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Legal Focus: A time of change for Northern Ireland insurers

Northern Ireland’s Green Book is under review by a panel of legal experts from different areas

Insurers in Northern Ireland are hoping the current Green Book review will improve fairness and predictability in general damages awards

This year seems to be a time of change for compensating insurers across the UK, especially in Northern Ireland.

At present, Northern Ireland’s Green Book – the common name for the Fifth Edition of the “JSB Guidelines for the Assessment of General Damages in Personal Injuries Cases in Northern Ireland” – is under review by a panel of legal experts from different areas, including judges as well as plaintiff and defence solicitors.

The review comes against the backdrop of ongoing reviews of discount rates across multiple jurisdictions and the consultation regarding the review of County Court scale costs. Representatives from insurance companies, including the Forum of Insurance Lawyers’ Northern Ireland branch, have also recently provided their feedback in response to the Department of Justice’s invitations for submissions on the Northern Ireland discount rate (currently at -1.5%).

The justification behind awarding reasonable damages in Northern Ireland is to mitigate the impact of the cost of insurance on an insurer’s consumer base. Consumers ultimately shoulder the burden of these damages payouts. This was highlighted by recent reports from the Association of British Insurers, which indicated in 2021, 30% of the expenses associated with every motor insurance policy in the UK were paid to compensate injury claims.

There are a number of areas in which the Northern Ireland insurance industry is hoping to achieve fairness and predictability in general damages figures through the Green Book review.


Damages bands expanded 

The first of these is an expansion in the range of damages bands, amid a recent surge in awards being granted. The primary advantage of the Green Book is its ability to enable insurers to make reserve estimates with a high degree of accuracy. However, we have seen a decrease in this predictability and certainty as a result of rising court-awarded settlements. During consultations, plaintiff lawyers have been citing inflation and increases in the retail price index as contributing factors of this drop in certainty.

Insurers are likely to expect a wider range of damages bands, even if the Green Book committee considers different nuances rather than applying a single uniform benchmark to all damages brackets.

Tying in with this, the second aspect insurers are hoping for is that damages for less significant injuries do not rise. We have seen relatively substantial compensation awards for minor injuries that last for only a few days or weeks. It might be appropriate for the Green Book to specify awards in the range of a few hundred pounds in such cases, instead of allowing a higher initial sum for injuries that are little more than a minor inconvenience, resulting from an accident where the claimant comes out of it mostly unharmed.

Mitigating the effect of fraud is another key thing insurers are hoping to see as a product of the revised Green Book. When challenging difficult claims, fraud handlers might be hoping for a development of the position set out in the 2019 Green Book in relation to exaggerated whiplash claims.

The current edition calls for particular care concerning cases where allegations of fraud can easily be made but not easily proved. The Green Book reinforced the notion the medical expert will rely on each plaintiff’s honesty to the degree that “exaggerated claims may call into question the very existence of whiplash injury”.

Insurers seek to provide compensation for honest claimants so the Green Book’s comments on fraud help to bring about justice for all parties – allowing insurers to pay legitimate claims and call into question claims that appear to be fraudulent.


Complex cases

Finally, insurers have long hoped for greater clarity concerning damages in complex areas. The industry keenly anticipates the revised Green Book and the clarification of awards for challenging areas such as psychological injuries, where awards for lower-impact injuries in the area (such as adjustment dis­orders) have surged extensively in recent years.

Another difficult area is non-facial scarring, for which there is very little guidance in terms of damages for insurers. There are wide damages ranges for certain injuries, such as in mesothelioma claims. King’s Bench  judges have suggested a starting figure of £150,000 in damages, regardless of the fact the current Green Book damages bracket for meso­thelioma starts at £100,000. 

Insurers will be conscious of the potential arguments the Green Book gives only “guidelines” for personal injuries damages. However, the Northern Ireland insurance sector can look forward to greater clarity and certainty for insurers with the new edition of the Green Book. 


Tara McSorley is chair of the Forum of Insurance Lawyers Northern Ireland and legal director at Clyde & Co

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