Law Reform Commissioner Raymond Byrne has said that a new report on capping personal injury damages recommends two models where it would be constitutionally permissible to enact legislation.
Both models allow for an upper cap limit for general damages and some kind of judicial discretion in exceptional circumstances or where there is catastrophic injury.
The Law Reform Commission examined four models to see if any of them would be constitutionally permissible in Ireland.
Mr Byrne said the report concluded that the capping model recently enacted in the Judicial Council Act meets constitutional tests - and the draft guidelines being put forward by the Council later this year should be allowed to be applied in practice.
He told RTÉ's Today with Claire Byrne that a second model was also recommended.
This is based on a 2018 English act that allows for a judge in exceptional circumstances to apply "a judicial uplift" to disapply an upper cap limit and allow discretion in some circumstances.
He said the LRC did not examine anything related to insurance awards but he hopes that this report will make a contribution to the debate around costs of insurance.
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The report will be recommended to the Government and Mr Byrne said that it is part of a lot of activity around policy development to deal with the cost of insurance claims.
He also stressed the recommendations will apply to general damages and not to awards for special damages where the costs of future medical expenses and loss of wages may be factors in any overall award.
The Director of Alliance for Insurance Reform Ireland has welcomed the report from the LRC on capping damages in personal injury claims, describing it as "timely" coming in the middle of an insurance crisis.
Peter Boland said there will be no recovery from Covid-19 through Small and Medium Enterprises, or through voluntary and community groups, unless we get the cost of insurance down.
Mr Boland said the biggest element of every insurance premium, by far, is damages paid in personal injury claims.
Law Reform Commission report on capping damages in personal injuries
He told RTÉ's Morning Ireland that personal injury claims here are four times 4.4 times higher than in the UK, and many multiples higher than in the rest of Europe.
Mr Boland said the Alliance was waiting for draft guidelines from the Judicial Council, which are due by 28 October.
If the council recommends dramatic reductions, he said, there is no reason why that should not be
reflected in insurance premiums straight away.
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Mr Boland said the Alliance has never had an issue with special damages but the issue has always been about general damages for minor injuries that he described as "paracetamol injuries".
He said that awards of around €20,000 are being awarded for injuries that could be resolved with a good night's sleep and couple of paracetamol.
As well as being eye-watering, he said, it is not sustainable.
But Stuart Gilhooly, a litigation solicitor and Past President of the Law Society, said he believes that the insurance industry will not reduce premiums significantly if a cap is placed on damages on personal injury claims.
Speaking on RTÉ's Today with Claire Byrne, Mr Gilhooly said there should be consistency in guidelines issued to judges about amounts that can be awarded.
"Some judges will be known as being more generous than others," he stated.
Mr Gilhooly said insurers have "refused to concede" that they will guarantee a reduction in premiums if damages are capped, adding that judicial discretion "must be available" when making awards.
"If you don't have that, you will have injustice and you will have constitutional challenge," he stated.
Linda Murray, owner of Huckleberry's Den play centre in Navan in Co Meath, and a member of the Alliance for Insurance Reform, said the cost of insurance is "killing small businesses".
She said she pays €22,000 a year for insurance on her play centre.
Ms Murray explained that the average cost of an injury claim increased by 54% from €30,000 in 2009 to €47,000 in 2018.
