Insurance companies making higher profits are the only certain winners of the new system for assessing personal injuries, writes Paul Cullen, Consumer Affairs Correspondent.
Over two years after it was set up to slash legal costs in personal injury claims, a comprehensive picture of the performance of the Personal Injuries Assessment Board (Piab) is only now beginning to emerge.
That picture is neither as rosy as the bold assertions made by the board nor as dire as the fulminations against Piab by those lawyers whose personal injury practices have been decimated since it was set up.
Figures obtained by The Irish Times appear to show that insurance companies rather than the consumer are the big winners from the State's decision to replace the old courts-based system with an administrative service making decisions on the basis of medical reports, without the need for solicitors, barristers or expert witnesses.
Piab itself acknowledges that it has made little difference to the size of awards being made to people who have suffered various types of personal injuries.
The processing of claims has, however, speeded up, though not quite as fast as Piab asserts.
It says it is three times as fast as the old system, but the claim that the vast majority of cases are processed in nine months ignores the fact that there is a preliminary period preceding the assessment stage that takes up to four months.
Even so, assessing cases in 12 to 13 months represents a significant improvement for applicants at a time when they may be suffering major stress and ill-health as a result of their injuries.
Processing a €20,000 claim under the old system used to cost an additional €10,000 in legal costs; that has been reduced to an average of €1,300. Piab says it has saved over €30 million in its work so far.
But where is this money going? While the establishment of the board has badly affected lawyers' personal injury work, there are doubts as to whether the insurance industry has passed on all savings to consumers.
Premiums are at their lowest level since 1999 and motor insurance cover dropped 18 per cent in 2004, the latest year for which figures are available.
However, car insurance company profits rose 26 per cent in 2005 and insurance giant Allianz made almost as much profit from its Irish operation as it did in the UK. Underwriting profits in the industry in 2005 were over €800 million.
With banks and other companies starting to offer insurance, consumers might be forgiven for thinking there was greater competition in the market, but in fact the number of insurers underwriting these policies remains at a handful.
In spite of this, there is little indication as yet that the Government is ready to tackle the issue of high profits in the insurance business.
Lawyers, at least those in personal injuries, detest Piab, and why wouldn't they, with its central role in the demise of a €½ billion a year industry?
An audible "hear, hear" went around the profession when the late Mr Justice Sean O'Leary, in an article published last month after his death, accused the board of "creating a culture where all claimants for personal injury can be characterised as "insurance fraudsters".
However, the latest figures show the legal profession may be down, but it is not out. Some 13,000 of the 40,000 applications made to Piab so far have been released by the board into the hands of solicitors willing to bring them to the courts. Only 62 per cent of the assessments made by the board have been accepted.
And over 90 per cent of applicants are opting to work through a solicitor rather than dealing directly with Piab, even if this means having to pay legal costs.
While the number of writs being served each year has dropped dramatically, from an average of over 30,000 before Piab was set up to about 7,000 to 8,000 now, the fall in the number of cases actually coming to court is less steep; from about 3,000 each year pre-Piab to about 1,800 in 2005. So the legal costs are still mounting up in the most contentious cases.
Personal injuries claimants want the largest possible settlement in the shortest possible time. It isn't clear from the data currently available whether consumers are better off accepting Piab's awards or going on to litigate.
Neither is it clear whether insurers are prepared to offer more to those who reject Piab awards in the hope of avoiding expensive court costs.
Clearly, the new system has work to do to overcome customer resistance, even if much of this may be inspired by doubts planted by the legal profession.