Motorists whose cars have been damaged to the tune of thousands of euro through contaminated fuel have been given some hope by TDs and Senators.

Members of the Oireachtas Committee on Transport said they are prepared to recommend a change in the law to set up an industry-funded compensation scheme for beleaguered motorists who in future are faced with the full costs of replacing engines damaged by adulterated fuels.

The TDs and Senators will also consider recommending once-off payments from garages, distributors and the insurance industry to those who might not be covered for existing damage.

Sharp exchange

In a sometimes sharp exchange of views with representatives of the insurance industry on Wednesday, committee members said there was anecdotal evidence that insurance companies were refusing to pay out even on comprehensive policies, leaving individual motorists in some cases with bills for about €3,500.

Kevin Thompson of representative body Insurance Ireland said a total of 16 companies had settled 600 claims, with about 250 more in the pipeline.

He said some motorists had chosen policies on price, and the industry advice was “they should look beyond price at policies’ terms and conditions”.

Opposition transport spokesman Timmy Dooley said there was a need for greater information from the insurance industry and asked Mr Thompson to determine how many comprehensive policies, for example, had been deemed not to cover the damage.

Mr Dooley said he would also like information on the number of claims in dispute.

He said the committee wanted to get to the “full extent of the problem”, adding, “Personally, I feel the industry will have to do a whole lot more.” He said it was up to the committee to recommend changes in the law to bring in a compensation scheme for affected motorists.

Committee chairman John McGuinness said he agreed with Mr Dooley about the need for analysis and asked Consumers Association of Ireland spokesman Dermott Jewell how a compensation scheme for motorists already affected might work.

Industry scheme

Mr Jewell replied that a once off, industry-funded scheme might involve fuel retailers and distributors and in this regard the public liability insurance policies of these bodies might be examined.

He also said the small claims courts, where compensation was limited to €2,000, might offer some compensation. Mr Jewell said complete figures were hard to find, but gardaí said they had received more then 300 complaints.