The Irish Times view on the Supreme Court decision on personal injury guidelines: consumers should benefit

The Supreme Court ruling that personal injury award guidelines must be followed by the courts averts a potentially serious setback to the Government’s efforts to reduce insurance costs.

The court found by a four to three majority that it had been unconstitutional to grant the Judicial Council the power to set the new personal injury guidelines. While this has implications for any future changes, the court also found that the subsequent independent ratification of the guidelines by the Oireachtas made them legally binding.

A constitutional challenge to the guidelines – which came into effect in April 2021 – was inevitable given that awards made as a result of their introduction are significantly lower than the previous norms set by the Book of Quantum. In the case in point, damages for an ankle injury suffered by the plaintiff were €3,000 under the guidelines and would have been up to €34,000 under the previous system.

Further court actions cannot be ruled out. But the Supreme Court has set a high bar for any further challenges. The clarity brought by yesterday’s judgment should have the effect of further encouraging claimants to avoid the courts in favour of the lower cost route provided by the Injuries Resolution Board.

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The purpose of the IRB is to reduce the cost to insurers of settling claims, which should in turn feed through into lower premium costs for consumers and businesses. The IRB says that in its first full year of operation – 2022 – it generated savings in this regard of €40 million, while average awards were down by 34 per cent.

The extent to which these savings – and the additional reductions in insurance company costs due to the application of the new guidelines by the courts – are being passed on to consumers is difficult to ascertain, given the opaque nature of insurance pricing. But the downward movement in awards indicates that lower premiums are now overdue. The industry must step up and deliver – and the Government needs to do all that it can to ensure that this happens.