Personal Injuries – The MIBI

The MIBI – Questions & Answers

  • What is the MIBI?
  • This is an acronym for the Motor Insurers Bureau of Ireland.
  • What does it do?
  • The State is obliged by the European Union Motor Insurance Directive 2009/103 to have a system for compensating the victims of uninsured motorists who have sustained personal injuries. This directive is implemented in Ireland by legislation and by an agreement between the Minister for Transport and the MIBI (“the MIBI Agreement”).
  • How is the MIBI structured?
  • It is a not-for-profit private company limited by guarantee.  All insurance companies authorised to issue motor insurance policies in Ireland must be members of the MIBI. All these companies are bound to contribute to a fund required to discharge MIBI claims each year.
  • What is the precise obligation of the MIBI?
  • The obligation of the MIBI in the case of an identified driver is to pay a judgement obtained against that driver when uninsured which judgement remains unsatisfied within 28 days. In other words, the case proceeds against the identified but uninsured driver and a judgement against the driver must be paid by the MIBI. Where the driver is untraced, the MIBI will be the defendant in your case.
  • How do I make a claim if I sustain personal injuries due to the negligence of an uninsured driver?
  • The MIBI Agreement deals with this by allowing the injured party to apply to the MIBI for compensation.  First of all, the personally injured party must apply to the Personal Injuries Assessment Board (“PIAB”).  Where the MIBI offers compensation that is unacceptable to the plaintiff then PIAB will issue an “authorisation” allowing you to proceed with the claim through the Courts.
  • What happens if I sustain personal injuries through the negligence of a driver who had insurance but whose insurer is insolvent?
  • The Irish Court of Appeal has held that the MIBI Agreement was intended to cover such a situation and in such circumstances therefore the MIBI would be obliged to pay the compensation awarded to you against the driver.
  • What happens where the driver of the vehicle who caused my personal injuries is untraced?
  • This is also covered by the MIBI Agreement but strict time limits do apply to the obligation to issue proceedings. Thus it is very important to obtain skilled legal advice as early as possible subsequent to your accident.
  • What happens if my personal injuries were caused by an uninsured driver – not by the negligent driving of the car – but as a result of the vehicle being used as a weapon?
  • In a very recent case of Mongan -v- Mongan and the MIBI which was decided earlier this year, i.e. 2020, the High Court decided that the MIBI was liable for injuries caused in such circumstances as a result of an assault and battery where the vehicle was used as a weapon against the plaintiff who sustained serious personal injuries. The High Court made it clear that people should be and will be protected should they find themselves personally injured and victim of assault and battery where a motor vehicle is used as a weapon.
  • What happens if there is uncertainty as to liability between two uninsured defendants?
  • This is a very good question and can often give rise to difficult legal problems. The short answer to your question is to seek legal advice at a very early stage from an experienced personal injuries solicitor who will guide you through the numerous pitfalls and legal complexities associated with such a set of circumstances.
Whilst every effort has been made to ensure the accuracy of the information contained in this article, it has been provided for information purposes only and is not intended to constitute legal advice. Amorys Solicitors is a boutique commercial and private client law firm in Sandyford, Dublin 18, Ireland.
For further information and advice in relation to “Personal Injuries – The MIBI”, please contact Daragh Burke, partner, Amorys Solicitors, telephone 01 213 5940 or your usual contact at Amorys.

Farming Accidents In Ireland

Farming Accidents In Ireland

There are approximately 137,000 farms in Ireland with an average of 173,000 people employed in the agri-food sector. According to a 2018 Teagasc survey the average size of Irish farms is 43 hectares and employment in the sector accounts for 7.7% of total employment in the country. Farms are inherently busy and dangerous workplaces with the level of fatal accidents being far greater than in any other economic sector given the relatively small proportion of the farming workforce.

How do accidents occur on farms

The level of accidents on farms has been rising. In the ten years up to 2018 there was a 31% increase in farming accidents.  The Teagasc survey indicated that the majority of accidents occur on dairy farms, 42% of accidents involved livestock and 25% involved farm machinery and vehicles. Most fatal injuries on farms involving livestock are caused by cows and heifers followed by incidents involving bulls. Rolling vehicles are also a major cause of farming accidents with many fatal injuries resulting from being crushed, struck, pinned under or falling from a tractor or other type of farming vehicle. Trips and falls accounted for 13% of accidents with chainsaws and incidents in farm buildings accounting for 7% and 6% of farm accidents respectively. Falling objects and falls from a height are also the cause of many farm related accidents. The farmyard is the highest risk area where on average 64% of accidents occur,  19% of accidents occur in fields and 15% in farm buildings. The vast majority of accidents on a farm happen to the farmer or a family member with young children and elderly farmers being particularly at risk due to accidents on the farm.

The Law and Farms as places of work

The Health and Safety Authority (HAS) have published many useful guidelines and codes of practice on how to identify and mitigate the risk of injury in a farming environment. The vital message on farm safety is to ensure that everyone working on a farm is adequately trained, that vehicles and machinery are properly maintained and that safe work practices are put in place and properly enforced across the farm.

Legal duties of a farmer

There are a number of pieces of legislation that aim to protect the health and safety of those who work on farms. The Safety, Health and Welfare at Work Act 2005 is the main piece of legislation that sets down the duties and obligations of farmers as employers.

Farmers have a general duty of care to their employees and are obliged to amongst other things:-

  • provide a safe place of work on the farm
  • ensure that safe work systems and procedures are in place
  • provide adequate training for workers
  • ensure that plant equipment and machinery is safe for use on the farm and properly maintained
  • provide personal protective equipment and clothing where necessary
  • provide adequate bathroom and washing facilities

Legal duties of farm employees

Farm employees also have a duty under the Act to amongst other things:-

  • co-operate with the employer so they can comply with the relevant legislation
  • use any personal protective clothing or equipment provided by their employer
  • not engage in any behaviour that would endanger their safety or the safety of anyone else working on the farm
  • attend training and undergo assessment where required

HSA powers

The HSA has the power under the 2005 Act to enter a farm as a place of work at ‘any reasonable time’  to ‘inquire into, search, examine and inspect’ that place of work. The powers of the HSA inspectors are extensive and they can serve an improvement notice on the farmer and also serve a Prohibition Notice requiring the immediate cessation of work where there is a breach of the Act which poses an imminent threat to health and safety. The HSA can also prosecute a farmer for non-compliance with the legislation. It is an offence under the Act to in any way obstruct an inspector in the course of their duties.

Farm Safety statements

Farmers are required as a matter of law to have a safety statement in writing that is made available to all farm employees and is also visible to everyone working on the farm. Farmers are required to identify the hazards present on the farm, assess the risk of injury associated with these hazards and identify and write out a plan to eliminate or control the hazards. The safety statement should be regularly updated as and when new machinery, vehicles or work practices are introduced. Farms with 3 employees or less are not required to prepare a safety statement however they are obliged to comply with the terms of the Agricultural Code of Practice.

Farmers need to be aware of their legal duty of care towards their employees. Legislation has evolved over time to give more protection to farm workers and they now have the same legal status as employees in any other sector of the economy. It is the responsibility of both farmers as employers and all those who work on farms to make themselves aware of the risks involved in any farm work they undertake and to do everything possible to reduce the number of accidents and potential personal injury claims on farms.

Whilst every effort has been made to ensure the accuracy of the information contained in this article, it has been provided for information purposes only and is not intended to constitute legal advice. Amorys Solicitors is a boutique commercial and private client law firm in Sandyford, Dublin 18, Ireland.
For further information and advice in relation to “Farming Accidents In Ireland”, please contact Daragh Burke, Amorys Solicitors, telephone 01 213 5940 or your usual contact at Amorys.

Periodic Payment Orders in Catastrophic Injury Cases

The first Periodic Payment Order (PPO) was approved by an Irish Court in February 2019. The 13-year-old plaintiff suffered brain damage at birth and will receive an annual payment of €610,000 for the remainder of her life. The plaintiff’s case against the Rotunda Hospital was settled in 2012 without an admission of liability on behalf of the hospital. Interim settlement payments of €2.94 million had already been made to the plaintiff. The commencement of the Civil Liability (Amendment) Act 2017 by the Minister for Justice and Equality in October 2018, allowed the court to approve the PPO which Mr Justice Peter Kelly described as being in the best interests of the plaintiff.

Lump-Sum Payments:

Prior to the commencement of the 2017 Act, the courts were only able to award lump-sum payments in catastrophic injury cases with interim payments schemes also being utilised in recent years in cases where the parties were waiting for the legislation to be enacted. However, lump-sum payments were not always fit for purpose and could leave a plaintiff in a precarious position should they outlive the life expectancy used to calculate the amount of future care that they may require. From a defendant’s perspective, it was also possible that a lump sum payment could “overcompensate” a plaintiff.

The 2017 Act:

The 2017 Act defines catastrophic injury as a personal injury of such severity that it results in a permanent disability requiring the person to receive life-long care and assistance in daily living or a substantial part thereof. Where a court awards damages for personal injuries to a plaintiff who has suffered a catastrophic injury, the court may order that the whole or part of the damages be paid by the defendant in the form of a PPO in such amounts as the court may determine.

An award of damages by PPO can be made under the Act where the damages relate to;

  • the future medical treatment of the plaintiff
  • the future care of the plaintiff
  • the provision of assistive technology or other aids and appliances associated with the medical treatment and care of the plaintiff
  • future loss of earnings where both parties consent in writing

The court has the discretion to decide whether to award a PPO whether both parties consent or not and will consider whether it is in the best interest of the plaintiff and the particular circumstances of the case. Under subsection (2) of section 51I of the Act, the court shall take into consideration inter alia the form of award preferred by the plaintiff and the defendant and the reasons for same and any financial advice received by the plaintiff. Under subsection (3) of section 51I, where both parties agree to the payment of all or part of the damages by PPO, the court has discretion to either make a PPO in accordance with the agreed terms, refuse the application or refuse the application and make a PPO under subsection (1) of section 51I of the Act.

A Periodic Payment Order will specify the annual amount awarded to the plaintiff, the frequency and method of the payments and the amount of damages awarded in respect of the future medical treatment, future care and provision of assistive technology/aids & appliances associated with the medical treatment and care of the plaintiff and the amount awarded for loss of earnings if applicable.

Any award made by way of PPO is exempt from tax under section 189B of the Taxes Consolidation (TCA) 1997.

Stepped Payments:

The 2017 Act also provides for “stepped payments” where it is anticipated that there will be changes in the plaintiff’s circumstances during their lifetime that are likely to have an effect on their needs. In such circumstances, the court can make provision in the Periodic Payment Order that from a specified date a payment can be either increased or decreased by a specified amount.   The changes in circumstances could include the plaintiff starting primary or secondary school, reaching the age of 18, entering third-level education or predictable changes in care needs such as moving into residential care.

Security of Payments:

A court must be satisfied that the continuity of payment is “reasonably secure”.

The court shall have regard to whether;

  • the defendant is a state authority and the payments are protected under a scheme of indemnity administered by the State
  • the Periodic Payment Order is eligible for payment from the Insurance Compensation Fund (established under s2 of the Insurance Act 1964) or the MIBI (Motor Insurers’ Bureau of Ireland) or
  • the continuity of payment can be guaranteed by some other means.


The annual amount awarded to a plaintiff under a PPO in Ireland will be adjusted annually in line with the Harmonised Index of Consumer Prices (HICP) which is subject to ministerial review every five years. The Minister has the power under the Act to change the index used if following review a different index would be deemed to be more appropriate for indexation purposes.

Indexation is, however, one of the main concerns of plaintiffs, their families and advisors regarding the PPO legislation as the HICP does not measure increases in the cost of medical appliances or the salaries of care workers which will make up a significant proportion of a PPO. PPOs in the UK use the ASHE 6115 Index which is an annual earnings survey applicable to home carers and care assistants however there is no equivalent index in Ireland.  Another difference between the Irish and UK PPO system is that there is no power given to the Irish courts to make a variation order meaning that a plaintiff is unable, under the current legislation, to return to the court following a deterioration in their condition.

Justice Deirdre Murphy addressed at length the difficulties indexation using the HICP presented for plaintiffs in a recent High Court judgment (JH v HSE) where a minor had suffered a catastrophic injury at birth in Cork University Maternity Hospital. She concluded that there was overwhelming evidence that a PPO linked to the HCIP would lead to under-compensation for plaintiffs.  One expert witness estimated that as a matter of probability that after 10 years the PPO would only meet 86% of the plaintiff’s care needs leading to a shortfall of 14%, after 20 years the shortfall would be 26% and at age 50 only 48% of the plaintiff’s care costs would be covered by the PPO.  Justice Murphy found that “in circumstances where the expert evidence is unanimous that the indexation chosen (HICP) will not meet the future care needs of catastrophically injured plaintiffs, then no judge, charged with protecting the best interests of a plaintiff […] could approve a periodic payment order adjusted by reference to the HICP”. Furthermore, she held that “It is clear […] that no competent financial expert would recommend a periodic payment order linked to the harmonised index of consumer prices to provide for the future care needs of a plaintiff. In its current form, therefore, the legislation is regrettably a dead letter. It is not in the best interests of a catastrophically injured plaintiff to apply for a Periodic Payment Order under the current legislative scheme.

The purpose of the Periodic Payment Order legislation was to ensure that the future care needs of catastrophically injured plaintiffs are funded for the rest of their lives and to remove the uncertainty regarding future care costs associated with lump-sum payments. The courts in the UK have discretion, under the Damages Act 1996, to devise an indexation measure by which the PPO would increase in a manner capable of ensuring that the plaintiff’s future care needs are met. However the Irish courts can only use the HICP index which does not account for increases in the cost of medical appliances or care workers costs. As a result plaintiffs risk being seriously under-compensated for their future care needs.

Justice Murphy’s decision has shed light on the practical difficulties of using the HICP index instead of a wage-based index such as in the UK when the courts are seeking to ensure that a plaintiff will be fully compensated for their future care needs. Unless the Minister uses the power under the Act to change the index to one which makes the legislation fit for purpose to adequately compensate catastrophically injured plaintiffs for their future care costs, the 2017 Act unfortunately risks being redundant.

Whilst every effort has been made to ensure the accuracy of the information contained in this article, it has been provided for information purposes only and is not intended to constitute legal advice. Amorys Solicitors is a boutique commercial and private client law firm in Sandyford, Dublin 18, Ireland.
For further information and advice in relation to “Periodic Payment Orders in Catastrophic Injury Cases”, please contact Daragh Burke, partner, Amorys Solicitors, telephone 01 213 5940 or your usual contact at Amorys.

On your bike – Cycling and the Law in Ireland

New legislation has been enacted to protect cyclists from dangerous overtaking by drivers on the road. The Road Traffic (Traffic and Parking) (Amendment) Regulations 2019 came into force on the 12th of November 2019 and introduces a fixed €120 charge and three penalty points for any driver successfully prosecuted under the legislation. Between 2011 and 2016 a total of 69 cyclists were killed on Irish roads and 4,404 cyclist casualties were reported. Cyclists are extremely vulnerable road users and with the growing popularity of cycling, there are calls to greatly improve the protection of the cyclist on our roads.

Minimum Overtaking Distance:

Safe cycling advocates had been campaigning for the introduction of a minimum passing distance for drivers overtaking a cyclist of 1m for roads with a 50km speed limit and 1.5m for roads with a speed limit higher than 50km. There are a number of countries that have already introduced mandatory passing distances for drivers. Belgium has a mandatory passing distance of 1m. France has a mandatory passing distance of 1m on roads with speed limits of less than 50kmph and 1.5m where the speed limit is more than 50kmph. There are also multiple States in the US that have varying mandatory passing distances e.g. the 3ft law in Baltimore. A number of other countries have an advisory passing distance such as Austria, Chile and New Zealand. Interestingly the Netherlands, where there is a particularly high number of cyclists, has neither an advisory nor a mandatory passing distance as their roads infrastructure deliberately separates cyclists from motorised traffic where possible. They also use ‘cycle streets’ and ‘cycle areas’ where cyclists’ rights are prioritised over those of motorised traffic.

However, the proposal for the introduction of a mandatory passing distance in Ireland was rejected by the Attorney General reportedly due to concerns regarding the enforceability of the legislation and difficulty in measuring the distance for the purpose of prosecuting drivers. A number of recommendations were made by the RSA in their report Examining the International Research Evidence in relation to Minimum Passing Distances for Cyclists (2018), such as increased education and awareness of the advisory passing distances, increased Garda enforcement of existing legislation on unsafe overtaking and infrastructural solutions to segregate cyclists from motorised traffic. The RSA study found ‘limited empirical evidence’ to support the implementation of mandatory passing distances in Ireland.

How Do Cyclists Get Hurt:

The RSA report examined the profile of cyclist injuries and collisions between 2011 and 2015 and found that:

  • 77% of vehicles involved in collisions with cyclists were private cars, 6.2% were taxis and 11% were goods vehicles of which 8.3% were vans.
  • 51% of collisions with cyclists happened at a T junction, 23% at a crossroads and 20% at a roundabout.
  • 85% of collisions occurred in an urban area with 15% in a rural area.
  • More collisions happened in the brighter months between April to November (8.3% – 11%) than in the months between December and March (6.8% – 5.2%).
  • Tuesdays and Wednesdays had the highest percentage of collisions (17%) compared to lower levels at the weekend (Saturday 9.5%, Sunday 10.8%).

Between 2014 and 2015:

  • 41% of vehicles were driving forward when a collision occurred with a cyclist, 17% were turning right, 13% were turning left and 2.1% were overtaking.
  • 86% of cyclists were moving forward when a collision occurred and 4.5% were turning right.

Of course, the statistics are only based on the collisions that were reported to the authorities.  Many collisions between cyclists and motorists go unreported unless there is a significant injury to the cyclist involved. However, the increased use of cycling helmet cameras and dash cams has been effective in the prosecution of driving that endangers cyclists as video evidence can be produced in court.

Cycling and the Law:

As a cyclist you are entitled to share the road with other road users.  The payment of motor tax does not confer ‘ownership’ of the road to motorists.  Cyclists, like all other road users, must obey the Rules of the Road.  Cyclists are obliged by law to:

  • keep brakes, lights, tyres etc. in good working order
  • there must be front and rear brakes and an audible bell on the bike
  • at night a white/yellow light must be shown at the front of the bike, a red light at the back of the bike (see the Road Traffic (Lighting of Vehicles) Regulations 1963 as amended)
  • stop at traffic lights, stop signs, yield right of way at yield signs and obey the rules in relation to pedestrian crossings, zebra crossings and pelican crossings

There is no legal obligation to wear a helmet or reflective clothing while cycling however it is obviously common sense to do so. A cycling helmet should always be replaced if it damaged. Cyclists can cycle two abreast when it is safe to do so however you must not cycle in a manner that is likely to create an obstruction for other road users.

Cyclists are not legally obliged to use cycle lanes unless the cycle lane is a contra-flow cycle lane that allows cyclists to go in the opposite direction to the traffic on a one-way street (Road Traffic (Traffic and Parking) Regulations 1997 (as amended by the 2018 Regulations).

The Gardaí have the power since 2015 to stop and fine cyclists for certain fixed charge cycling offences such as failing to stop at red traffic lights, cycling in a pedestrianised street, having no front or rear lights during ‘light-up’ hours or cycling a bike without reasonable consideration. The fine is €40.

It remains to be seen if the new regulations regarding the dangerous overtaking of cyclists will be effective and much will depend on the willingness of the Gardaí to enforce the regulations and prosecute those drivers who put cyclists’ lives at risk. Collisions as a result of dangerous overtaking manoeuvres are a ‘sub-set’ of motorist-cycling collisions in Ireland and internationally as highlighted in the RSA report. More collisions occurred when vehicles were driving forward (41%) as opposed to overtaking (2.1%) between 2014 and 2015.

Cycling reduces congestion on our roads and is an environmentally friendly, efficient and healthy way of commuting. Between 2011 and 2016 the national Census recorded a 34% increase in cycling as a means of getting to and from school, college and work. The success of the Dublin Bike Scheme is a testament to the popularity of the bicycle as an alternative transport solution in a city congested with traffic. The introduction of legislation that aims to specifically protect cyclists is absolutely necessary however as long as cyclists are sharing the road with motorised traffic they will remain vulnerable road users. The reality is that cyclist safety would be much improved if the infrastructure of Irish roads separated cyclists from motorised traffic as in the Netherlands.

Whilst every effort has been made to ensure the accuracy of the information contained in this article, it has been provided for information purposes only and is not intended to constitute legal advice. Amorys Solicitors is a boutique commercial and private client law firm in Sandyford, Dublin 18, Ireland.
For further information and advice in relation to “On your bike – Cycling and the Law in Ireland”, please contact Daragh Burke, partner, Amorys Solicitors, telephone 01 213 5940 or your usual contact at Amorys.

Whiplash Claims In Ireland – A Real Pain In The Neck?

Whiplash claims in Ireland seem to receive more than their fair share of publicity these days. It is often claimed that damages awarded for whiplash injuries in Ireland are disproportionately high compared to other jurisdictions and it has been widely reported in the media that awards for whiplash injuries are four times higher in Ireland than in the UK. Whiplash claims are notoriously difficult to dispute as the injury is “unseen” and there is often scepticism on behalf of insurers as to the true extent and severity of the injury. Insurance companies are quick to point to the cost of false and exaggerated personal injury claims as one of the reasons behind the high cost of insurance premiums in Ireland. However, in an era where Insurance company profits are soaring are payouts for whiplash injuries really such a large part of the problem?


Whiplash is defined in the Personal Injuries Assessment Board (PIAB) Book of Quantum as an over extension or sprain of the neck, often suffered in a motor vehicle accident or high impact slip/trip/fall type of accident. The symptoms of whiplash include pain, stiffness, loss of movement and sometimes headaches, muscle spasms and pain in the arms and shoulders. Recovery can take from a few weeks to many months or years depending on the severity of the injury. The most severe cases of whiplash can cause long term pain and permanent disability.

The PIAB Book of Quantum (updated July 2017) divides whiplash injuries into 5 levels of severity with corresponding guidelines on the potential range of compensation :-

  1. Minor – substantially recovered – up to €15,700
  2. Minor – full recovery expected – up to €19,400
  3. Moderate – €20,400 to €30,200
  4. Moderately severe – €34,300 to €52,200
  5. Severe & permanent – €44,600 to €77,900

In the UK, the Judicial College Guidelines for the Assessment of General Damages in Personal Injury is used as a guide for the assessment of general damages in personal injury cases. For minor neck injuries where a full recovery takes place within one to two years, the 14th and most recent edition of the Judicial College Guidelines recommends damages of between £3,470 (€3,979.62) and £6,290 (€7,213.78) which is lower than the PIAB guideline. For severe neck injuries however, the upper limit guideline for damages is £118,240 (€135,664) which is significantly higher than the PIAB guideline in Ireland.

The PIAB Book of Quantum is of course a guideline only and in reality when complex personal injury cases are brought to court, each case is assessed on its own merits and awards of damages are carefully calculated to try to compensate a plaintiff for the injury suffered and any losses and expenses incurred as a result.


The Personal Injuries Commission (PIC) was established in 2017 following a recommendation from the Cost of Motor Insurance Working Group Report published in 2017. The remit of the PIC was to further investigate issues raised in the report such as the prevalence of soft tissue injuries in personal injury claims in Ireland.

It is important to note that the statistics for personal injury payouts in Ireland include whiplash and any other injuries sustained by claimants so it is not possible to look at the damages awarded for whiplash in isolation. This was recognised by the Personal Injuries Commission’s second report in 2018 (PIC2). In the comparison of actual payouts for a whiplash injury with the UK, in Ireland “Where a claimant has multiple injuries, the data includes the payment made for all injuries rather than just the soft-tissue injury element. This may result in average costs of soft-tissue injury being overstated”. As this comprehensive article by Economist Martin Kenneally highlights, the methodology used by the PIC2 in comparing the Irish system with the UK overstates the real cost of payouts for whiplash injuries in Ireland by approximately 100%. As a result, awards for whiplash in Ireland are not 4.4 times greater than awards in the UK but are more likely to be 2.2 times greater. It was also noted in the report that, in general, Irish personal injuries awards compared to personal injury awards in the UK were approximately 1.5 times higher and this was due to the higher severity of injury occurring in Irish road accidents compared with the UK even though there were fewer reported road casualties in Ireland than in the UK.


Irish insurance companies estimate that 20% of personal injury claims made are fraudulent or exaggerated and they claim that this is part of the reason why insurance premiums are so high in Ireland. Insurance companies have dedicated fraud teams that specifically target any claims that they believe have the potential to be fraudulent or exaggerated. They also are obliged to report suspected fraudulent or exaggerated claims to An Garda Siochana for further investigation and criminal prosecution where warranted. With such a high number of suspected fraudulent claims one would expect an equally high level of reporting of suspected claims to the Gardaí. However, during the Oireachtas Finance Committee meeting on the 4th July 2019, where insurance industry representatives were questioned in relation to their 20% fraud/exaggeration estimate, it was noted that only fifty cases of suspected fraud were reported to the Gardaí in the preceding eight months. Furthermore, the reported fraud cases related to all areas of insurance not just personal injury claims. The large discrepancy between what the insurance companies claim to be fraud or exaggeration and what they actually report to the Gardaí is presumably because there is simply not enough evidence to prove the suspected fraud or exaggeration.

The reason for the high cost of insurance in Ireland is not therefore as simple as placing the blame on the cost of whiplash payouts or fraudulent or exaggerated personal injury claims. The PIC2 made a number of recommendations regarding the personal injury claims ‘environment’ in Ireland and these include:-

  • Guidelines for appropriate levels of general damages should be compiled by the Judicial Council, once it is established, and reviewed at regular intervals with a view to replacing the PIAB Book of Quantum. The aim of the Guidelines would be to bring more consistency in the assessment of general damages by the courts in Ireland.
  • In cases where an insurance company deals directly with a claimant, no offer of settlement should be made in the absence of a medical report detailing the nature, extent and prognosis of the injury.
  • Claimants should give prompt notification of any potential claim to allow for a proper investigation of the accident circumstances.
  • The establishment of a Garda Fraud Investigation Bureau without further delay.
  • Insurance companies should increase their anti-fraud capacity and where possible report suspected fraud to An Garda Siochana for investigation in a timely manner.
  • Insurers and other relevant parties should adopt an internationally recognised injury coding system to deal with the lack of consistent and detailed industry-wide coding of injury data.
  • The insurance industry should establish a national medical research study on the prevention and management of soft tissue whiplash injuries to facilitate evidence-based improvements in approaches to treatment, informing policy and delivering benefits to consumers, businesses and wider society.

Indeed, further efforts to improve road safety and to reduce the severity of road traffic accidents in Ireland, together with more standardised diagnosis and treatment of whiplash injuries, may do a lot more to reduce the level of soft tissue whiplash claims in the first place rather than simply reducing or capping the compensation payouts for these injuries when they are genuinely claimed.

Whilst every effort has been made to ensure the accuracy of the information contained in this article, it has been provided for information purposes only and is not intended to constitute legal advice. Amorys Solicitors is a boutique commercial and private client law firm in Sandyford, Dublin 18, Ireland.
For further information and advice in relation to “WHIPLASH CLAIMS IN IRELAND”, please contact Daragh Burke, partner, Amorys Solicitors, telephone 01 213 5940 or your usual contact at Amorys.

Calculating Loss of Earnings in Personal Injury Claims – Part 1

Suffering a serious injury can often lead to a substantial period of time away from work and a significant loss of income. Should this be the case any loss could be recovered as part of a successful personal injury compensation claim.

A claim for loss of earnings forms part of a claim for special damages which is a term for the ‘out of pocket’ expenses incurred or arising as a direct result of an accident.  In addition to special damages, a personal injury claim will consist of a demand for ‘general damages’ which is the label given to the monetary value of pain, suffering and loss of quality of life arising from the injuries.

A claim for loss of earnings is broken down into two parts: past loss of earnings; and future loss of earnings.

Below is a brief outline of how past loss of earnings are calculated in personal injury cases in Ireland.  Our next article will describe how future loss of earnings are assessed.

Basis of Compensation – Net After Tax Income

Firstly, it is important to note that compensation for injuries suffered in litigation, including that part relating to loss of earnings, is treated as capital (ie not income) and is exempt from capital gains tax in the hands of the claimant pursuant to section 613 of the Taxes Consolidation Act 1997.  In keeping with the rule that a plaintiff is only entitled to be compensated for actual loss suffered, Courts in Ireland award loss of earnings on a net after tax and social charge (or Universal Social Charge) basis.  This can result in confusion for some plaintiffs, particularly those who are self-employed, because detailed taxation advice may be required to assess tax on past ‘lost’ income even though no tax is payable on the award at all.

If the plaintiff is resident in another jurisdiction whereby tax on that part of an award relating to loss of income is taxable there, s/he may be compensated based on gross income before tax however this would be extremely unusual and expert evidence from that jurisdiction to show that tax would arise on the award would be required.

Past Loss of Earnings – Where a claimant is Employed

When a claimant is employed, a claim for loss of earnings covers not only basic wages but also any loss of overtime, bonus or shift allowance. Usually, a court will first assess a claimant’s net average yearly income for at least 6 months prior to the accident in order to calculate the average salary.  In a straight forward claim the average monthly wage is multiplied by the period of absence (measured in months) and the resulting figure is deemed to be the value of a past loss of earnings claim.

In circumstances where using the above formula represents under-compensation – due to the availability of large amounts of overtime during a period of absence or an unusually high volume of sales, for example – comparative earnings of suitable work colleagues during the period of absence could be used in place of a claimant’s average earnings for a period prior to the accident. However persuasive evidence would need to be presented to the defendant and the Court, should it be necessary, that it is necessary to depart from the usual rule in a particular case.

Past Loss of Earnings – Where a claimant is Self-Employed

Calculating loss of earnings is slightly more complicated for someone who is self-employed.  Unlike most employees, self-employed individuals have no guaranteed income and the amount earned generally fluctuates from year to year.  Courts in Ireland are extremely reluctant to depart from what is represented in historic accounts and records and this can present difficulties, particularly for self-employed individuals involved in a specialised business with little to no available comparator information, who would have experienced a surge in growth had they been able to work during the period of absence.

As a general rule, a self-employed claimant’s past loss of income for any particular year will be calculated by deducting income received in one year (or part thereof) of absence from an average of the annual income that person or business made over a period of between three and five years prior to the accident.

If the assessment of loss of income on the foregoing basis would result in an artificially low (or high from the defendant’s point of view) value for past loss of earnings, persuasive evidence would need to be produced to the Court to use an alternative method.

If the assessment of loss of earnings on any basis is impossible for any case (beit an expert or indeed a judge) a line of case law exists which would permit a Court to award a ‘top-up’ of ‘general damages’ having regard to the fairness of the particular case.  However, in such a situation expert evidence as to what should/ could be the modified formula for assessing loss of earnings would still be required.

How to claim for Loss of Earnings

If you wish to claim loss of earnings in a personal injury action, make sure your Injuries Board application makes this clear by ticking the relevant box on Form A. Ensure also that you also furnish enough documentation to support your claim, including your past payslips (if employed) and prior year tax returns (where self-employed).

If an Authorisation has issued from the Injuries Board in respect of your claim which must now be processed through the Courts, again make sure to include a claim for loss of earnings in your Personal Injury Civil Bill or Summons.

Failing to include such a claim for loss of earnings in a Personal Injury Civil Bill or Summons could mean that aspect of your claim is denied. A solicitor could assist you with preparing your application to the Injuries Board and drafting court documents, if necessary, to ensure your claim for loss of earnings is adequately identified at the very outset.

Amorys Solicitors has a wealth of experience in recovering loss of income in serious injury compensation claims and liaising with forensic accountants and tax professionals where appropriate.

To begin a personal injury compensation claim or obtain further advice with no obligation please contact Deirdre Farrell, partner, Amorys Solicitors, telephone 01 213 5940 or your usual contact at Amorys.

Whilst every effort has been made to ensure the accuracy of the information contained in this article, it has been provided for information purposes only and is not intended to constitute legal advice. Specific detailed advice is required in every situation. Amorys Solicitors is a boutique commercial and private client law firm in Sandyford, Dublin 18, Ireland.

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