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The compo-culture cash cow

An Cailín Rua

An Cailín Rua
Anne-Marie Flynn

While there is plenty of media commentary about the housing crisis and rent costs, other areas of everyday life draining citizens’ wallets appear to be falling beneath the radar. The mysteriously rising cost of petrol and diesel, for example, appears unworthy of discussion. And of course, while the rising cost of insurance premiums has been flagged, the connection between the apparently disproportionate settlements of injury claims both in and out of court is rarely discussed. Yet, barely a week goes by where a seemingly innocuous injury is compensated to the tune of thousands.
Some examples from recent years. A settlement of €80,000 was approved last week for a boy who, as a 13 year old, climbed a fence to enter a construction site and retrieve a ball, slipped and was left with a ‘nasty scar’ after cutting his arm on the fence. Another teenager, knocked down while crossing a road, settled her high court action last week for €1.5 million against the business for whom the driver worked (despite no apparent evidence of wrongdoing by the driver in the media reports). Another young man was awarded €97,000 for a fall on a footpath in Cork. A woman awarded €75,000 for injuries suffered after slipping on a wet floor in a supermarket.
This is not to belittle the consequences of these incidents, some of which can have life-changing implications for people and families. Who are we to deny this? There is also, obviously, a very strong argument that people should be safe and protected while going about their business. However, such settlements can also highlight the inherent unfairness within the system.
In 2017, a young man fell off a child’s swing as a 15 year old and as a result is paralysed from the waist down. He received €975,000 in the High Court action against the owners of the park in which the incident occurred. Clearly, the incident had devastating consequences for the child, but how on earth can business owners be expected to prevent things like this from happening when human beings make poor decisions, all by themselves?
There is one common denominator in all of the above cases – Justice Kevin Cross, a man who also presides over many distressing personal-injury cases relating to the health system.
He is not alone. In November 2017, Justice Raymond Groarke ruled that a proposed €25,000 settlement offered to a child who had suffered scarring of the eyebrow after a fall in a crèche was ‘insufficient’.
A number of play centres are now in serious financial difficulty due to rising insurance premiums. It must be acknowledged that while children are entitled to an environment as safe as reasonably possible, accidents do happen, and entire industries should not be punished.
Interestingly, in 2017 – obviously aware that his role in such cases had not gone unnoticed -  Justice Cross mounted a defence in the Bar Review law magazine, suggesting that the insurance industry is actually responsible for promoting the ‘compensation culture’ narrative, and that attempting to influence and reduce the level of damages being paid. He maintained that both the level of general damages and the cost of litigation had actually decreased, and that the increases in premiums were down to mismanagement and lack of competition within the insurance industry. It’s a view that is echoed by many solicitors, who will argue that instead, there should be a greater focus on preventing accidents in the first place.  
This may be so – and indeed, there has been a decrease in personal-injury claims in recent times, which certainly places the ‘compo culture’ narrative under scrutiny – but Justice Cross cannot claim that the judiciary’s enthusiasm for approving what appear to be disproportionate settlements is not, at least, facilitating an environment of which private insurance companies will attempt to take advantage. Many will settle out of court for lesser amounts, sometimes with very little scrutiny of claims. After all, despite the PR spin, their primary concern is their shareholders, not injured parties. And the more money gained in premiums (and the less in claims) the better the dividends.
One thing’s for sure. It won’t change any time soon. Now, where did I put that bubble wrap?