Money Talks: A Brewing Compensation Culture in Ireland?
“Compensation Culture” was a phrase coined by Bernard Levin in 1993, which is used to describe a society where an affinity for unjustified claims for compensation prevails. In this article, I will examine the two main safeguards implemented by the government to protect Ireland from this “compo culture”, the Personal Injuries Assessment Board followed by the Civil Liability and Courts Act. Additionally, these safeguards are complemented with a recent judicial shift towards personal responsibility.
The Personal Injuries Assessment Board
One of the primary safeguards implemented by the government to combat “compensation culture” was the Personal Injuries Assessment Board Act 2003 (PIAB). In the early 2000s despite the withdrawal of juries, the court continued to award the plaintiff enormous amounts of compensation. This forces the parties of an injury claim to initially engage with the PIAB to see if a settlement can be reached before going to court. The act seeks to introduce a “lawyer free zone” in which both parties are presented with an opportunity to settle claims quickly on a value objectively determined by the courts, all without legal costs.[1] Further, the PIAB has no power to determine liability and hence, will issue an “authorisation” after which the case will advance to court. Approximately 20% cases are resolved quickly and cheaply by the PIAB while the process also provides a low-cost alternative to many other cases, especially those which were settled.[2]
Furthermore, critics argue that there is undeniable vagueness within the language of the act. For example, s.3(d) states that the PIAB is applicable to any civil action other than medical negligence, it is challenging to gauge what is covered. Similarly, in s.3(a) it declares that the PIAB procedures apply for civil actions by employees arising out of the negligence of, or a breach of duty by their employer. Another ambiguity arises as to what constitutes an “employee”. Does this include self-employed contractors?[3] My counterpoint to this is that judges may act as a precision instrument and will have the responsibility to clarify the act on a case by case basis. Moreover, the legislature introduced the PIAB Amendment Act 2019 in April, which amongst other things included a new provision which penalizes claimants who have not provided information or documents. This is notable because it demonstrates the government’s willingness to bolster the act with new provisions to counter “compensation culture” and thus, it compels me to believe that vagueness can be significantly reduced over time.
Moreover, the hastily prepared Book of Quantum potentially raises more questions. The Board’s statutory duty requires awards to be made on the same merits as tort law. The issue is that settlements are unreliable and are affected by matters outside the law and perhaps, are unsuitable for fulfilling the statutory mandate of the PIAB.[4] Further, another issue arises due to the fact that the amounts listed in the book are not rounded off, thus, falsely implying that there is mathematical precision to the public.[5]
Overall, it is quite clear that the PIAB is far from perfect. Despite this, cases in which PIAB awards have been accepted have shown a downward trend in costs and show 6% to be the levelling-off point. Additionally, the PIAB statistics for 2018 reinforce my assumption that it is a successful deterrent to the rise of “compensation culture”. Comparing 2018 to 2017 and 2016, the number of awards has dropped by 551 and 854 respectively, while the total value of claims has dropped by €16.49 million and €16.58 million.[6] The process categorically improves the system and brought vast systemic change to the attitude towards personal injury claims. It can be improved with updated legislation but even if it stays stagnant, the PIAB is an important safeguard which successfully combats “compensation culture” in Ireland.
The Civil Liability and Courts Act 2004
The Minister for Justice, Equality and Law Reform stated that “The Civil Liability and Courts Act 2004 is a major plank in this government’s effort to tackle insurance costs and insurance fraud”, and further that “the Act tackles the compensation culture that has developed in this country”.[7] An advantageous feature of the act is the reduction of the limitation period from 3 to 2 years and it commands the claimant to send a letter of claim to the wrongdoer within 2 months. From my perspective, ensuring that the trial is held within a short time frame is profitable in alleviating legal costs. Similar in a way to the PIAB, the Act allows the court to instruct parties to attend mediation to encourage settlements. I believe that mediation is a fruitful feature because it allows parties to agree on settlements with significantly reduced legal costs compared to going to court, and from the court’s perspective, combats overburdening by reducing the overall number of personal injury actions going to court.[8]
Furthermore, the process of pleadings within the Act is perhaps the most potent safeguard against “compensation culture”. Before the implementation of this Act and the PIAB, there was a perception that exaggerated and fraudulent claims were being claimed by aggressive and morally inept lawyers. To scale down exaggerated and outlandish claims, s.14 of the Act requires both the plaintiff and defendant to provide signed affidavits confirming all allegations and assertions.[9] The penalty for falsely providing evidence is a fine of €100,000 or a prison sentence of up to 10 years.[10] Additionally, s.26 states that the court will dismiss the case if the plaintiff is knowingly presenting fake or misleading evidence.[11] In Carmello v Casey[12] and Ahern v Bus Eireann[13], it was established that the courts can dismiss a case on the balance of probability rather than beyond reasonable doubt. My outlook is that such serious punishments for perjury and the court’s willingness to dismiss cases is a reliable way of expunging fraudulent claims by claimants and their lawyers. From my research, it appears that the Act is an outstanding safeguard against “compensation culture”, one just as effective as the PIAB without the potential disadvantages. Both statutes effectively act in conjunction with each other and hence, I am obliged to conclude that with these statutes, Ireland is relatively safe from the risk of a raging “compensation culture”
Personal Responsibility
In addition to safeguards, judicial approach is vital in quashing the symptoms of compensation culture. Recently, the courts have adopted a new judicial outlook of personal responsibility in personal injury claims especially by Ms. Justice Irvine in the Court of Appeal. For example, in O’Flynn v Cherry Hill Inns Ltd,[14] the Court of Appeal identified a responsibility for adults to possess common sense. Quoting Ms. Justice Irvine, “adult members of society are obligated to take care for their own safety and cannot divest themselves of responsibility for their actions.” In this case Ms. Flynn severed the tip of her finger from an automatic pub door and was awarded €75,000 in damages in the High Court. However, the Court of Appeal deemed that there was a lack of evidence proving that the appellant had failed to take reasonable care in relation to the automatic door, and an appeal was granted. Furthermore, in relation to personal responsibility, Ms. Justice Irvine claimed that the risk of injury from opening doors has been established since infancy and that automatic doors are encountered as a part of everyday life. Finally, she clarified that when an adult is not paying sufficient attention and sustains an injury as a result, they must “absorb the consequences of our conduct.”
Another judgment embracing personal responsibility is the decision of Byrne v Ardenheath[15] in the Court of Appeal. In this case, the plaintiff fell on a grassy bank in a car park and broke her ankle. Similarly, Ms. Justice Irvine deemed that the appellant complied with its duty to take reasonable care. She stated that “an adult exercising reasonable care would avoid the wet grassy slope,” and noted that the plaintiff was wearing shoes with little grip and that another entrance to leave the car park was also nearby.
Likewise, personal responsibility has also been employed in the High Court. In O’Donnell v South Tipperary County Council,[16] the plaintiff sustained injuries from falling off his bicycle due to a negligent repair of a hole in the road. Mr. Justice Twomey dismissed the case due to the fact that “it would be impossible for anyone cycling down the road to see a hole of this size.” He reiterated the importance of the concept in The Child and Family Agency v A.A.[17] This case was about the entitlement to disclose one’s HIV condition to a partner. Mr. Justice Twomey suspected that B should have been aware of the danger that if she had unprotected sex, she risked contracting STIs including HIV. While this action would have been possible under the Civil Liability and Courts Act 2004, it was decided that she was not an “innocent third party.” Thus, by following the decision of O’Flynn v Cherry Hill Inns,[18] the Court of Appeal decided that someone who was almost an adult must take responsibility for their own safety and must be held accountable for their actions.[19] All of the cases above are relevant examples of how the courts are emphasising a more reserved approach to personal injury claims by implementing personal responsibility. I believe that by removing frivolous and outlandish claims, this methodology is undeniably beneficial in halting the creation of a society, in which individuals pursue compensation for every minor injury.
Conclusion
Firstly, in relation to PIAB, despite the issues with vagueness and the book of quantum, analysis of the 2018 statistics compels me to believe that the pros significantly outweigh the cons. The process provided a lawyer free zone which encouraged fair settlements to resolve a variety of personal injury cases in a swift and cheap manner. Moreover, the Civil Liability and Courts Act is arguably an even more effective safeguard. It reduced the limitation period, elaborated on mediation and required signed affidavits by claimants, thus preventing time wasting, improving settlements and eliminating perjury from fraudulent claimants respectively. These statutory safeguards are currently being reinforced by an updated judicial approach towards personal injury claims. Personal responsibility has introduced an idea of “common sense” which is a fantastic countermeasure to stop claimants from, as Ronald Walker describes, blaming “all misfortunes short of an Act of God,”[20] on somebody else for an injury. Ultimately, I conclude that tort law in Ireland has enough safeguards to hinder the development of a “compensation culture”.
[1] Bryan McMahon and William Binchy, The Law of Torts (3rd edn, Bloomsbury Professional 2003) 62 [1.157].
[2] Eoin Quill, ‘The functioning of the Personal Injuries Assessment Board in Ireland’ (2019) Journal of Personal Injury Law 74.
[3] Bryan McMahon and William Binchy, The Law of Torts (3rd edn, Bloomsbury Professional 2003) 63 [1.161].
[4] Eoin Quill, ‘The functioning of the Personal Injuries Assessment Board in Ireland’ (2019) Journal of Personal Injury Law 74.
[5] ibid.
[6] PIAB ‘Statistics: Application Volumes and Values’, <https://www.piab.ie/eng/about-piab/statistics/ > accessed 10 November 2019.
[7] Bryan McMahon and William Binchy, The Law of Torts (3rd edn, Bloomsbury Professional 2003) 71 [1.179].
[8] Ben Colon, ‘Compensation Culture in Ireland’ (Trinity College Law Review Online) <https://trinitycollegelawreview.org/compensation-culture-in-ireland/#_ftnref14 > accessed 6 November 2019.
[9] Bryan McMahon and William Binchy, The Law of Torts (3rd edn, Bloomsbury Professional 2003) 74 [1.184].
[10] Bryan McMahon and William Binchy, The Law of Torts (3rd edn, Bloomsbury Professional 2003) 74 [1.184].
[11] Bryan McMahon and William Binchy, The Law of Torts (3rd edn, Bloomsbury Professional 2003) 77 [1.189].
[12] Carmello v Casey [2007] IEHC 362.
[13] Ahern v Bus Eireann [2011] IESC 44.
[14] Flynn v Cherry Hill Inns Ltd [2017] IECA 211.
[15] Byrne v Ardenheath Company Ltd [2017] IECA 293.
[16] O’Donnell v South Tipperary County Council [2017] IEHC 705
[17] The Child and Family Agency v A.A [2018] IEHC 112
[18] ibid. at n14.
[19] Aisling Mulligan, Fiona Wood, ‘Keeping schtum’ (Law Society Gazette Ireland 16 July 2019) <https://www.lawsociety.ie/gazette/legal-analysis/keeping-schtum/ > accessed 12 November 2019
[20] Ronald Walker, Sarah Veale, ‘Compensation culture: myth or reality?’ (The Times Law Supplement. London. p. 8. 7 October 2003).