Thousands of people with personal injury claims are opting to pursue them in the courts rather than staying with the new "lawyer-free" system set up to handle such cases, writes Paul Cullen, Consumer Affairs Correspondent.
Almost 40 per cent of assessments made by the Personal Injuries Assessment Board (Piab) in the first two-and-a-half years of its existence have been rejected by claimants, figures obtained by The Irish Times reveal.
Meanwhile, of the 40,000 applications it has received, the board has been forced to refer almost one-third to the courts.
Claimants' mistrust of the new system remains high, with over 90 per cent of them opting to employ a solicitor to process their applications. The board deals directly with the public, bases its awards on medical documentation alone and refuses to pay legal costs.
Under the old system, lawyers got €1 in costs for every €2 paid out in personal injuries settlements.
The board has reduced the cost of processing claims, with savings of €30 million so far, but insurance companies have failed to pass on all this benefit to their policyholders.
The board says fears of a claims backlog are misplaced, with almost 95 per cent of cases being processed within the statutory nine-month period. By contrast, it says that the old system took an average of three years to process cases.
Motor claims account for almost 70 per cent of assessed cases, with the rest divided between workplace accidents and public liability cases.
All personal injury claims have to go through Piab. If an award is not accepted, Piab will issue an authorisation that will enable a claimant to pursue their claim for compensation through the court system.
Of the 40,000 applications it has received, about 13,000 cases have been authorised by the board to go to court. Generally, this means that liability is contested or that the claimant is not satisfied with the level of award. However, the board says only 4,000 court writs have been issued, so it believes the remaining 9,000 cases have been settled before going to court.
Since it was established, Piab has made over 6,500 assessments worth €131 million but only 62 per cent of these have been accepted. Piab says 6,000 cases were resolved at an early stage and 15,000 are currently in process.
Solicitors have claimed to The Irish Times that clients who rejected awards from the board have gone on to obtain higher settlements from insurance companies or the courts.
Chief executive Patricia Byron said she believed the legal profession was trying to "test" the new system by encouraging clients to go to court, but it was important that no legal fees were paid.
Piab, which was set up to help put an end to "compo culture", will receive about 25,000 personal injury applications this year, marginally fewer than the 27,000 a year predicted in a motor insurance report five years ago.
Ms Byron said that, in real terms, the fall was even greater, as the population and the number of cars on the road had both risen since then. She predicted a greater decline in claims as improved safety measures on the roads and in the workplace take effect.
"The trends are all in the right direction. Almost 75 per cent of awards are for less than €20,000. People are getting the same amount of money in a faster time, while cutting out the need for unnecessary legal intervention."
Motor insurance premiums dropped 18 per cent in 2004, the latest year for which figures are available, but profit in the sector rose 26 per cent in 2005. Underwriting profits in the industry generally in 2005 were over €800 million.