In his Irish Times Article dated 29th April last titled “Insurers strangely quiet on plan to raise award limits” John McManus questioned why the insurance companies were not up in arms at the Government`s plans to “increase the size of awards that can be made by the Circuit and District Courts”.
The Courts Bill 2013
Under the Courts Bill 2013 the Government aims to increase the maximum monetary award in the District Court from €6,384 to €15,000, and to increase the maximum Circuit Court award from €38,092 to €75,000 (though, in personal injuries cases, that award will be capped at €60,000). The practical effect of this, it is envisaged, will be a reduction in legal costs. For example, as it currently stands, if a party wishes to claim for a sum of €40,000, he is obliged to issue his proceedings in the High Court, thus attracting High Court legal costs. If the jurisdiction limit of the Circuit Court was increased however he could then bring his claim in the Circuit Court, thus only subjecting himself to costs at that lower level.
Increasing “the size of awards” or increasing the jurisdiction of the Courts?
On reading Mr McManus` Article a lay person could be forgiven for misunderstanding that the purpose of the Courts Bill was to increase Court Awards. This could not be further from the truth. Cases which were previously heard before the High Court, where the Plaintiff was likely to be awarded anything up to €60,000, will, if the Bill is enacted, now be heard by a Circuit Court Judge. This does not mean that there will be a higher Award. Indeed, there is every possibility that a Circuit Court Judge could make a lower Award than a High Court Judge who would be more experienced in hearing Claims of this nature. What it does mean is that the legal costs, for both Plaintiff and Defendant, will be much lower.
A Cause for Celebration by Insurers
Mr McManus quotes Dorothea Dowling, Chairperson of Injuries Board (PIAB) who appears now to be regarded in some quarters as the Dali Lama of Insurance, in stating that the insurance industry has a “vested interest in seeing awards rise” and that “raising the limits of what can be awarded in the lower courts creates an incentive for people to try their luck in these courts rather than go through Injuries Board”.
This is utter nonsense. The reason why the insurance industry is staying quiet is that it has nothing to say. Why would it object to the Jurisdiction of the Court being increased where that will result in it being able to contest Claims at lower cost?
Why the lady doth protest so much?
It is perhaps more appropriate to ask why Dorothea Dowling is protesting about the Bill and it will become clear that what Miss Dowling fears is an exodus of Claims from Injuries Board to the Courts, where claimants will now be able to pursue Claims at lower cost in the Circuit Court, than those arising in the High Court. Up to this Injuries Board could put the fear of God up any Claimant warning him of the prohibitive costs of a High Court Action if he did not accept an Injuries Board Assessment. Now maybe it is Miss Dowling who is fearful?