31 July marked the end of the legal term in Ireland. It was also the deadline for responding to a Parliamentary consultation about draft legislation to set up a regime of periodical payment orders in catastrophic injury cases. Earlier in the month, another important reform of Irish law was announced: the re-casting of consumer insurance law. Both are summarised in this post.
Mr Justice Quirke – a former High Court judge and, some time before that, international scrum half – was a key instigator of both measures. Although the projects borrow from legislation implemented in the UK, the recommendations made are quite distinct and the differences should not be overlooked.
Quirke J delivered a report on medical negligence and periodic payments (PPs or PPOs) to the President of the Irish High Court in October 2010. It recommended at regime of PPOs that drew from that applicable in England & Wales under the Damages Act 1996 (as amended) and included a draft Civil Liability (Damages) Bill. Over four and a half years later, the Irish Justice Department issued a revised draft Bill (which we reported on here). The main changes included: providing that PPOs could be used only in cases of “catastrophic injury”, removing a clause that would have allowed for variable PPOs and specifying that indexation could only be to consumer prices inflation (known as HCIP in Ireland). In addition, the draft Bill seeks to amend the insurance insolvency protection arrangements so that general insurers in Ireland would be able to make self-funded PPOs. Despite that, in our view the aim of ring-fencing the Irish State against high lump sum awards for clinical negligence probably remains the key political driver behind the legislation.
The Justice Committee of the Irish Parliament requested views on the Bill by 31 July. Justice Minister Fitzgerald said, on publishing the Bill in May, that she intended that the legislation would be in place this year. She added that she was “confident that the new measures can support catastrophically injured persons without imposing undue liabilities on insurance companies or on other private defendants.”
Like it English and Scottish counterparts, the Irish Law Reform Commission (IRLC) has been examining insurance law reform for some time. Earlier in July, it released a three hundred page report on consumer insurance contracts. This recommends “the enactment of legislation to reform and re-balance the duties of insurers and consumers” and talks of rebalancing the duties of policyholders and insurers – very similar goals to those expressed by the Law Commission in England in the run up the Consumer Insurance (Disclosure and Representations) Act 2012 and the Insurance Act 2015. Among the headline proposals put forward by the ILRC, which is chaired by Quirke J, are:
- reform of the pre-contractual duty of disclosure to require insurers to ask specific questions and to put consumers under a duty to answer truthfully
- replacement of the insurer’s right of avoidance for breach of the pre-contractual duties with “a system of proportionate remedies”
- abolition of the concept of warranties in consumer insurance, to be replaced by rules to define the risk and to protect consumers from what are said to be “unjust outcomes”
- recommendations aimed at providing direct rights to third parties
Although these concepts will be familiar to UK insurers because of the recent statutory reforms, it should be stressed that neither the detail of these measures nor the current underlying Irish insurance law which they seek to change should be assumed to be the same as that in the UK. Further study of the ILRC report will be required to understand fully the differences, and the impact on Irish risks, of the changes proposed.
It may be worth drawing attention to a point made by Quirke J from the bench in the completely unrelated area of fraudulent personal injury claims. Here, Ireland has had a statutory provision very similar to that in section 57 of the Criminal Justice and Courts Act 2015 in England and Wales for over a decade. The essence of both measures is that the court must dismiss the claim if it is dishonest, unless doing that would cause injustice to the claimant. [The only real linguistic difference is that the English provision requires the dishonesty to be fundamental and the injustice substantial.]
Dealing with an application, in a 2010 case, by a defendant to dismissal a dishonest injury claim, Quirk J said that “The fact that the dismissal of an action will deprive a plaintiff of damages to which he or she would otherwise be entitled cannot, by itself, be considered unjust.” (Higgins v Caldark & Quigley)
In our view, this conclusion must be correct and equally applicable in England & Wales. Surely the injustice required for a court not to dismiss the claim should have to be something over and above the (mere) forfeiture of any genuine elements? The legislatures of both countries have enacted provisions that have made the policy choice that meaningful fraud taints all aspects of a claim. It should not, therefore, be regarded as an injustice for these provisions to be used by defendants – in the right cases, of course – precisely as the legislatures as intended. This high level point actually links back to the ILRC report, above, on consumer insurance, which emphasises that: “There must be clear provisions within our laws which will deter fraudulent insurance claims.“
About the Author
Alistair Kinley is BLM’s Director of Policy & Government Affairs.
Alistair is responsible for BLM’s engagement with government departments and regulators on policy and public affairs issues and consultations affecting the firm and its customers. He coordinated BLM’s market-facing activities in connection with the Insurance Act 2015 and the consultations which preceded its publication and introduction in Parliament.
He is a member of the Civil Justice Council (CJC), a regular speaker and experienced commentator on legal and procedural reforms and was a contributing editor to the Law Society’s Litigation Funding Handbook (September 2014).