Minister for Justice to increase Injury Award by 16.7%

The financial burden may fall squarely on consumers and small businesses

Minister for Justice to Recommend 16.7% Injury Award Hike While Promising Insurance Reform Slammed as Short-sighted and Costly

Recent media speculation that the Minister for Justice is preparing to unveil a ‘five-point plan’ to tackle soaring insurance premiums, while simultaneously backing a 16.7% hike in personal injury awards, can only be seen as a short-sighted political manoeuvre that will only drive-up costs for consumers and businesses, many of whom are already struggling with cost-of-living challenges.  Approval of the Judicial Council’s recommended 16.7% increase would disproportionately benefit the legal profession, with the financial burden falling squarely on consumers and small businesses.

That’s the stark warning from Declan O’Rourke, CEO of Aviva Insurance Ireland DAC (Aviva), who says that the Minister’s approach risks undoing years of hard-won progress in stabilising the insurance market.

“News that the Minister for Justice is preparing to bring a memo to Cabinet recommending that the Oireachtas approves the controversial 16.7% increase in personal injury awards has sparked alarm across small businesses and the voluntary sector. While the proposed hike may be welcomed by the legal profession, it is the wider public who will ultimately pay the price through higher insurance premiums, rising legal costs, and the potential unravelling of hard-won reforms designed to bring stability and fairness to the personal injuries system.

“The Central Bank of Ireland’s NCID report issued on Thursday last highlights the fact that motor insurance claims costs rose by 23% in the first half of 2024, driven by the fact that motor insurance damage claims have jumped by a staggering 179% when compared to the 2015-2019 average. Inflation, supply chain disruptions, parts and labour shortages, and a changing vehicle mix—with more high-tech, high-spec cars are all contributing to the increased costs. Despite these increases, the average car insurance premium is currently lower than it was in 2018, and lower than our nearest neighbours - the UK.

Media speculation around the Minister’s five-point plan includes potential reforms to the Injuries Resolution Board and an expansion of the Judicial Council to include broader sectoral representation. While these proposals are welcome in principle, they appear to signal that the Minister believes it is already too late to intervene in the Judicial Council’s recommendation. Instead, he seems to be pivoting toward promises of future systemic reform in an attempt to soften the blow of the 16.7% increase.

“However, this will offer little comfort to a public already grappling with a cost-of-living crisis. Without immediate and decisive action, there is a real risk of sliding back into a claims culture that benefits only those who profit from legal complexity and inflated awards. It is not too late to take action to stop this increase and move forward with meaningful reform, starting with a more transparent, balanced, and evidence-based approach to reviewing personal injury guidelines.

“One of the more constructive proposals in the yet-to-be-published five-point plan is to extend the review cycle for personal injury guidelines to seven years. The current three-year cycle is widely regarded as too short to allow reforms to take hold. It fosters instability and unpredictability in the personal injuries system, precisely the issues the guidelines were intended to resolve. However, the current approach risks multiple versions of the guidelines being applied at the same time, undermining consistency, and legal certainty.

The suggested proposal from the Minister to benchmark damages against EU norms raises serious concerns, particularly as the public was led to believe this was already embedded in the original guidelines. If such benchmarking was conducted, why was the research never published? The draft second edition admits the Judicial Council relied solely on comparisons with England, Wales, and Northern Ireland, based on legal advice that these were the most comparable jurisdictions. But why weren’t other EU countries, especially those without a compensation culture considered? The lack of transparency erodes trust and raises questions about whether the interests of Irish consumers and small businesses were ever factored into the review. The Minister should reject the Judicial Council’s proposal and ensure a proper, evidence-based benchmarking exercise is completed before imposing further costs on the public. Compensation must be fair and proportionate - not just for claimants, but for society.

Declan O’Rourke, CEO of Aviva Insurance Ireland DAC (Aviva) said.

“While this admission that the original legislation is flawed is welcome, it is not too late to fix. However, locking in a 16.7% increase for seven years would inflict far greater damage, delivering a serious blow to consumers and businesses alike. Benchmarking must come first. We need to get this right before imposing such a long-term burden on the public.

The idea of a mixed Judicial Council is also promising, though its implementation remains unclear. The IRB, which assesses almost 10,000 cases annually, was not consulted when drafting the first edition of the Guidelines or during the review, the Minister plans to include them in any future reviews together with sector representatives. This could bring some much-needed balance to the process that is lacking in transparency.  You can’t help wondering what sectors will be involved, it is likely it will still be dominated by legal representatives, who are all mostly on the same side of this debate.

“The Minister’s speculated proposal to involve the Injuries Resolution Board (IRB) in setting guidelines and to strengthen it into a quasi-judicial body for small claims is bold and potentially beneficial, streamlining claims and reducing legal costs. However, it raises serious constitutional questions, particularly around the right of claimants to access the courts. Any such reform must be carefully designed to avoid legal challenges that could derail the entire initiative.

“Despite the IRB’s original aim to reduce legal involvement, 95% of claimants are still represented by solicitors, not because the process is overly complex, but because consumers are often led to believe legal representation is necessary. In some cases, legal advice is appropriate, and we always recommend it when we have any concerns. However, in the vast majority of minor personal injury cases, legal representation is not necessary.

“The proposal to revise the monetary limits of court jurisdictions to manage costs also carries significant risks. While it may reduce some legal expenses, history has shown that it could also fuel inflationary pressure on awards, as solicitors increase the potential value of a claim to access a higher court. The lack of written judgments in the District and Circuit Courts—acknowledged by the Judicial Council—further complicates matters.

“A more effective and overdue solution would be the introduction of scales of legal costs, a long-promised reform included in the 2020 Government Action Plan that remains conspicuously absent from the current five-point plan. 

“The Government needs to reject the Judicial Council’s proposal for the 16.7% increase, and request that the Council benchmark awards, particularly for minor injuries across other EU jurisdictions, where the awards are up to 10 times lower than in Ireland,” concluded Declan O’Rourke.

Media Centre

Visit our Media Centre page to find our latest new releases and media contacts details.