Report for minister links legal fees to rising insurance costs

A report prepared for Acting Jobs Minister Richard Bruton suggests that legal fees are driving up insurance costs, the Irish Independent reports.

The newspaper has used Freedom of Information (FOI) legislation to obtain a report by the National Competitiveness Council.

It states: “Throughout the recession, and relative to other professions, prices for legal services in Ireland proved extremely sticky and did not adjust downward to the degree that might have been expected, given economic circumstances.”

The link between legal costs and rising insurance premiums has been rejected by the Law Society of Ireland and leading legal figures.

The report also warns that the publication of an updated Book of Quantum could “result in higher costs and ultimately higher premiums”.

It suggests that the Book should be complemented by a benchmarking exercise comparing Irish awards against the rest of the EU.

Sinéad Carroll, partner in the litigation department of Cantillons Solicitors in Cork, told Irish Legal News: “I note, with disappointment, the commentary in today’s Irish Independent. The commentary suggests that the ‘fat cat lawyer’ is to blame for the rise in insurance premiums.

“Last week it was the unfortunate injured victim who was to blame, now it is the lawyer. What is regrettable is that there has been little or no information and/or comment as to the cause of the underlying claims and whether or not the cases should have been defended and whether or not unnecessary sums were paid in defending the indefensible.

“It has been my experience in many cases, that there are settlements late in the day. Late settlements are costly because legal expense will have been incurred in the interim. How many of them could have been settled at an earlier point, before significant fees were incurred?

“It astonishes me to see that there is no mention of other reasons for the increase in insurance premiums. There has been no objective analysis of the various factors such as poor underwriting, or trying to rectify the ‘books’ following loss leading premiums. I would welcome clarification from the Insurance industry on this point.”