards were made by the PIAB.
Between 2001 and 2004, the number of litigated claims fluctuated between 31,000 and 35,000 a year. On this basis, one would have expected a similar overall volume in 2005. So what happened to the other claims? Have people, as critics argue, been put off claiming by the new system?
The PIAB says it received 20,000 applications in 2005 and that these are gradually working their way through the system. It expects to make 5,000 awards by December 2006 and 10,000 in 2007.
But 20,000 PIAB applications and 4,000 litigated claims in 2005 is still some way off the 35,000 claims brought in 2004. Furthermore, the fact that the PIAB is only expecting to make 15,000 awards by the end of 2007 appears to suggest that many of the 20,000 claimants are not receiving awards. (It must not be forgotten that there will also be claimants making applications in 2006 and 2007 who will be receiving awards too.)
The PIAB says changing attitudes to the compensation system mean many notified claims are settled without recourse to a PIAB assessment or without the issue of traditional proceedings. Indeed, it predicts that in the future, 40% of personal injury cases will be resolved by PIAB awards, 40% will be resolved through settlements, while 20% will require litigation.
Whether the PIAB's predictions ultimately prove to be true remains to be seen. And that is why its grand statements about its performance must be treated with caution. While its results for 2005 are superficially attractive, they are based on only a small number of settled claims.
The question of whether the PIAB achieves its initial aims will only be resolved after at least another year, when the true impact of the reform will be seen. IT