The average value of compensation awards for personal injuries has dropped by 38 per cent since new guidelines were introduced last year, the State body for assessing compensation has said.
A report for the Personal Injuries Assessment Board also showed a rising proportion of claimants accepting awards proposed under the April 2021 award guidelines in the first six months of the year.
The body was set up in 2004 to provide an alternative to the courts for settling compensation disputes without expensive litigation, the objective being to reduce insurance costs.
The question remained contentious, however. Political and business disquiet at persistently high costs prompted a fresh drive to reduce costs, with a new compensation system that took force in early 2021.
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In the new system the same award guidelines are used to determine both PIAB and court claims. The aim was to increase the prospect of claimants accepting a PIAB award instead of taking court action in anticipation of a higher award.
[ Average value of compensation awards for personal injuries drops 38%Opens in new window ]
[ Average award for minor personal injury fell to €13,825 last yearOpens in new window ]
“While it will take some time to see the full effects of the guidelines, particularly in respect of savings in legal costs and litigation, today’s report clearly shows that the guidelines are having an impact,” said Rosalind Carroll, the PIAB chief executive.
The overall average compensation award in January-June was €14,786, some 38 per cent lower than the rate before the guidelines. The PIAB attributed the reduction to its consistent application of the new rules, which contained “lower awards broadly speaking” particularly for minor injuries.
The body went on to say award reductions overall were stable since the guidelines were introduced, ranging from reductions of 38-42 per cent compared with previous awards.
The average motor liability award was €13,648 in the period, down 38 per cent. The average public liability award was €15,813, down 39 per cent, and the average employer’s liability award was €18,699, also down 39 per cent.
The average acceptance rate of awards rose to 48 per cent in June, which the PIAB described as a “significant and positive” trend. “The acceptance rate spiked to 60 per cent just before the guidelines came in. It had been around 50 per cent before that. It dropped as low as 33 per cent by July [2021] but has now recovered to 48 per cent and continues to rise.”
PIAB received 8,989 cases in the first half of the year, a 34 per cent reduction compared to the same period in 2021. The body attributed the drop to an “artificial increase” in the number of cases lodged in the first three months of 2021 before the guidelines took effect.
“We estimate there will be 18,000 [cases] received in the full year of 2022. This represents a 16 per cent estimated reduction year on year,” the PIAB said.
The body cited an assortment of factors likely to be behind the continued decline: “Traffic volumes have not fully recovered to pre-Covid levels, some people continue to work remotely (potential impact on road accidents) and some uncertainty created by the legal challenges is likely to have slowed claim applications to PIAB.”
