The Government will hold a referendum to override judges’ discretion in the awarding of compensation claims if they do not drastically reduce whiplash and soft injuries damages in less than two years.

Days after it was revealed the average whiplash claim in this country is €20,000, the Junior Minister for financial services and insurance, Michael D’Arcy, said unless judges recalibrate compensation claims for whiplash injuries downwards, the Government will intervene.

“If the judges don’t, then the matter will have to be reviewed by the Oireachtas,” said Mr D’Arcy, who admitted that there is a question regarding the constitutionality of the Oireachtas overriding judicial discretion by fixing awards in certain civil law matters.

Mr D’Arcy said that he valued judicial discretion and did not want to go down the road of criticising individual judges, adding that “some judges are more generous than others”.

“If a referendum is required, we will go with a referendum so that the Oireachtas does have the legal authority to set awards,” he warned.

Earlier this week, figures from the Personal Injuries Assessment Board (PIAB) revealed that the average award for a whiplash injury was just short of €20,000, around five times the average payout for whiplash in England and Wales.

The figures echoed similar data contained in the final report of the Personal Injuries Commission (PIC), chaired by former High Court president Mr Justice Nicholas Kearns.

Mr D’Arcy, who said the Government would review the jurisdiction of the civil courts amid fears that the raising of the limits by former justice minister Alan Shatter may be inflating awards, said he was adopting a carrot-and-stick approach with judges.

“It has been put to me by some people that there are some judges who operate with no regard for the guidelines. That has to stop. If it doesn’t happen in the manner we think and believe it should by the judiciary in the next 15 months or so, the Oireachtas is willing to intervene,” he said.

“I don’t want to end up in a row with the judiciary, the insurance industry or the legal world. But between all three, we have the most expensive awards in the world.”

One of the next major issues that will have to be tackled by the judiciary is the recalibration of awards.

Earlier this year, the PIC recommended that judges compile new guidelines to greatly increase levels of consistency, increase the early resolution of claims, reduce costs and provide a “much better-informed PIAB process”.

However, this process cannot begin until legislation allowing for the setting-up of a new Judicial Council is introduced.

The PIC has recommended the Law Reform Commission examine the possibility of developing constitutionally sound legislation to delimit or cap the amount of damages which a court may award – at least in respect of some or all categories of personal injuries.

The cost of motor insurance has dropped by about 8pc over the past 12 months.

However, motor premiums increased by 11pc and 30pc in 2014 and 2015 respectively, followed by 12pc in 2016.

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