Government plans to cut personal injury awards have been shot down by judges amid fears they would be open to a raft of legal challenges.

Senior judges have warned a stop-gap measure proposed by Justice Minister Charlie Flanagan to bring down the size of awards for minor injuries might not stand up if tested in court.

Mr Flanagan had wanted judges to participate in a group with officials from the Department of Justice and the Personal Injuries Assessment Board (PIAB) to revise guideline award levels for less serious injuries such as whiplash.

However, after consulting with other senior judges, Chief Justice Frank Clarke told the minister there were "very considerable legal difficulties" with the proposals. In a letter obtained by the Irish Independent, he said what was proposed "would almost certainly lead to a succession of challenges".

The failure of the proposals will intensify pressure on the Government over the slow pace of insurance cost reform. The deputy governor of the Central Bank, Ed Sibley, joined those calling for action yesterday when he said more progress was needed.

He said guidelines on recalibrating compensation awards made in the courts were needed. Speaking at an Insurance Ireland event, he said the greater the uncertainty around the cost of settling claims, the greater the provisions insurers needed to set aside.

"Policy actions, such as judicial guidelines, that lead to greater certainty and reduced volatility of claims and create a more stable reserving environment for insurance firms are needed," he said.

"A more stable claims environment could contribute to an increase in the availability of insurance, and a reduction in premium levels, providing the insurance industry shares the benefits of the changes with customers."

Mr Flanagan had wanted to set up the group as an interim measure pending the introduction of a Judicial Council, legislation for which has stalled for long periods since being brought forward in 2017.

The rejection of the proposals has left the Government with no option but to focus on getting the council set up as soon as possible.

It now plans to fast-track the legislation to have it passed by the Dáil summer recess in July. A report last year by the Personal Injuries Commission found awards for minor injuries were almost five times the level of those in Britain.

It recommended a future Judicial Council recalibrate and rebalance guidelines for appropriate damages. It also said in the event of any delay in establishing the council, the Government should set up "a formal network", including PIAB, to assist the judges complete new guidelines.

Mr Flanagan wrote to Mr Justice Clarke with proposals for such a group in February. Correspondence released under the Freedom of Information Act reveals the plan was quickly rejected.

The Chief Justice told the minister the judiciary was willing "to engage actively in considering appropriate measures". However, he said judges were concerned existing PIAB legislation did not appear to contain any criteria under which a recalibrated scale of damages could be formulated.

He said there was "a strong argument" the Book of Quantum, the current set of guidelines for awards, could only reflect the "going rate" rather than any "recalibration".

The Chief Justice also said judicial participation might convey the impression judges were involved in the discharge of a statutory function of a Government agency, when the agency's rationale in setting guidelines may be the subject of scrutiny in the courts.

"The legal issues which we have identified would almost certainly lead to a succession of challenges which would inevitably be followed through to the higher courts," he said.

Irish Independent