Lawyers bypassed to cut compensation costs, deputy prime minister says

Ireland's deputy prime minister Mary Harney vowed to bypass lawyers to cut compensation costs.

Her pledge to the Insurance Institute of Ireland's (III) annual conference grabbed TV, radio and newspaper headlines last week.

She told the conference in Wicklow that an interim Personal Injuries Assessment Board (PIAB) would be set up by next month, well in advance of the legislation that will underpin it.

The PIAB is designed to cut compensation costs by reducing the need for legal representation in compensation claims.

Insurers claim legal costs account for 40% of total claims costs.

"The board will concentrate on building relationships with the industry and on establishing the database of court awards in compensation cases and on other preparatory work so that the statutory board can hit the ground running," Harney said.

She told the conference she was convinced that high insurance costs reduced Ireland's competitiveness and caused job losses.

"International investors have raised it with me as a major issue of concern when it comes to setting up in Ireland," Harney said.

She also promised to take an action plan to government "within a matter of weeks", outlining a response to the recommendations in the Motor Insurance Advisory Board (MIAB) report.

She said that, although the MIAB report was about motor insurance, the plan would include recommendations on public and employers' liability.

Harney, who is also minister for enterprise, trade and employment, revealed her department would study the motor and liability insurance markets in conjunction with the Competition Authority.

She said that she would work with other ministers to implement a "number of measures to reduce the cost of liability insurance".

Lawyers are strongly opposed to the PIAB, but insurers have welcomed its establishment.

An institute spokeswoman said the III was "absolutely delighted" by the attention Harney's comments drew to the conference.