Government to examine no-fault injury compensation to cut legal costs

The Irish government has ordered a review of the way the State Claims Agency handles catastrophic injury claims, with a view to ending lengthy and costly litigation.

Government minister Ann Phelan told senators that finance minister Michael Noonan had agreed to expand the annual process of external review to consider the potential cost of introducing a “no-fault” system of compensation.

A private members’ motion submitted by ten senators on Wednesday 7 October had called for an end to “lengthy, arduous and costly litigation between citizens and State agencies”.

It also proposed “replacing an adversarial and confrontational legal culture with a more user-friendly, prompt, no-fault system of settlement and compensation”.

Under a no-fault system, there is no need to establish blame or individual responsibility. A claim against the Health Service Executive (HSE) would only require proof that an injury was caused by medical treatment by the HSE.

However, Ms Phelan said the terms of reference for the review will say its proposals must not increase overall claim costs, nor increase the amount paid to “undeserving cases, especially at the expense of deserving cases”.

She suggested that a no-fault system could reduce legal fees, but increase overall costs for the State in a time of austerity.

Independent senator Sean Barrett told the Seanad after Ms Phelan’s announcement: “I compliment the Labour Party Senators, in particular Senators Whelan and Landy, and the Minister of State, Deputy Ann Phelan, for agreeing to study the question of legal costs and the substitution of a no-fault system for the adversarial system.

“It is a most interesting matter as we do have high legal costs in Ireland. A figure in the NTMA annual report 2014 is for an award of €1.9 million to a child who received catastrophic injuries. The legal costs in that case were over €1 million. The Taxing Master reduced those legal costs to €373,500.

“Does a no-fault system encourage frivolous, vexatious or badly-proven claims? Does the adversarial system curb those? Does the adversarial system cost too much? It is a most interesting reform and I wish that study well.”