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Why ‘the Uplift’ Could Derail Insurance Reforms

Why ‘the uplift’ could derail insurance reforms

While new judicial guidelines on personal injury payments implemented since April 24th do not deliver the 80% reduction in minor injury damages that would have been necessary to bring us close to comparable jurisdictions, they do deliver an estimated 50% reduction, which is still significant and must now be passed on by insurers.

As well as reducing damages and hence claims costs, the other potential benefit of the new guidelines is consistency. There should be no reason why damages for personal injuries would vary dramatically in the future, be they court awards, insurance company settlements or PIAB assessments. This consistency would ensure that there is no need for a lengthy and costly litigation process in many cases and is essential for underwriters trying to cost insurance products.

However such consistency is potentially undermined by the lack of a quantified approach to multiple injuries in the new judicial guidelines.

Certainly, the guidelines do state that:

In a case of multiple injuries, the appropriate approach for the trial judge is, where possible, to identify the injury and the bracket of damages within the Guidelines that best resembles the most significant of the claimant’s injuries. The trial judge should then value that injury and thereafter uplift the value to ensure that the claimant is fairly and justly compensated for all of the additional pain, discomfort and limitations arising from their lesser injury/injuries. It is of the utmost importance that the overall award of damages made in a case involving multiple injuries should be proportionate and just when considered in light of the severity of other injuries which attract an equivalent award under the Guidelines.”

REF: https://judicialcouncil.ie/assets/uploads/documents/Personal%20Injuries%20Guidelines.pdf

But while the uplift approach is outlined, it is not quantified. Will the uplift in Ireland for second and subsequent injuries be 10% or 90%? And in the next 2 to 5 years, while claims under the new guidelines are making their way to court, how can PIAB or insurers second-guess what the Courts may decide when those cases finally get to the courtrooms?

 The situation in England & Wales is illuminating. From the 31st May, the ceiling on uplifts for second and subsequent injuries in whiplash cases is 20% in exceptional circumstances:  

“The England & Wales Regulations confirm that an uplift to the tariff may be applied in exceptional circumstances by a Court where the degree of PSLA (pain, suffering and loss of amenity) makes it appropriate to use the greater amount and the whiplash injury was exceptionally severe or where the person’s circumstances are exceptional and cause an increase in PSLA.

“The uplift can be applied to whiplash-only injuries, whiplash and minor psychological injuries, and the whiplash element of a claim where the claimant sustained other injuries too. The Regulations confirm that the uplift amount cannot exceed the tariff amount by more than 20%.”

 REF: https://www.lexology.com/library/detail.aspx?g=bd239ceb-9952-4f19-9234-e63b1bd3797d

We would expect the implementation of the uplift in Ireland to reflect this precedent from our nearest judicial exemplar.

So we call on Government to take whatever measures are necessary, including running trial cases, to quickly gauge what the uplift will be in Ireland and allow the new guidelines to take full effect as soon as possible.

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