Personal injuries claims could amount to £5 billion (€6.35 billion) over the next five years, if the current compensation system and the new level of claims emerging are allowed to continue, IBEC, the business and employers group, has warned. IBEC has blamed the "spurious" claims which are often at levels which "do not reflect the extent of the alleged injury and which can be far in excess of the claimant's earning potential". These claimants "are encouraged by another force in society; those solicitors whose advertisements encourage people to make spurious or even fraudulent claims. The number of personal injury cases has grown as solicitors have been given permission to advertise their services".

IBEC is worried about what it describes as a "growing malaise in society", a culture in which "opportunistic, trivial and exaggerated claims for compensation are made and in which there appears to be no set rule for the level of compensation applied by the courts, particularly in relation to contributory negligence". A new report, published today, Ireland's Personal Injury Compensation Culture - Fact or Fiction showed that legal costs can account for up to 50 per cent of awards in smaller claims. The report also found the true cost of personal injury claims was between £660 million and £1.2 billion in Ireland in 1998, equating to almost 3 per cent of GNP. Although Ireland has one of the lowest accident rates in Europe, we have one of the highest injury claims rates, both in terms of value of claims and level of awards, according to the report.

The number of personal injury claims has risen by over 20 per cent in the past two years. The report also found that over 90 per cent of claims are settled out of court, "the decision to settle often based on the judge expected to hear the case".

IBEC has posed the question: "Do we really wish to have a society in which our public parks will have no play grounds, school principals will refuse to allow children into the school ground during break-time and the local parish hall will be unavailable for once-off community events?". This "appalling vista" will be faced, IBEC has claimed, unless immediate action is taken to curb the growing number of personal injury claims against business and the State are curbed.

IBEC has proposed a number of measures. These include:

The setting up of a Compensation Board, as an alternative to the courts, provided both parties agree. Legal representation would not be required.

A panel of judges to hear cases where the parties do not agree to the arbitration option, or where liability is contested.

Measures to remove spurious, trivial and exaggerated injury cases from the system for compensation.

A book of quantum or guidelines for the courts and the Compensation Board. This would use European examples.

Stricter control on advertising for personal injury litigation "as is currently carried on by a minority of the legal profession".

Solicitors should put up a bond.

Better communication between insurance companies and their insured clients.

IBEC stressed it places a very high priority on accident prevention and recognises that accidents can occur in spite of the best efforts to prevent them. However, business has to be vigilant to ensure it is not vulnerable to spurious claims. "In the final analysis," IBEC said, "it is the responsibility of the courts to ensure that the creeping corruption of the compensation culture, the cost of which is borne by every taxpayer in the country, does not provide a lucrative way of life for the frauds."