Jim O’Callaghan, the minister for justice, is under significant pressure from his government colleagues to halt a major increase in personal injury payouts, writes Brian Mahon.

Ministers are worried a rise in payouts – recommended by the Judicial Council – could lead to a big increase in insurance premiums for small businesses.

Coalition TDs and business groups are also alarmed over plans to allow the increase by the judiciary, cautioning it would "wipe out" any progress to bring premiums down.

Last year, the Judicial Council recommended that awards for personal injury claims should rise by 16.7 per cent, reflecting inflation since the figures were last set.

Payouts for shortened life expectancy are set to rise from €550,000 to €640,000, with "severe" ankle injury payouts to increase to a maximum of €117,000.

The figures have to be reviewed every three years under the rules, which were presented to O’Callaghan in late January. One senior source in the Department of Enterprise said there is widespread concern over the impact of the increase on businesses.

Sources in the Department of Justice insisted the insurance issue was never meant to be brought to Cabinet today, and was always meant to be discussed at the subcommittee on insurance reform before being presented to ministers.

Robert Troy, junior minister in the Department of Finance, said: "I recognise the concerns of the business community in relation to insurance costs, particularly for SMEs [small and medium-sized enterprises].

"I and my officials have held constructive talks with ISME [the Irish SME Association] in recent weeks, and their feedback has been taken on board as we finalise the Action Plan on Insurance Reform.

"The use of litigation, particularly in relation to personal injuries, is an ongoing concern and directly impacts rising premiums. I am aware the Department of Justice is exploring options for reform of the Judicial Council, who set injury awards levels, and this is to be welcomed."

A Department of Justice spokesman said Minister O’Callaghan is "acutely aware" of the impact such amendments will have on premiums and the business community.

Fine Gael TD Joe Neville said he would be "very cautious" of the proposals, noting businesses are already struggling with high costs.

"I would tread very carefully in relation to any measure which could drive insurance costs higher," he said.

Numerous Fianna Fáil sources indicated discontent in the Justice Minister’s ranks and questioned if the legislation to give way to the 16.7 per cent hike needed to be brought forward in the coming weeks.

It comes as the Courts Service’s report for 2024, published yesterday, showed a large drop in the amounts paid out in personal injury awards.

There were 12,989 new personal injury cases last year, down from 13,434 in 2023. There was a drop in the amounts awarded, from €256m to €135m, in the high court.

At circuit court level, awards fell from €16m to under €13m, while district court awards dropped from €2.2m to €1.5m. In total, the level of awards for personal injury fell 45 per cent last year.

Photo: Jim O'Callaghan. (Pic: Leon Farrell/RollingNews.ie)