(12 years, 9 months ago)
Commons ChamberClearly, the fact that premiums are 84% higher shows what we in Northern Ireland have to bear. Part of the role of the cross-departmental ministerial Committee is to address that issue.
Premiums are high in Northern Ireland, but the number of compensation claims is falling, whereas in England and Wales it is increasing. The number of claims notified to the compensation recovery unit has reduced by 23% in Northern Ireland over a nine- year period, and over the same period it increased in England and Wales by 17%. It is a clear disparity—84% dearer insurance to start with, despite the fact that our claims are reducing. We have to ask why premiums are so high in Northern Ireland.
In 2009 the CRU was notified of 29,467 claims for compensation. In 2010 the county court of Northern Ireland made awards in only 768 civil bills for personal injury claims. The vast majority of claims are dealt with without the need for determination by the court. Again, claims are down but we are paying extremely high premiums.
In England and Wales a claim for damages arising from personal injury will routinely involve detailed claims for future caring costs. In Northern Ireland, these costs are reduced as injured persons will often be cared for by family members. That is perhaps the nature of us in Northern Ireland, but it is a factual example. In 2010, 87% of awards for personal injury in the county court were for less than £5,000. When there are claims, the average claim is small. That is important to note.
Does the hon. Gentleman know whether the reduction in Northern Ireland is a result of insurance companies still having plenty of assessors who look at claims and make sure they are not fraudulent or as high as they are in England and Wales?
I am not aware of all the details. I am aware only that compensation claims are down. The value is down, as well as the numbers. That indicates that we deserve consideration when it comes to premiums. That is the point I am making.
A number of the factors that are thought to have contributed to the rise in the cost of insurance premiums in England and Wales are absent from Northern Ireland—again, it is important to draw the comparison. The absence of no win, no fee agreements means that those in Northern Ireland who are seeking compensation must invest their own funds—perhaps that explains the previous point—before a legal claim can be brought. Alternatively, a solicitor’s practice may be willing to fund the outlays. This dissuades unmeritorious litigants. Furthermore, in England and Wales a successful plaintiff’s solicitor can claim a success fee, which can increase legal costs by up to 100%. There is no provision for success fees in Northern Ireland.
The insurance market in Northern Ireland shares a number of characteristics with England and Wales. The same advertisements are shown on TV. Admiral Group advertises on TV, as does Churchill, but underneath, the wee small print says, “Not available in Northern Ireland.” So although Churchill says, “Oh, yes” to every question he is asked, that does not apply to Northern Ireland, so there is clearly an issue to be addressed. The insurance market in Northern Ireland shares a number of characteristics, but not the price. That is the point we want to make.
Some time ago I had the opportunity to go with some of my constituents to meet the Department of the Environment in relation to a suggestion we were making. Perhaps the Minister in his response, as well as the Committee, will take this on board to see how we could reduce premiums and fees in Northern Ireland. One of the suggestions that was made concerned a new scheme that exists in parts of America and Europe, whereby a gadget, for want of a better word, is put in cars that monitors the speed and the mannerisms of the driver. That feeds back to a central place. That reduces fees because if drivers transgress, on the principle of “Three strikes and you’re out,” they lose their premium reduction. That might be a way of addressing some of the issues.