Page last updated at 08:59 GMT, Wednesday, 8 July 2009 09:59 UK

Watchdog warns on 'compo' claims

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Levels of compensation are twice those in England and Wales, says the Audit Office

More than half of all money paid out on compensation claims in Northern Ireland is going towards legal bills, a public spending watchdog has revealed.

£33m was paid out in the 10 years leading up to April 2008. £17m went to solicitors and £15m to claimants.

The Northern Ireland Audit Office said levels of compensation for victims were twice those in England and Wales.

A moderately severe ankle injury would produce NI compensation of £18,000 as opposed to £7,625 in England and Wales.

In his latest Audit Office report, comptroller and auditor general John Dowdall said the number of new claims had reduced by half over the last 10 years but the average cost of a successful action increased by more than four times the rate of inflation.

Assessment

The increase in costs was blamed on factors beyond the department's control.

"The reason for the higher payouts in Northern Ireland was because assessment was carried out by juries. When the practice was discontinued the differential was maintained under judicial guidelines," Mr Dowdall said.

Changes to fees for lawyers has affected the sum the department has had to pay out for the claimant's legal costs.

Payments to their solicitors were £1m in 2007/08 and, on average, have risen by more than four times the rate of inflation over the last decade.

"We recommend that the Central Claims Unit remains alert to the upward trend in the cost of personal injury claims and continues to review its approach to minimising the effect of this trend on the public purse," Mr Dowdall said.

The Department for Regional Development pays for its own legal advice provided by the Department of Finance and Personnel.

This cost £750,000 in 2007/08, an increase on average of twice the rate of inflation since 1998.

SDLP MLA and Public Accounts Committee member John Dallat said the figures were unacceptable.

"The department is losing out and so is the public. The amount of money available for road maintenance has dropped and that has its own implications in terms of road safety," he said.

Mr Dallat said historically claims in Northern Ireland were set by juries and the trend has been for high levels of compensation.

But he claimed that frequently the Department did not have the data to resist the claim.

'Reasonable'

Limavady solicitor Peter Jack said the compensation levels in Northern Ireland were reasonable.

"I can't possibly be responsible for the level of costs in England and Wales which I feel have not kept up with the times," he said.

"If the judges feel that these compensation levels are too high, believe me they will be cutting them down.

"It is a very rare case indeed that gets £18,000 to £20,000 for a tripping case. An injury is an injury ... I don't see why the level of compensation should be any less."



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