The current legislation provides general damages for non-pecuniary loss, such as damages for pain and suffering or for loss of amenity. They are intended to compensate a claimant for physical or mental injury and are distinguished from special damages, which reflect actual financial loss such as loss of wages or past/future medical expenses.
The Cost of Insurance Working Group and the Personal Injuries Commission published reports in 2017 and 2018 made a number of different recommendations, including that the Law Reform Commission (LRC) consider the constitutionality of capping general damages in personal injury actions.
An LRC report has found that introducing a cap on damages awarded in personal injury claims would be permissible under Irish constitutional law. The Commission report also notes that while it has examined whether capping of damages would be permissible under the constitution, it would be the responsibility of the Government, with advice from others including the Attorney General, to legislate for it.
The review of damages was prompted by an increase in insurance premiums for businesses and motorists, which the industry says is a result of excessive pay-outs awarded during personal injury claims. A Central Bank report in 2019 revealed that motor insurance in Ireland had risen by 42% in the last decade despite a 2.5% reduction in the average cost of individual claims over the same period.
The Bar of Ireland stated it welcomed the analysis by the Law Reform Commission.
It said that the report by the LRC fully respects the separation of powers between the legislature and the Oireachtas, the statement read “The assessment and award of damages should remain an independent judicial function; and is the most constitutionally permissible option available.”
The Alliance for Insurance Reform has also welcomed the new report from the commission.
The report, published in September of this year, Capping Damages in Personal Injuries Cases, examines four types of legislative model for capping damages. The Judicial Council Bill, which will be informed by the Commission’s reports, will seek to cap pay-outs for injuries such as whiplash.
The report says it would be appropriate that the new proposed regime, centred on the Judicial Council Act 2019, should be given time to be applied in practice.
NB – This is a guide for information purposes only and does not constitute legal advice. If you have an issue requiring legal advice, please contact any of the team at Nolan Farrell & Goff, whose numbers can be found on our website, www.nfg.ie