Personal injury awards and legal fees fell during past decade, report finds

four courts, dublin

23 July 2022

Award levels in personal injury and medical negligence cases fell significantly during the past decade while legal fees also decreased, a report has shown.

The report, by consultants EY, said an analysis of data from more than 250 cases between 2011 and 2019 contradicted popular perceptions that awards increased significantly as well as the general narrative that litigation costs have been rising steadily.

It found the median award in personal injury and medical negligence cases fell by 12pc between 2011 and 2013 and 2017 and 2019.

Fees paid to barristers and solicitors across the cases examined fell by 10pc in the same time frame, even though the median duration of cases increased by almost a third.

EY also found a third of each bill of costs was paid to the State, either through court duty, which is currently 8.5pc, or the 23pc VAT on professional fees.

The report, commissioned by the Bar of Ireland and the Law Society, was recently submitted to the Department of Justice and Indecon, consultants appointed by the department to evaluate options to control litigation costs.

The legal professional bodies said the EY report was independent and conducted for the purpose of obtaining conclusive analysis to assist the discussion on the future direction of legal costs.

The most significant finding in respect of that discussion was a recommendation that non-binding guidelines for legal practitioners be introduced to control litigation costs as opposed to a table of maximum costs.

In 2020, a civil justice review group chaired by former High Court president Peter Kelly put forward both options but was divided on which model should be chosen.

Judges and lawyers in the group favoured non-binding guidelines, which allow for more flexibility. They argued that mandatory scales, favoured by civil servants in the group and by Mr Justice Kelly, may infringe EU competition law.

The EY report concluded that non-binding guidelines were more favourable as they allow for the length and complexity of a case, positively impact on the quality of service to clients and take general economic conditions into account.

The Kelly review group concluded Ireland was “a high-cost litigation jurisdiction” and this was a barrier to access to justice, increasing costs in the economy, hampering national competitiveness and imposing a burden on taxpayers in cases involving or financed by the State.

Also in 2020, the World Bank’s Doing Business report found Ireland to be the fourth-most expensive jurisdiction in the EU for litigation of commercial contract disputes.

However, EY said the assertion that Ireland was a high legal costs jurisdiction was not strongly supported by evidence. It also said the reliance that could be placed on the World Bank report had reduced due to concerns over data irregularities.

EY’s findings are expected to be considered by Indecon before it reports to the department in the coming months.

Justice Minister Helen Mc- Entee has announced moves aimed at improving the civil justice system on foot of the Kelly report.

However, measures relating to legal costs will not be introduced until after Indecon reports.

EY’s analysis of legal fee levels was based on data from 256 personal injury, medical negligence and judicial review cases.

The report’s findings in relation to awards was based on 184 personal injury and medical negligence cases.

EY said senior and junior counsel fees declined by 23pc between 2011 and 2019 in respect of both fields.

The report noted there had been reductions in all fees paid by government departments and state agencies as part of financial measures in 2009.

It also said the data suggested a trend of reduced awards was occurring before personal injury guidelines slashing award levels were introduced last year.

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