Background
In July 2018, the Personal Injuries Commission (PIC) published its second and final report. The Commission, established in January 2017, was tasked with investigating the rising cost of insurance and the scale of personal injury claims in Ireland.
The report made clear a stark reality: general damages for soft tissue injuries, including whiplash, in the Republic of Ireland are on average 4.4 times higher than comparable awards in Northern Ireland, England and Wales.
This disparity has fuelled rising insurance premiums, placing significant pressure on consumers, small businesses, and community organisations.
Key Findings of the Commission
1. High Compensation Awards
The PIC confirmed that the elevated level of awards for relatively minor injuries has had a negative impact on businesses and individuals, driving up the cost of insurance and encouraging a culture of exaggerated and fraudulent claims.
2. Judicial Guidelines Needed
The Commission recommended that Ireland adopt a system of judicial guidelines, similar to those already in place in Northern Ireland. These guidelines would provide judges with consistent parameters for assessing general damages, helping to reduce inconsistency and excessive awards.
The upcoming Judicial Council Bill was highlighted as an opportunity to introduce such reforms, creating a framework for fairer, more predictable compensation.
3. Judicial Recalibration in Practice
The report welcomed recent judicial developments, such as Jedruch v Tesco Ireland Limited [2018 IEHC 2005], where Justice Barr recalibrated the approach to assessing general damages, taking guidance from earlier case law (Fogarty v Cox [2017] IECA 309). This shift was seen as a positive step towards consistency.
4. Standardised Medical Treatment Plans
Another key recommendation was the introduction of standard treatment plans for whiplash and soft tissue injuries, similar to models in Ontario, Sweden, and South Australia. These systems emphasise early medical intervention to reduce the duration and severity of injuries, cutting down on prolonged claims.
5. Data Recording and Monitoring
The Commission criticised the lack of reliable data within the insurance industry regarding injury claims. It called for a centralised database to track claim frequency and outcomes. While the Minister of State for Finance, Michael D’Arcy, acknowledged the need, he indicated a system would not be in place before 2019.
Concerns About Fraud and Exaggerated Claims
The report raised alarm over Ireland becoming a destination for those seeking high payouts, with some groups exploiting the system through fraudulent or exaggerated claims. This so-called “holiday compensation culture” poses a challenge to insurers and businesses alike.
The Commission recommended stronger countermeasures by the State, An Garda Síochána, and insurers.
Criticism of the Report
Not all responses to the PIC were favourable. Justice Marie Baker, then recently appointed to the Court of Appeal, questioned some conclusions. She emphasised that the principle of full compensation for negligence is deeply rooted in law, and proposed alternative reforms such as a dedicated medical negligence list in the High Court.
Industry Response
The insurance sector welcomed the report. Rachel McGovern, Director of Financial Services at Brokers Ireland, stressed that high insurance costs harm consumers and businesses alike. She noted that while fraudulent claims must be tackled, genuinely injured claimants should not be made to feel like fraudsters for pursuing legitimate compensation.
Conclusion
The 2018 Personal Injuries Commission report exposed the scale of Ireland’s whiplash claims crisis, linking disproportionately high awards to soaring insurance premiums and a growing risk of fraudulent claims.
While reforms such as judicial guidelines, better data monitoring, and standardised treatment plans are still developing, the report represents a significant step towards restoring balance and fairness in Ireland’s personal injury system.
For businesses, insurers, and claimants alike, the report offered hope of change—though as the Commission acknowledged, it will take time to rein in Ireland’s so-called “runaway claims culture.”
