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 INJURIES

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 14^th 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.

IRELAND AND THE UK – COMPARING LIKE WITH LIKE?

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.

REPORTING FRAUD

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 4^th 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.