Motor and personal liability insurance premiums will double from next year as a result of legislation that will allow the Circuit Court award up to £78,756 (€100,000), a Government-appointed expert group has warned.
The Motor Insurance Advisory Board's alert to the Department of Enterprise, Trade and Employment is supported by IBEC and legal figures, The Irish Times has confirmed.
Under the Courts and Courts Officers Bill, 2001, the limit on Circuit Court awards will jump from £30,000 to £78,756, while limits on District Court awards will rise from £5,000 to £11, 813).
Premiums, which are already rising far beyond inflation, will escalate because insurance companies will have to boost their reserves sharply to provide for higher awards in coming years.
Yesterday the Minister for Justice, Mr O'Donoghue, said the change will mean that up to 80 per cent of personal injury cases will be heard in the Circuit Court rather than the High Court.
This would mean lower legal costs and bring justice "closer to the people", the Minister told leading members of the Law Library yesterday.
However, Mr Tony Briscoe of IBEC disagreed: "We believe the change will inevitably have an influence on the expectations on the levels of damages." Public liability premiums have risen by 40 per cent recently. Lower investment returns, claims losses and the impact of a series of recent court judgments will further fuel increases, he claimed.
The Circuit Court limit should instead rise gradually, Mr Briscoe said. The last increase in 1991 sparked considerable inflation in court awards, IBEC has told four government departments.
At present junior counsel deal with Circuit Court cases, but the higher limits on offer may encourage senior counsel to take briefs there.
The legislation should have come into force on January 1st, but it was delayed. It begins its Dβil Second Stage reading next month and should be law before next summer.
News of the MIAB's warning comes just days before the State Claims Agency takes responsibility for all actions against the government or State agencies.
