End of Compo Culture

Compensation Culture

5 April 2016

A number of personal injury awards by the High Court have been halved by the Court of Appeal, with some criticism of the approach adopted by the original judges.

There have been a run of these reductions lately, experts said, in a sign that judges may be changing their approach to injuries awards, whose size had been leading to a rise in ‘compo culture’

Elevated court awards are a factor in the 30pc rise in motor insurance premiums, according to experts.

Jobs Minister Richard Bruton has pressed judges to tackle the problem of hugely inflated insurance premiums by sticking to new guidelines on compensation claims. Mr Bruton held a meeting with the President of the High Court, Mr Justice Peter Kelly, in a bid to get judicial support for guidelines due to be published this summer.

The meeting came after senior executives at Axa Insurance complained to Mr Bruton about cases where courts awarded significantly more damages than the insurance companies involved had expected.

Now it has emerged that the appeal court has radically reduced a number of awards in personal injuries case lately.

In a judgement delivered on March 18 last, Ms Justice Mary Irvine of the Court of Appeal halved damages awarded to Rita Shannon and Anthony Shannon.

The pair had told Ms Justice Aileen Donnelly in the High Court in Kilkenny that they had extensive injuries after a motor accident when the car they were in was hit by Debbie O’Sullivan, who was insured by Axa.

Mrs Shannon had been awarded a total of €131,463, and Mr Shannon was awarded €91,463 in total.

But the Court of Appeal “took issue with the conclusions of the learned High Court judge”, according to Ms Justice Irvine’s appeal judgment.

The injuries suffered by the pair were modest. They had not missed work and had not attended a doctor for 14 months after the accident.

Mrs Shannon’s total award was reduced to €65,000, with Mr Shannon’s reduced to €40,000 by the appeal court.

It comes after other cases where awards were reduced on appeal. In Nolan v Wirenski, the Appeal Court reduced a total award of €125,650 in a personal injuries action to €65,000.

The injuries to Ms Nolan, in a car that was rear-ended, were described by Ms Justice Irvine in her appeal judgment as “relatively minor”.

Insurance expert Dorothea Dowling said the lowering of the awards was a recognition by the Court of Appeal of public policy issues. Ms Dowling was chairwoman of the Injuries Board for 10 years. She is also a former head of claims for the CIE group. “Proportionality and consistency are essential requirements of justice.”

She said the Shannon decision was the latest in a line of reductions in High Court awards of recent years by 50pc.

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