Legal costs not the cause of insurance hikes

Pat Mustard

https://www.lawsociety.ie/Documents/Gazette/Gazette%202016/Jan-Feb-17-Gazette.pdf

The Law Society has welcomed the publication of the Report on the cost of Motor Insurance, which was issued on 10 January. The Working Group on the Cost of Motor Insurance stated that it “did not find that legal costs were a major contributory factor in the recent increase in premiums”.

According to the article, the insurance industry has been unwilling or unable to release to data regarding settlements.

However, in its report, the Working Group on the Cost of Motor Insurance has recommended establishing a national claims database, with a requirement for the insurance industry to provide key metrics for publication by the Department of Finance, at regular intervals.

According to Law Society President, Stuart Gilhooly:

...hopefully this claims database will provide that sort of information. It will then give us an idea as to where the money is going and why premiums have gone up so much, because I think what’s perfectly clear from the report is that the legal costs and compensation costs are not the cause of premium rate increases. The report is very clear on that.

johnnyskeleton

The insurance companies seem to forget that the product they are selling is the handling of legal claims. If there were no compensation claims arising out of road traffic incidents (say we all have self driving cars that cause no accidents) then there would simply be no need for motor insurance.

If legal claims/fees are too high, then it suggests that they are seriously mishandling these claims. Most lawyers and people involved with the courts will be familiar with the fact that many if not most settlement offers tend to be below the actual amount until proceedings have issued or the case is about to be heard. The phrase "settlement on the steps of court" has come into common parlance.

Very often this is because insurance companies will not authorise their lawyers to offer the full value of the claim until the case is in court.

So if there is any unnecessary expenditure on legal costs, its because the insurance companies incur this by not offering the full amount of compensation. There are also cases which do not succeed, which the insurers correctly fight and incur costs, but that is unavoidable and there are provisions to discourage bogus claims.

I just find it funny that the insurance company thinks it can get away with this stuff. Imagine a plumber said that he had to charge more because he never does it right the first time around!

Pat Mustard

johnnyskeleton wrote: »

I just find it funny that the insurance company thinks it can get away with this stuff. Imagine a plumber said that he had to charge more because he never does it right the first time around!

Especially if the real reason for scalping people was to make up for his reduced investment income, which has nothing to do with his plumbing work in the first place.

TimingChain77

I can think of two major Insurance firms that got themselves into trouble.

One decided it would diversify into the Hotel business, purchasing hotels at the height of the property boom and just before the collapse in consumer spending. Another ended up investing in shares.

Its important to remember though that insurance premiums went up to cover the costs of insurance payouts. It was the payouts that caused the losses. Its true.

johnnyskeleton

TimingChain77 wrote: »

I can think of two major Insurance firms that got themselves into trouble.

One decided it would diversify into the Hotel business, purchasing hotels at the height of the property boom and just before the collapse in consumer spending. Another ended up investing in shares.

Its important to remember though that insurance premiums went up to cover the costs of insurance payouts. It was the payouts that caused the losses. Its true.

Payouts for what type of insurance claim though? There hasn't been much of a increase in payouts for motor claims as far as I know, yet it is motor insurance that is being increased massively. They have increased payout on home insurance due to unforeseen flooding etc. This is because they mismanaged the risk of that and has nothing to do with legal costs.

Maybe we should have a sort of glass-segal type act which separates motor insurance companies from others. I mean they do benefit from a legal requirement to carry insurance after all.

TimingChain77

Well,

I was being sarcastic. I think that recouping losses incurred on other activities might have something to do with premium increases.

However, if you take a quick look at the Personal injuries board awards statistics available on their site.

The number of awards they had in 2007 was 8,208 while in 2015 it was 11,734. It had been 12,420 2014.

Now you can interpret those stats in to ways. One is that it represents an increase in claims, and naturally payouts, and that this increase is likely to be replicated by an equivalent increase in claims that end up in the court, resulting higher legal fees etc.

Or you could interpret it and say PIAB increase in number of awards was offset by a decrease in claims ending up in the court. Or that award amounts fell. You would have to give one or other interpretation if you were to say payouts etc hadn't increased. You would also have to consider the likelihood that during the teeth of the recession legal professionals were advising clients to stop at the PIAB stage, where legal fees are low, rather than proceed to court, where increased legal fees are available.

domrush

Solvency II legislation, stricter regulation on reserves and the massive losses many firms made gambling on bonds and markets in recent years are the real cause of the rise.

hullaballoo

TimingChain77 wrote: »

Its important to remember though that insurance premiums went up to cover the costs of insurance payouts. It was the payouts that caused the losses. Its true.

This thread is about how untrue that is.

The available data says claims are more or less static and legal fees have decreased.

Insurance companies won't release information about claims that are settled outside of PIAB or Court awards. Unless they are paying monumental sums in those settlements to both plaintiffs and lawyers, they are lying about the reason for increased premiums.

As a lawyer who unfortunately works in this area, I can tell you that they are not selling cases for monumental sums and they certainly aren't paying big fees to lawyers.

On The other hand, what we do know is that insurance companies have recently had to double their cash assets due to EU regulations on liquidity. Do you think it's a coincidence that insurance companies had to double their cash assets at the same time they doubled premiums? I don't.

TimingChain77

Hullaballoo,

Would you like to address the PIAB statistics point? What available date are you referencing that shows claims are static?

Secondly as a legal professional are you shocked at my inference that claimants would be encouraged to proceed to court rather than settle at the PIAB stage?

Samuel T. Cogley

The PIAB system seems to encourage to many engage solicitors to navigate it anyway.

Absolutely not a legal professional here as I frequently prove.

TimingChain77

Having a solicitor to navigate it is fine.

The fees for such a service are much much much lower than if it ends up in court.

The main problem is that there is no deterrent for legal professionals to encourage claimants to proceed to Court, where they get the much higher fees and the claimant will often get a negligible increase in the award offered by PIAB.

Proceeding to Court creates a costs liability for the insurance company. To avoid that cost they may give claimant a small increase on PIAB offer and agree to pay the costs of the legal professionals, which will now include drafting, a day lost etc.

It would be really interesting to see what the difference between awards offered by PIAB and pre court settlements were. And then to compare those differences with increase in legal fees. I wonder how the ratio's would work out.

Pat Mustard

TimingChain77 wrote: »

The main problem is that there is no deterrent for legal professionals to encourage claimants to proceed to Court, where they get the much higher fees and the claimant will often get a negligible increase in the award offered by PIAB.

Lawyers act for clients. It is not the function of the justice system to deter lawyers from acting, generally. However, as we are on the subject, there are deterrents for plaintiffs.

One of them is contained in section 51A of the Personal Injuries Assessment Board Act 2003, as inserted by the Personal Injuries Assessment Board (Amendment) Act 2007, which states that if a plaintiff in a personal injuries action does not beat the Injuries Board assessment, the plaintiff will not be awarded costs and may also have to pay all or a portion of the defendant's costs.

That could wipe out a court award an leave a plaintiff with a substantial bill, on top of it.

That is a massive deterrent.

TimingChain77

It's not the function of the justice system to deter lawyers from acting? I think that's exactly why the justice system is in the state it is in. Anything for a few bob, wha?

That's a great piece of theoretical deterrent you quote.

Now....back to the real world.

The odds of an award of costs against the claimant where they claim was well founded but the award didn't beat the offer.....a highly unlikely occurrence. And I mean highly unlikely to happen.

The negligible increase in settlement for the claimant mentioned previously is sufficient to cover the more likely scenario where no costs order would be made.

The tactic is to create a cost liability for the defendant. That is where the negotiating leverage is created. A well founded claim represents almost 100% cost liability to the the defendant. A few days in the HC with SC etc can be an sizeable cost to negotiate over.

Would you like to hazard a guess at how many well founded claims ended up with a section 51A order?

When a settlement is reached do judges ask whether the settlement amount was greater than the offer?

Can parties agree to pay costs independent of any requirement for an order of costs?

Samuel T. Cogley

TimingChain77 wrote: »

It's not the function of the justice system to deter lawyers from acting? I think that's exactly why the justice system is in the state it is in.

This makes absolutely no sense. Could you please expand?

Our justice system is adversarial and funded by the parties. Do you propose a different model?

Pat Mustard

TimingChain77 wrote: »

The odds of an award of costs against the claimant where they claim was well founded but the award didn't beat the offer.....a highly unlikely occurrence. And I mean highly unlikely to happen.

The above is absolute nonsense.

If somebody's injuries are assessed at €30,000.00 by the Injuries Board, you say that is "a highly unlikely occurrence" that they wouldn't beat the assessment in court.

Highly unlikely that they would be awarded €29,000.00?

So much of your post is absolutely incorrect.

I don't have time to deal with it now but I'll come back to it later.

TimingChain77

Samuel T. Cogley wrote: »

The PIAB system seems to encourage to many engage solicitors to navigate it anyway.

Absolutely not a legal professional here as I frequently prove.

Samuel T. Cogley wrote: »

This makes absolutely no sense. Could you please expand?

Our justice system is adversarial and funded by the parties. Do you propose a different model?

You're "not" a legal professional so you wouldn't understand.

However, I did edit the phrase and included "Anything for a few bob, wha?"

It might make my point easier for a person "not" a legal professional to understand.

The system is also heavily subsidised by public money. The concept of justice is also a significant player in our forms of democracy and its undermining threatens the stability of our societies. Of course, the cost of the amoral and reckless behavior of the professional class operating in the private sector always ends up with Jo Public, in higher premiums etc.

Apart from that.... sure let them at it. A great bunch of boys and girls so they are. Zero regulation.....what could go wrong?

hullaballoo

TimingChain77 wrote: »

Hullaballoo,

Would you like to address the PIAB statistics point? What available date are you referencing that shows claims are static?

I am having some difficulty understanding what point is being made by reference to the PIAB statistics?

I would say that the increase in awards is due to the fact that PIAB have in recent times started making reasonable awards, having previously been making ludicrously low awards in many cases.

I cannot see any information in relation to the numbers of claims going before PIAB. They had that information until recently enough but appear to have removed it from their statistics page. I have posted on this topic previously in other threads and have examined the numbers available and they demonstrate modest increases in claims being brought year-on-year that reflect increases in economic activity. I will copy and paste a post of mine from last August that develops on this point.

Secondly as a legal professional are you shocked at my inference that claimants would be encouraged to proceed to court rather than settle at the PIAB stage?

I'm not shocked, no. I am well aware that there is a populist perception, driven by old media agendas and other factors that lawyers are bottom feeders who will only see to their own interests at all costs.

As above, there are very real checks and balances in place to ensure that lawyers cannot act in that way, even if they were minded to. Aside from the fact that going to court when you shouldn't means you won't get paid, there are codes of conduct and ethical regulation of both limbs of legal professionals involved in litigation and there are serious sanctions available to the regulators for lawyers who breach these.

While there may at one point in the fairly distant past have been some truth in the suggestion that the regulators were merely another old boys' club who would simply protect members' interests in the face of a complaint of misconduct, that is no longer the case.

The Bar Council and the Law Society produce reports that will show you they treat complaints of any and all kinds very seriously.

TimingChain77

Pat Mustard wrote: »

The above is absolute nonsense.

If somebody is awarded €30,000.00 by the Injuries Board, you say that is "a highly unlikely occurrence" that they wouldn't beat it.

Highly unlikely that they would be awarded €29,000.00?

So much of your post is absolutely incorrect.

I don't have time to deal with it now but I'll come back to it later.

You misunderstood. My point was that it would be highly unlikely, highly unlikely that the court would award costs against in such a circumstance. Or are you suggesting that the court would award costs against claimant if award was €1000 less.

It would also be interesting for you to put an amount by which a settlement/award would have to be to avoid a section 51A. Would an excess of €10 be sufficient.?

hullaballoo

TimingChain77 wrote: »

You're "not" a legal professional so you wouldn't understand.

However, I did edit the phrase and included "Anything for a few bob, wha?"

It might make my point easier for a person "not" a legal professional to understand.

The system is also heavily subsidised by public money. The concept of justice is also a significant player in our forms of democracy and its undermining threatens the stability of our societies. Of course, the cost of the amoral and reckless behavior of the professional class operating in the private sector always ends up with Jo Public, in higher premiums etc.

Apart from that.... sure let them at it. A great bunch of boys and girls so they are. Zero regulation.....what could go wrong?

Pretty much just trolling at this point, wha?

I'll humour you for the moment because the discussion is worthwhile irrespective of the lies you're posting.

Samuel T. Cogley

TimingChain77 wrote: »

You're "not" a legal professional so you wouldn't understand.

However, I did edit the phrase and included "Anything for a few bob, wha?"

It might make my point easier for a person "not" a legal professional to understand.

The system is also heavily subsidised by public money. The concept of justice is also a significant player in our forms of democracy and its undermining threatens the stability of our societies.

This is patently worng. Ireland has a Common Law system that costs the tax payer very little. That's actually part of the problem. A proper civil law, 'train judges in judge college' case manage and defray legal costs to the tax payer a la France/Germany costs an order of magnitude more than the Irish system.

Of course, the cost of the amoral and reckless behavior of the professional class operating in the private sector always ends up with Jo Public, in higher premiums etc.

Apart from that.... sure let them at it. A great bunch of boys and girls so they are. Zero regulation.....what could go wrong?

Again this is just patently worng. Yes our system has higher premiums, not by very much as it turns out, but our legal system plays a part becuase it puts the cost back on to private parties. The alternative is higher taxes, is that the system you'd prefer?

hullaballoo

I posted this in an AMA thread on car insurance where the Liberty Insurance rep was telling these lies: http://www.boards.ie/vbulletin/showpost.php?p=100696671&postcount=95 I have edited the links that no longer work to the current links in the below:

Liberty Insurance: Michael wrote: »

Hi,

The challenges our industry faces have been very well covered by the media in recent times, from increasing frequency and cost of claims to impaired profitability. Inevitably, all of these factors contribute to higher premiums for the consumer. That said, however, we are working hard at Liberty to limit the impact that the market price increases have on our customers.

Why is this lie being trotted out as a reason for increased premiums? I know you are being told this is a reason by your higher-ups but even minimal critical analysis reveals it is wholly untrue.

Some of the real figures around personal injuries claims are discussed here: http://www.irishtimes.com/opinion/insurance-industry-misleading-public-over-reasons-for-higher-premiums-1.2660988

And you can read the Courts Service report here: http://www.courts.ie/Courts.ie/Library3.nsf/PageCurrent/AC7C2772ABD0E1F880257FC0003D294C?opendocument&l=en

And you can see that the number of claims dealt with at PIAB level, before lawyers are involved at all has risen by almost 3x the number over a decade here: http://www.injuriesboard.ie/eng/Statistics

If you take everything together, the costs of personal injuries claims is going down rather than up, since lawyers fees, which are often a substantial part of what insurers have to pay are now being done away with since PIAB decided to get their act together and actually deal with cases reasonably.

The number of car accidents in this country are reasonably static on a per capita basis and death and serious injuries are declining.

In 2009, the maximum award for general damages was capped by the High Court for the first time and all cases that followed since then have been measured against that cap, so individual awards have been reduced on that basis.

In 2015, the jurisdiction of the Courts changed to bring the maximum awards in the District Court to €15,000 and Circuit Court to €60,000. Lower level courts historically give out lower awards in all cases and lawyers get paid less for work pertaining to lower courts so that now, the vast majority of cases will be Circuit Court or lower (excepting very serious to catastrophic injuries), which will mean both reduced awards and far lower legal costs.



The elephant in the room is that stricter solvency rules came into effect in January this year and, despite the fact that insurance companies have been aware that this was coming down the track, they played silly beggars and engaged in price wars with the likes of those amateurs in Quinn insurance and, instead of building the reserves of cash they have known for years they would need, they are now furiously loading premiums to try to ensure compliance with the regulations. (Credit: )

You're collectively covering your own mismanagement over the years by deflecting from the real issue, which is the above paragraph and throwing out an easy red herring - sure blame the lawyers, it's always the lawyers. Even when it wasn't the lawyers, I knew it was the lawyers.


The gas thing about all this is that insurers have done such a piss poor job of managing themselves in the face of increased cost of regulation that they are effectively pricing themselves out of the reach of most people because it is now financially prudent for them to insure as few motorists as possible and to ensure that those motorists they do cover are driving brand new armoured tanks with sub-2L engines.


My question to you, not that I anticipate an answer, is why insurance companies are insisting that it is the way they say it is when it isn't?

WWN have even picked up on it:

Motor Premiums To Rise Because None Of Your ****ing Business - Waterford Whispers News wrote:

Meanwhile, experts in the field of bull**** are blaming the legal profession for inflating the cost of claims, which, they say, are causing the substantial premium hikes.

“Yeah, it’s the lawyers,” a spokesperson for the financial regulator told WWN, whilst trying to hold in the laughter. “Yeah, that’s it; it’s the lawyers ha ha. Those damn fees they charge ha ha, ****s sake, you people are idiots,” the spokesperson added now rolling around in laughter and insisting on taking a snapchat of my ‘pathetic stupid face’.

Samuel T. Cogley

Incidentally the report is remarkably easy to read and very informative. In case people didnt follow the link from the Gazette it's here.

I thought 'ya man' from Men Behaving Badly had become a barrister for a second!

TimingChain77

Hullaballo,

The PIAB Statistics are available in their annual report. The statistics relate to the number of awards made and not the quantum of those awards.

Are you suggesting that the quantum has now increased and that more claims then end with PIAB? That there should then be a corresponding reduction in the number of claims proceeding to court?

The economic activity argument you put forward isn't really reflected in the statistics either. 5,573 awards in 2006, height of the Celtic Tiger.

Its not really an old media agenda to suggest that legal professionals are bottom feeders who see to their own interests at all costs, its kind of what capitalism is based on, self interest manifesting in the pursuit of monetary rewards. Don't worry you are not alone, its why people sell heroine to children, weapons to vicious dictatorships, invade countries for oil or sing deutschland über alles down a phone while a bank collapses taking pensioners savings and bankrupting a nation. Its human nature, a matter of degrees and ultimately how one perceives oneself. We all do things for money we might not do otherwise. Money makes the world go round.

You're not suggesting the legal profession operates on a alternative socialist system are you? Obviously not pushing heroine on the street but above a nudge towards court if there is something in it for themselves...or nah?

Activities coming nowhere near prompting a claimant to lodge a formal complaint. Plus its all happening above their head anyway. And whats the harm, they get a similar amount of money... if not slightly more in the end.

Not trolling.

TimingChain77

Hullaballo,

There is a problem with your interpretation of what the statistics prove.

Court statistics show 18,992 personal injury suits filed – a 7% increase on 2014

There was a slight decrease in PIAB awards in 2015, 11,734 as opposed to 2014, 12420.

However in 2006 there were 5,573 awards by PIAB and in the Courts there were just over 3000 personal injury suits filed.

Costs "may" have fallen but volume has increased.

TimingChain77

Samuel T. Cogley wrote: »

This is patently worng. Ireland has a Common Law system that costs the tax payer very little. That's actually part of the problem. A proper civil law, 'train judges in judge college' case manage and defray legal costs to the tax payer a la France/Germany costs an order of magnitude more than the Irish system.

What does the Irish Legal system cost the Irish State. What does it cost in France and Germany?

Let us compare figures and confirm as a matter of fact that what you are saying is correct.

I seen yer man from men behaving badly getting called. He's havin the time of his life down there.

Pat Mustard

TimingChain77 wrote: »

You misunderstood. My point was that it would be highly unlikely, highly unlikely that the court would award costs against in such a circumstance. Or are you suggesting that the court would award costs against claimant if award was €1000 less.

It appears that it is you who misunderstand.

The first thing is the fact that if the plaintiff's award does not exceed the assessment, he will not be awarded legal costs. If the lawyers are to be paid, then their fees (which are likely to have to absorb a big hit) can only come from the award.

The second thing is with regard to the risk of costs against the plaintiff for not beating a piab assessment. The lawyers are not going take a chance and advise their clients that this is something that won't happen - because it could happen. It is something that it borne in mind and it is a deterrent.

TimingChain77 wrote: »

It would also be interesting for you to put an amount by which a settlement/award would have to be to avoid a section 51A. Would an excess of €10 be sufficient.?

See here:

(3) Subject to subsections (6) and (7), if, as respects a relevant claim to which this section applies, a claimant brings proceedings in accordance with this Act—
(a) no award of costs nor any other order providing for payment of costs may be made in favour of the claimant where the amount of damages (if any) awarded on foot of, or accepted in settlement of, those proceedings does not exceed the amount of the assessment referred to in subsection (2), and

(b) where the amount of damages (if any) awarded on foot of those proceedings does not exceed the amount of the assessment referred to in subsection (2), the court, in those proceedings, may, in its discretion, order the claimant to pay all or a portion of the costs of the defendant or defendants.

NUTLEY BOY

SNIP I was being sarcastic. I think that recouping losses incurred on other activities might have something to do with premium increases. SNIP

"Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery." (Mr. Micawber - David Copperfield.)

Insurers operate a variant of the Micawber principle. They take a portion of the annual income and invest it across a range of stocks, shares, bonds, cash deposits and whatever. The cunning plan was that the returns from the investments covered the underwriting losses and turned that misery in to resulting happiness. Sadly, the investment environment became so adverse in recent years that the results have been miserable. So, they passed on the misery to us because we have to have motor insurance. [ P.S. We who insure our cars also fund the lovely people who drive with no insurance]

A second problem is the size of awards. If we keep paying out relatively high levels of damages that has to be financed from somewhere. Guess who ? The pool of risk in Ireland is relatively small so the more insurers are paying out the more it costs us individually.

TimingChain77

Pat Mustard wrote: »

It appears that it is you who misunderstand.

The first thing is the fact that if the plaintiff's award does not exceed the assessment, he will not be awarded legal costs. If the lawyers are to be paid, then their fees (which are likely to have to absorb a big hit) can only come from the award.

The second thing is with regard to the risk of costs against the plaintiff for not beating a piab assessment. The lawyers are not going take a chance and advise their clients that this is something that won't happen - because it could happen. It is something that it borne in mind and it is a deterrent.

You came back.. but it wasn't really worth waiting for.

Quick point So would €10 over the assessment be sufficient to avoid a section 51A? I see that you highlighted "ANY" so conceding a €10 increase could defeat the section 51A "deterrent" without having to explicitly concede the point.

I note you didn't address the point that the award of costs against was effectively moot.

The point you raise about no award of claimants costs. Yes their is the risk you allude to of the claimants legal team not getting paid. To attach significant weight to that one would have to believe that the legal professionals wouldn't take their fees out of any award the claimant got irrespective of the fact that the court didn't award costs. They would never do that now would they!! If they were feeling very generous they might apply a discount but guilty about taking fees were no costs award to the extent that they would walk away empty handed is stretching my imagination.

Either way, what it really represents is a re balancing of the negotiating power between the claimants legal professionals and defendants. Claimant says "think of the costs if we beat the assessment". Defendant says "think of the no award to you if you don't" . Then they settle somewhere in the middle.

I think you are missing the point that the objective is to get through PIAB so that legal fees apply. The idea that you have large numbers of cases going all the way to the steps of the court to get a negligible increase in settlement quantum and that this is all for the benefit of the claimant is an interesting proposition. The really interesting information would be to look at increases in awards and Legal Costs incurred.

TimingChain77

What seems to be obvious from the Courts statistics is that significant numbers of cases are being settled before they get to court.

This means one of two things is happening. PIAB is not fit for purpose and much larger settlements are being made to claimants be proceeding to court. (Personally I don't think this is the case in the vast majority of cases. It would mean that PIAB are way of a valuation in upto 66% of the assessments they make)

Or the difference between the assessment amount and settlement is negligible for the vast majority who proceed to court and proceeding to Court is a cynical fee generating mechanism used by the legal profession.

Unfortunately no one can be sure as Insurance companies won't release information.

The legislation should be introduced requiring settlement amount and legal costs to be reported back to PIAB so people can see what is going on.

At the minute the legal pros are blaming the insurance company and vice versa. They are both loading their pockets and jo schmo is picking up the tab.

hullaballoo

You are forgetting the cases where PIAB cannot make an assessment or the Respondent refuses to have the case assessed etc.

My pockets are well and truly lined with all these €200 drafting fees heading my way. :rolleyes:

TimingChain77

hullaballoo wrote: »

You are forgetting the cases where PIAB cannot make an assessment or the Respondent refuses to have the case assessed etc.

My pockets are well and truly lined with all these €200 drafting fees heading my way. :rolleyes:

Yes, and where purely psychological injury, but dealing with majority of cases.

Is that all you charge??? You're a novice my man. Still not bad for a copy and paste! Don't worry if you're lucky you will get a few motions appearances, notices etc. Although with the yellow pack prices you're charging it might not be great money :rolleyes:

TimingChain77

And one more thing?

Whats €200 * 18,000?

More importantly, why would someone attempt to suggest that the costs reward resulting from a HC PI settlement is €200? At only €200 per settlement it would be hardly worth all the effort, of course if its more than €200 per case, well.......

Pat Mustard

TimingChain77 wrote: »

Quick point So would €10 over the assessment be sufficient to avoid a section 51A? I see that you highlighted "ANY" so conceding a €10 increase could defeat the section 51A "deterrent" without having to explicitly concede the point.

This is extremely straightforward. There is no issue as to costs per S51A, provided that the award exceeds the assessment. There is no nuance here. I am not sure why you ask the question because the answer is obvious.

TimingChain77 wrote: »

I note you didn't address the point that the award of costs against was effectively moot.

It is a risk that cannot be ignored. It is a deterrent because it remains a risk. It is still possible that the plaintiff could have an award of costs made against him.

TimingChain77 wrote: »

The point you raise about no award of claimants costs. Yes their is the risk you allude to of the claimants legal team not getting paid. To attach significant weight to that one would have to believe that the legal professionals wouldn't take their fees out of any award the claimant got irrespective of the fact that the court didn't award costs. They would never do that now would they!! If they were feeling very generous they might apply a discount but guilty about taking fees were no costs award to the extent that they would walk away empty handed is stretching my imagination.

You have missed the point here. If legal costs are taken out the award, it could wipe out a massive chunk of the plaintiff's award. You talk about 'the legal professionals' but legal costs include costs of engineers, engineers' reports, medical reports, doctors' attendance fees, court fees, etc.

If costs come out of the plaintiff's award, the plaintiff is penalized. Therefore, the plaintiff is deterred from taking action where he might not beat the assessment. It's very simple.

TimingChain77 wrote: »

Either way, what it really represents is a re balancing of the negotiating power between the claimants legal professionals and defendants. Claimant says "think of the costs if we beat the assessment". Defendant says "think of the no award to you if you don't" . Then they settle somewhere in the middle.

I suspect that you must work in the insurance industry if you are talking about redressing rights in favour of the the defendant. If it was a fair system, insurance companies/defendants wouldn't have 3 months to wait before deciding whether to enter the Injuries Board process and insurance companies/defendants would also be penalised with regard to costs if they reject an Injuries Board assessment and a subsequent award doesn't come under that amount.

Rebalancing of power, indeed. Delusional stuff.

TimingChain77 wrote: »

I think you are missing the point that the objective is to get through PIAB so that legal fees apply. The idea that you have large numbers of cases going all the way to the steps of the court to get a negligible increase in settlement quantum and that this is all for the benefit of the claimant is an interesting proposition. The really interesting information would be to look at increases in awards and Legal Costs incurred.

When claimants hire lawyers, those lawyers expect to be paid. When an assessment of damages is made, only certain costs of the plaintiff will be recoverable. Other costs will not be recoverable and they will be payable by the claimant. He pays his lawyers out of his own pocket. Claimants only recover 250 euro for medical reports, even if those reports cost double that amount. Engineer's fees are not generally recoverable in Injuries Board assessments, at all. The cost of an engineering inspection, report and photographs could come to 1300 euro. However, the only way for a plaintiff to recover these legal costs is to bring action after the Injuries Board process.

You go on to say "the idea that you have large numbers of cases going all the way to the steps of the court to get a negligible increase in settlement". This supposes that the increase amount in the plaintiff's pocket is also negligible and it ignores the fact that the plaintiff may have been left with significantly less if he had accepted the Injuries Board assessment and paid his additional costs out of that.

Can you show evidence of this or can you back up this statement?:

The idea that you have large numbers of cases going all the way to the steps of the court to get a negligible increase in settlement quantum and that this is all for the benefit of the claimant is an interesting proposition.

TimingChain77

Pat Mustard wrote: »

You have missed the point here. If legal costs are taken out the award, it could wipe out a massive chunk of the plaintiff's award. You talk about 'the legal professionals' but legal costs include costs of engineers, engineers' reports, medical reports, doctors' attendance fees, court fees, etc.

If costs come out of the plaintiff's award, the plaintiff is penalized. Therefore, the plaintiff is deterred from taking action where he might not beat the assessment. It's very simple.

Most of the fees you list will already have been incurred at the PIAB stage.

Pat Mustard wrote: »

I suspect that you must work in the insurance industry if you are talking about redressing rights in favour of the the defendant. If it was a fair system, insurance companies/defendants wouldn't have 3 months to wait before deciding whether to enter the Injuries Board process and insurance companies/defendants would also be penalised with regard to costs if they reject an Injuries Board assessment and a subsequent award doesn't come under that amount.

Rebalancing of power, indeed. Delusional stuff.

I'm not sure I understand, are you suggesting that costs won't be awarded against them if they claimant is successful? As section 51A no longer applies the award could be less and the claimant could still get costs awarded.

The balancing of power relates specifically to the settlement negotiations. Both parties have something to lose if they insist on proceeding rather than settle.

Pat Mustard wrote: »

When claimants hire lawyers, those lawyers expect to be paid. When an assessment of damages is made, only certain costs of the plaintiff will be recoverable. Other costs will not be recoverable and they will be payable by the claimant. He pays his lawyers out of his own pocket. Claimants only recover 250 euro for medical reports, even if those reports cost double that amount. Engineer's fees are not generally recoverable in Injuries Board assessments, at all. The cost of an engineering inspection, report and photographs could come to 1300 euro. However, the only way for a plaintiff to recover these legal costs is to bring action after the Injuries Board process.

You go on to say "the idea that you have large numbers of cases going all the way to the steps of the court to get a negligible increase in settlement". This supposes that the increase amount in the plaintiff's pocket is also negligible and it ignores the fact that the plaintiff may have been left with significantly less if he had accepted the Injuries Board assessment and paid his additional costs out of that.

This statement supports my contention that the practice is a fees generating exercise with the caveat "legal professionals are not the only professionals getting paid."

Pat Mustard wrote: »

Can you show evidence of this or can you back up this statement?:

Quote:
The idea that you have large numbers of cases going all the way to the steps of the court to get a negligible increase in settlement quantum and that this is all for the benefit of the claimant is an interesting proposition.

Unfortunately not conclusively. The legal professionals and Insurance industry disappear somewhere down the four courts and everything happens behind a closed door. We can only speculate about what is going on.

What is clear is that PI claims have multiplied over the past 8 years.
What is also clear is that more claims proceeded to the Courts than were subject of an accepted award of PIAB.

Let us end on an agreement.? In an attempt to resolve this confusion and in the name of transparency. Legislation should be introduced requiring that award amounts and legal cost details resulting from settlements are sent back to PIAB where they can be compared with what was offered and rejected at the PIAB stage.

TimingChain77

Hollabolloo linked an article written by David Barnaville.

Obviously Mr. Brnaville's contention that the increase in claims related to the increase in economic activity can only stand if you, as he does, compare 2014 and 2015 figures but collapses in spectacular fashion when compared with claims made in 2006 during the height of the Celtic Tiger. Perhaps Mr Barnaville had tongue very firmly in cheek when he was composing that paragraph.

However what was more interesting was his claim that fees had fallen by 30-50%. I didn't realise there was a register of what legal professionals charged for their services? Is there a register? Who can access it, how can it be accessed? Was he basing that assertion on anecdotal evidence he collected at the water cooler? Or was he referring to fees paid using public money, legal aid etc, in which case tongue must have been firmly back in cheek as this would have been a completely inappropriate comparator.

If that's the defense offered........well, it might have been best not to offer a defense at all.

Pat Mustard

TimingChain77 wrote: »

Most of the fees you list will already have been incurred at the PIAB stage.

Yes, incurred but not recoverable. So the claimant has to litigate to recover. We have been over this point before.

TimingChain77 wrote: »

I'm not sure I understand, are you suggesting that costs won't be awarded against them if they claimant is successful? As section 51A no longer applies the award could be less and the claimant could still get costs awarded.

I'm not sure what you are attempting to say in response to what I wrote. If you have a clear question, I will respond.

TimingChain77 wrote: »

The balancing of power relates specifically to the settlement negotiations. Both parties have something to lose if they insist on proceeding rather than settle.

S51A is a stick to beat the plaintiff but you call it balancing of power.

TimingChain77 wrote: »

This statement supports my contention that the practice is a fees generating exercise with the caveat "legal professionals are not the only professionals getting paid."

Willfully ignoring my point is not the same as finding something to support your own.

TimingChain77 wrote: »

Unfortunately not conclusively. The legal professionals and Insurance industry disappear somewhere down the four courts and everything happens behind a closed door. We can only speculate about what is going on.

If you have nothing to support it, it's just an empty claim.

TimingChain77 wrote: »

What is clear is that PI claims have multiplied over the past 8 years.
What is also clear is that more claims proceeded to the Courts than were subject of an accepted award of PIAB.

Are you attempting to extrapolate that the hard-done-by insurance companies can justify their price hikes on the basis of increased cost of claims. Because if so, the Working Group Report disagrees with you.

TimingChain77 wrote: »

Let us end on an agreement.? In an attempt to resolve this confusion and in the name of transparency. Legislation should be introduced requiring that award amounts and legal cost details resulting from settlements are sent back to PIAB where they can be compared with what was offered and rejected at the PIAB stage.

I have absolutely no difficulty with a transparent system, where overall statistics for assessments, settlements and awards in relation to PI claims are recorded centrally.

However, I'd prefer that the information would be sent elsewhere, other than to a creature of the insurance industry.

TimingChain77

Pat Mustard wrote: »

Yes, incurred but not recoverable. So the claimant has to litigate to recover. We have been over this point before.

We are agreed that the driving force behind the litigation is professional fees rather than the award to the claimant. I do think that it should be pointed out that what a professional will charge will depend on who is paying. If a claimant pays from the pocket the charge is significantly less than if a settlement is reached whereby the insurance company foots the bill. Legal professionals tend to have an ongoing relationship with other professionals, specific doctors etc, when it comes to the provision of reports and are able to negotiate significant discounts on fees where claimant pays from the pocket. A kind of "I'll keep business coming your way and you can make it back next time the insurance company picks up the tab" type of arrangement.

Pat Mustard wrote: »

I'm not sure what you are attempting to say in response to what I wrote. If you have a clear question, I will respond.

Mmmm ok. You said there was no "penalty" where a respondent rejects assessment and a higher award is subsequently achieved. That is incorrect. The penalty is award of costs against them. Which you seem to consider a "beating stick" when used against the plaintiff. Also significantly a Plaintiff can achieve a lower award than the assessment that was rejected and section 51A would not apply

Pat Mustard wrote: »

S51A is a stick to beat the plaintiff but you call it balancing of power.

Again, this is purely in the negotiating of settlement. Without it all negotiating power create by the potential cost liability would be with the plaintiff.

Pat Mustard wrote: »

Willfully ignoring my point is not the same as finding something to support your own.

I'm sorry, was there a point contained in the paragraph which didn't focus on why the litigation route was being used as a means of recovering professional fees?

Pat Mustard wrote: »

If you have nothing to support it, it's just an empty claim.

Its observational, which is all it can be. Unfortunately the professional classes in this country are a law unto themselves. If they say the public can not have access to the information then that is what the law will say. The political class will no doubt concede that for reasons of "commercial sensitivity" the law must restrict the publics eyes.

Pat Mustard wrote: »

Are you attempting to extrapolate that the hard-done-by insurance companies can justify their price hikes on the basis of increased cost of claims. Because if so, the Working Group Report disagrees with you.

Hard by insurance companies. Haha, you jest old boy! I draw no distinction between the suits of the legal profession and the suits of the insurance industry. Hand in glove they both rely on the existence of an active PI industry to justify and maintain their considerable costs income. I try not to be distracted or confused by their faux dispute over who is to blame for a circumstance so financially beneficial to both.

Lies, Damned Lies and Statistics. The cost of each case "may" have decreased slightly but not nearly enough to offset the multiple by which claims have increased.

The economic activity point used as a defence by D.B in his article is interesting although not as he would present it. PI became quiet the economic activity when the recession hit.

Pat Mustard wrote: »

I have absolutely no difficulty with a transparent system, where overall statistics for assessments, settlements and awards in relation to PI claims are recorded centrally.

However, I'd prefer that the information would be sent elsewhere, other than to a creature of the insurance industry.

Lets do it.

Pat Mustard

TimingChain77 wrote: »

We are agreed that the driving force behind the litigation is professional fees rather than the award to the claimant. I do think that it should be pointed out that what a professional will charge will depend on who is paying. If a claimant pays from the pocket the charge is significantly less than if a settlement is reached whereby the insurance company foots the bill. Legal professionals tend to have an ongoing relationship with other professionals, specific doctors etc, when it comes to the provision of reports and are able to negotiate significant discounts on fees where claimant pays from the pocket. A kind of "I'll keep business coming your way and you can make it back next time the insurance company picks up the tab" type of arrangement.

"We are agreed", eh? No. We are not agreed. The above is your own rant but you are welcome to back it up if you can. In fact, if a lawyer offers negligent advice to a client which results in loss to the client, the lawyer can be sued. Therefore, it is in the lawyer's interest not to offer negligent advice.

TimingChain77 wrote: »

Mmmm ok. You said there was no "penalty" where a respondent rejects assessment and a higher award is subsequently achieved. That is incorrect. The penalty is award of costs against them. Which you seem to consider a "beating stick" when used against the plaintiff. Also significantly a Plaintiff can achieve a lower award than the assessment that was rejected and section 51A would not apply

I am talking about S51A and you seem to be talking about other reasons to decide costs. You seem not to have noticed that you are talking about something else now.

TimingChain77 wrote: »

I'm sorry, was there a point contained in the paragraph which didn't focus on why the litigation route was being used as a means of recovering professional fees?

This was in relation to recovering the plaintiff's costs, many of which would have been incurred at Injuries Board stage but were not recoverable. You are either not paying attention or you are deliberately ignoring the point of the amount in the plaintiff's pocket at the end of the day. I suspect it is the latter because you have some bee in your bonnet about lawyers.

TimingChain77 wrote: »

Its observational, which is all it can be. Unfortunately the professional classes in this country are a law unto themselves. If they say the public can not have access to the information then that is what the law will say. The political class will no doubt concede that for reasons of "commercial sensitivity" the law must restrict the publics eyes.

It isn't observational. If it is was observational, it would be based upon something that you had seen, heard or noticed. On the other hand, you appear to made this up but you are telling us that "it's observational".

TimingChain77 wrote: »

Hard by insurance companies. Haha, you jest old boy! I draw no distinction between the suits of the legal profession and the suits of the insurance industry. Hand in glove they both rely on the existence of an active PI industry to justify and maintain their considerable costs income. I try not to be distracted or confused by their faux dispute over who is to blame for a circumstance so financially beneficial to both.

Clear to see that you don't have a clue what you are talking about, with that conspiracy theory. Just nonsense.

TimingChain77 wrote: »

Lies, Damned Lies and Statistics. The cost of each case "may" have decreased slightly but not nearly enough to offset the multiple by which claims have increased.

More conspiracy theory stuff.

TimingChain77 wrote: »

The economic activity point used as a defence by D.B in his article is interesting although not as he would present it. PI became quiet the economic activity when the recession hit.

You refer to an article about how the insurance industry is misleading the public about the reasons for increases in insurance premiums. You refer to the point about economic activity. You refer to this as interesting. You do not develop any point other than to observe that it is interesting. What's your point?

TimingChain77 wrote: »

Lets do it.

It has already been proposed by the Working Group on the Cost of Motor Insurance.

TimingChain77

Ok, I think its time we ended the discussion.

I understand that you are a legal professional. You are defending your tribe, the mentality of a football fan. Its personal for you, your ego and sense of self is connected to the esteem you attach to your profession, it is who you are, and I understand your emotional responses. It is possible that you have managed to insulate yourself from the reality of the activities that are taking place on a wide spread scale around you. If that is the case then your contributions can't really carry much weight.

"Conspiracy" is your refuge. However, When PI claims increase 6 fold it stretches it to suggest that it would be a conspiracy to take the position that the overall cost of PI claims has not increased. Nor is it a conspiracy to suggest that individual costs reductions claimed by the legal industry are not sufficient to offset to overall cost increase caused by the multiple increase in PI Claims.

Conspiracy maths for children:

If I buy 10 apples at €1 per apple the cost of apples is €10.
If the cost of apples falls to €0.95 per apple but I now buy 20 apples then the overall spend on apples is €19. The cost of an individual apples has fallen but how much is being spent on apples has increased.


In your version of reality, or at least the version you'd like the general public to believe as I hope for your sake you don't actually believe yourself, the legal profession and the insurance industry are desperately attempting to find a way to reduce costs and premiums. The last thing either party wants is for an active PI industry which is used to justify high premiums and fund professional fee income. It's Tom's fault.....no no, its Jerry's fault.....no no, its Tom's fault,.....no,no it's Jerry's fault. Away with the fairies.

Pat Mustard

Somebody remind me.

What happened to the boy who cried 'wolf'?

nuac

TimingChain77 wrote: »

Ok, I think its time we ended the discussion.

Mod
Rant removed. 2nd Warning. Please behave

big syke

TimingChain77 wrote: »

I can think of two major Insurance firms that got themselves into trouble.

One decided it would diversify into the Hotel business, purchasing hotels at the height of the property boom and just before the collapse in consumer spending. Another ended up investing in shares.

Its important to remember though that insurance premiums went up to cover the costs of insurance payouts. It was the payouts that caused the losses. Its true.

The first you speak of got into trouble mainly because they strayed away from their successful insurance model. They aggressively moved into the non-direct broker market and non core business.

They tried and successfully gained large amounts of market share and premiums with brokers by offering premiums at stupid low amounts, underwriting business they had no knowledge about, underwriting business that no other insurance companies wanted and strayed away from their core business into the commercial sector.

Lost there shirts for several years when claims came in because the
1) premiums they got didn't cover the claims (not even close)
2) there investment strategy did not work.
3) The severity of the claims was not expected because they did not know the business they were underwriting

Sue Pa Key Pa

hullaballoo wrote: »

Moderator: This nonsense stops now. The facts and figures are there and available for all to see (except the figures that indoors refuse to release for some reason.)

Insurance companies are simply ripping people off to cover their own bad business decisions. Cost of claims are not to blame.

So my point that there are many parties, including insurers, who are responsible for the mess that our insurance industry is in and you insist that the others are blameless?

Liam McPoyle

hullaballoo wrote: »

Moderator: This nonsense stops now. The facts and figures are there and available for all to see (except the figures that insurers refuse to release for some reason.)

Insurance companies are simply ripping people off to cover their own bad business decisions. Cost of claims are not to blame.

Absolute nonsense and using your position as a mod to shut down any negative slant on the legal profession is damn petty.

Do you know what an underwriting loss is?

Its what happens when insurers pay out more on claims than they take in via premiums.

Last year there was an underwriting loss made of over €200 million, nearly double the previous year.

https://www.google.ie/amp/s/www.irishtimes.com/business/financial-services/motor-insurers-made-combined-273m-loss-in-ireland-last-year-1.2807401%3Fmode%3Damp

Are the central bank lying?

The VFI have come out bemoaning the increases in premium due to claims.

As have representatives for SME's.

As have representatives for small local sports clubs.

Pat McDonagh, he of Supermacs, gave an interview recently on the Independent about the struggle his business have had with claims. He allowed a video of a recent claim made against them to be shown, it illustrates just how the claims environment is in Ireland.

None of the above are motor based policies yet they are all suffering due to it.

But of course, its all the insurers fault.

You are calling for insurers to disclose everything about what they are paying out, I absolutely agree they should, it should be done to show just much is being paid on legal fees.

The legal system is not regulated like insurers, I'd love to see them being forced to publish they accounts to show how much they are getting.

The fact is very clear, the only thing we have seen is a propaganda piece from someone in the law society, no empirical data, no nothing, just a musing blaming someone else.

But insurers are lying.

The central bank is lying.

Publicans, shop keepers and small business owners are lying.

And the legal system is completely blameless.

Everyone's out of step but our Johnny, eh.

hullaballoo

Posts moved to the appropriate thread for this discussion.

Sue Pa Key Pa

What Rod said

Pat Mustard

Report on the cost of Insurance Working Group.

This backs up what I said; that the cost of claims and legal costs have not caused the insurance hikes.

Pat Mustard

Rod Munch wrote: »

You are calling for insurers to disclose everything about what they are paying out, I absolutely agree they should, it should be done to show just much is being paid on legal fees.

Rather curious that the insurance companies are keeping their information to themselves, then.

Johnboy1951

Now that things have settled down somewhat in this thread I would like to ask about this

the court, in those proceedings, may, in its discretion, order the claimant to pay all or a portion of the costs of the defendant or defendants.

In the event that an award is less than the PIAB amount which was refused, the above applies if I understand correctly.

So to the question:

Are there any details available that show this being applied, and if yes to what percentage of the costs, and if this is used at what 'difference' figure it is invoked?

As written this would appear to be a definite disincentive to refusing the PIAB amount, but is it in practice?
Do the courts actually use this facility?
It is hardly a disincentive if rarely used.

Just curiosity on my part having read this thread.

Really Interested

Johnboy1951 wrote: »

Now that things have settled down somewhat in this thread I would like to ask about this



In the event that an award is less than the PIAB amount which was refused, the above applies if I understand correctly.

So to the question:

Are there any details available that show this being applied, and if yes to what percentage of the costs, and if this is used at what 'difference' figure it is invoked?

As written this would appear to be a definite disincentive to refusing the PIAB amount, but is it in practice?
Do the courts actually use this facility?
It is hardly a disincentive if rarely used.

Just curiosity on my part having read this thread.

It happens in most cases where I have seen a award being less than PIAB and also in cases where the plaintiff does not succeed at all.

hullaballoo

Yes, where the PIAB assessment is not beaten by going to Court, the plaintiff would have to pay the defendant's costs unless there is some compelling reason why the plaintiff had to proceed to Court notwithstanding the adequacy of the PIAB assessment. Thus, accepting the PIAB assessment is obviously incentivised. However, for various reasons, PIAB assessments are often far less than what would be awarded by a Court.

This is part of the reason why the PIAB system, although admirable, does not work. Only an experienced legal professional knows how to gauge whether the PIAB assessment against the range of awards made by the Courts. (Even experienced professionals sometimes get this wrong for various reasons.)

There is no parallel costs penalty for a defendant who wrongly rejects an assessment but that might be considered to be double punishment and defendants are fully entitled to contest any claim they choose.