Opinion: Why Falling Injury Awards Are Nothing to Celebrate

We recently read with interest the news story, and many like it, celebrating the supposed success of the 2021 personal injury guidelines. With headlines proclaiming a dramatic fall in both the number of claims and the value of awards, you would be forgiven for thinking that we are entering a golden age of fairness and reduced costs. But to us at Claimsboard.ie, this narrative is not just misleading; it is a dangerous fiction that ignores the harsh realities faced by genuinely injured people in Ireland today. The story, and the chorus of approval that has accompanied it, suffers from a catastrophic blind spot: the corrosive, relentless impact of inflation.

To celebrate a reduction in awards without acknowledging the simultaneous surge in the cost of living is, at best, disingenuous. It is like praising a ship’s captain for using less fuel while the vessel is taking on water. The reality is that the personal injury guidelines, introduced in 2021, were rendered almost immediately obsolete by an inflationary storm that has seen the cost of everything from a loaf of bread to a litre of petrol skyrocket.

“To celebrate a reduction in awards … is like praising a ship’s captain for using less fuel while the vessel is taking on water.”

Let’s be clear: the Harmonised Index of Consumer Prices (HICP), the very metric used by the Judicial Council in its recent review of the guidelines, has risen by a staggering 15.6% since their introduction. The Consumer Price Index (CPI), a measure more familiar to the average household, paints an even starker picture, with a cumulative increase of 17.3% between 2020 and 2023. What this means, in real terms, is that a €10,000 award in 2021 is worth significantly less today. The cost of medical treatment, of adapting a home after an injury, of childcare while a parent recovers, of simply putting food on the table – all have risen dramatically.

So, when we read that the median award value has fallen by 29%, we are not seeing a victory for fairness. We are seeing a stealthy and substantial erosion of the real-world value of compensation for those who have had their lives turned upside down by an accident. The recent proposal to increase the guidelines by 16.7% is not some generous gift; it is a belated and barely adequate acknowledgement of a problem that has been festering for three years. It is a tacit admission that the original guidelines are no longer fit for purpose.

And what of the insurance industry in all of this? For years, we were told that sky-high premiums were a direct result of exorbitant awards. The narrative was simple, seductive, and repeated ad nauseam: bring down the awards, and premiums will follow. Well, the awards have come down, and in real terms, they have come down even further than the headline figures suggest. And yet, has the average motorist, the small business owner, the community group, seen a corresponding and sustained fall in their insurance costs? The silence from the industry on this front has been deafening.

This brings us to a more fundamental, almost philosophical, point about the nature of insurance. What is it for? Is it merely a tax on living, a mandatory or near-mandatory expense that we all must bear for the privilege of driving a car or running a business? Or is it a contract, a solemn promise that if the worst should happen, if you are injured through no fault of your own, you will be looked after?

We at Claimsboard.ie believe it is the latter. Insurance is a social contract, a collective pooling of resources to ensure that the burden of an unexpected catastrophe does not fall on the shoulders of one individual. We pay our premiums, often at great personal expense, in good faith. We trust that if we are the unlucky one, the one who slips on a wet floor in a supermarket, the one who is rear-ended at a set of traffic lights, the one who is injured by a falling object on a construction site, that the system will be there for us.

But the current narrative, the one that celebrates falling awards and fewer claims, undermines this fundamental principle. It fosters a climate of suspicion and hostility towards those who have the temerity to seek what they are rightfully owed. It implies that every claimant is a potential fraudster, that every injury is an exaggeration, that the system is a lottery to be won rather than a safety net to be relied upon.

This is a disgraceful and deeply cynical position. The vast majority of people who make a personal injury claim are not chancers. They are ordinary people who have been hurt, who are in pain, who are facing unexpected financial pressures, and who simply want to be put back in the position they were in before the accident. They have a legal and moral right to claim, a right that is being subtly and systematically undermined by a relentless focus on cost-saving at the expense of justice.

Let us not forget that behind every statistic is a human story. A factory worker with a debilitating back injury who can no longer lift his children. A young woman with a facial scar that has shattered her confidence. An elderly man whose life has been irrevocably altered by a fall that has left him with a permanent limp. These are not statistics to be celebrated in a press release. They are real people, with real lives, and they deserve our compassion and our support.

The argument that lower awards are necessary to create a more competitive insurance market is a red herring. It is a race to the bottom that ultimately benefits no one but the shareholders of insurance companies. A truly competitive market is one where insurers compete on price, on service, on their willingness to pay out valid claims promptly and fairly. It is not a market where the value of a person’s health and well-being is determined by the lowest possible denominator.

The time has come for a more honest and mature conversation about personal injury compensation in Ireland. A conversation that acknowledges the reality of inflation, that respects the fundamental principles of insurance, and that upholds the right of every individual to seek justice when they have been wronged. The recent proposal to increase the guidelines is a start, but it is not enough. We need a system that is not just fit for purpose today, but that is flexible enough to adapt to the economic realities of tomorrow. We need a system that is not just about saving money, but about valuing people. And we need a media and a political class that are willing to challenge the self-serving narrative of the insurance industry and to stand up for the rights of the ordinary citizen.

Until then, we at Claimsboard.ie will continue to call out the hypocrisy and the injustice of a system that celebrates falling awards while the real value of those awards is being eaten away by inflation. We will continue to stand up for the rights of the injured, and we will continue to remind the insurance industry of the promise it has made to us all: that when we need them most, they will be there. Anything less is not just a broken promise; it is a betrayal of the social contract that underpins our society. And that is something that none of us should be celebrating.