A new report by the Central Bank has found that the majority of injury insurance claims are still settled through litigation as opposed to the State’s Injuries Resolution Board.

The National Claims Information Database report said 68% of settlements were made through litigation in 2023. It found legal costs were significantly higher for cases involving litigation.

The Injuries Resolution Board, previously known as the Personal Injuries Assessment Board (PIAB), is an independent statutory body that deals with personal injury claims. All personal injury claims in Ireland, except for medical negligence claims, must be submitted to the Injuries Resolution Board.

The Injuries Resolution Board provides an independent assessment of personal injury claims for compensation following road traffic, workplace or public liability accidents.

Moyagh Murdock, chief executive of Insurance Ireland, said that the full impact of the Personal Injury Guidelines is yet to be realised due to the low number of claims settled under those guidelines.

The Central Bank report noted that public liability claims have risen by almost 40% from 2019 to 2023, and the overall cost of employer’s liability, public liability, and commercial property insurance claims in 2023 was estimated to be €630 million.

Although the number of claims has decreased from 50,600 in 2009 to 31,500 in 2023, the cost per claim has risen significantly.

The Manager of Regulation and Policy Development at Insurance Ireland said increases in litigation costs are an ongoing concern and the costs are ultimately borne by policy holders.

Michael Horan said too many cases are still being settled through litigation, even though compensation levels reached through the Injuries Resolution Board are on par with those reached through the courts.

“We still are in a situation where too many claims are being litigated. When you have 70% of injury claimants going through litigation, and that’s accounting for 89% of injury costs, that’s just too much and it’s adding costs to the system,” he said.

Responding to the report, Robert Troy, Minister of State with responsibility for insurance said the data shows that the insurance market was profitable again in 2023.

He said it’s “regrettable” that insurers have been slow to pass on savings to customers, despite Government reforms in the sector.

“With the reforms beginning to embed, insurers must begin prioritising accountability, transparency and fairness, ensuring customers are paying a fair price for their insurance premiums,” he added.

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 LLP, whose numbers can be found on our website www.nfg.ie, or email info@nfg.ie.