Tag: irish law

DPC finds DEASP has been unlawfully processing child benefit data

Since 2008 the Department of Employment Affairs and Social Protection (DEASP) has issued child benefit beneficiaries with “eligibility certificates” which are, in fact, forms demanding personal information about the children involved in order to prove that they are still entitled to receive payments. The certificates are part of the Department’s “control measures”, aimed at ensuring fraudulent claims for social welfare payments are detected and that payments are not being continued for people who are no longer eligible, for one reason or other.

Such control measures might, under certain circumstances, be an appropriate and prudent measure to detect fraud and ensure that taxpayer funds are correctly distributed. I was consulted, however, by a client who had been receiving these forms repeatedly for a number of years, despite no change in circumstances. (Note: my client is satisfied that non-identifying elements of this case are disclosed.)

The forms demanded that that the client provide the following information:

For each of your children aged between 5 and 18 years, please insert details overleaf of the school or college they attend including full school name, address and phone number of the school.
For children under 5 years old, please insert details overleaf of the doctor they attend or details of the playschool/créche they attend if applicable.

Initially, my client returned the forms. When they continued to arrive on an annual basis, my client wondered how the provision of this information was necessary, what it proved to DEASP and what they might do with the information to confirm entitlements. My client wondered whether this was an excessive request for personal information about children and whether DEASP was entitled to request it. The information provided in the forms sent by DEASP did not provide answers to any of these questions.

On querying this DEASP relied on various provisions of the Social Welfare Acts that regulate child benefit payments and in particular a provision that states that the Minister can require information to be furnished by a beneficiary where the Minister forms the opinion that the furnishing of that information would assist in deciding (among other things) whether a beneficiary is entitled to continue to receive child benefit.

My contention was that those provisions were not an adequate legal basis for the processing that was being carried out and that insufficient information was provided to beneficiaries about the use of the information obtained. DEASP did not accept this and so a complaint was made to the (then) Data Protection Commissioner. (This complaint was made, and dealt with, under the pre-GDPR rules established by the Data Protection Acts 1988 and 2003.)

Following a lengthy investigation and consideration of the complaint, the Commissioner has now issued a lengthy, detailed decision which finds:

DEASP’s stated rationale for processing the personal data involved is limited to a general description of policy objectives and control measures, and does not provide a detailed justification for the specific processing operations performed.
The forms issued by DEASP do not, of themselves, account for the necessity of the specific processing operations performed by the Department in this context.
The limited information supplied by DEASP regarding its processing is insufficient to conclude that such processing was necessary.
DEASP did not comply with the fairness principle because the Department selectively emphasised positive outcomes for child benefit recipients when describing the purposes of processing, which did not reflect the fact that the purpose of the processing was, to a substantial extent, the identification of persons who were no longer eligible to receive child benefit.
Because its information requests were mandatory and because of the types of information obtained, a significant duty of transparency fell on DEASP to explain the further processing which it intended to perform in relation to the information obtained.
DEASP should have provided at least information on its acknowledged “data-matching initiatives”, and specifically, information on the categories of personal data that may be processed in the course of data-matching initiatives, the purposes of processing for such data-matching and the identities of third party data controllers engaged in data-matching initiatives with DEASP.

The Commissioner notes the mandatory nature of the information requests and the fact that DEASP can suspend or terminate payments. In fact, DEASP repeatedly threatened to terminate my client’s payments and earlier this year, suddenly took the step of suspending the payments despite the fact that the Commissioner’s investigation was then at an advanced stage. Following objections, DEASP lifted the suspension pending the decision of the Commissioner.

The decision is very welcome and represents a significant challenge to the extensive and comprehensive data-gathering activities of DEASP and, indeed, other statutory bodies. It highlights the fact that the mere existence of a statutory provision or function is not sufficient to justify demands for personal data which go beyond that provision or which are not adequately explained or justified. While the decision concerns child benefit eligibility certificates in particular, it has relevance beyond those forms to many data-gathering activities of DEASP and other State bodies.

As mentioned, this is a pre-GDPR investigation and decision. The Commissioner did not refer to any intention to utilise the enforcement provisions in the pre-GDPR rules, but because DEASP continued to send out these forms and sent one to my client in 2019 (after the GDPR had come into force) that request for information by DEASP will now be considered by the (now) Commission under its GDPR complaint procedures. It is worth noting that the core data protection principles have not substantially changed, however, while the enforcement provisions have changed substantially.

Litigation disclosure of personal data

Photo © Convert GDPR https://www.convert.com/GDPR/

Litigation solicitors often request and disclose too much information about clients when representing them in court cases. The imminent data protection reforms in the GDPR are bringing data protection issues into focus on a daily basis, not least the routine things many businesses and professionals do and have always done which might not be acceptable under the GDPR or even existing data protection law.

Respecting privacy, and the GDPR, requires that we all consider and reconsider what personal data should be collected and what can or should be done with it. Solicitors owe a duty to their own clients, for example, not to unnecessarily disclose personal data.

What is the issue

This often arises when dealing with requests for information or documentation from “the other side” in a case. If you sue someone there is certain information you must provide the other side with, and some information they are entitled to ask for. I’m going to use the example of personal injury cases, as they are the most relevant in this context.

In those cases the injured party (the plaintiff) has to give certain basic information like their name, address, PPSN, details of special damages and negligence alleged. The person being sued (the defendant) can ask the plaintiff for some additional information such as about previous personal injuries, claims and treatments where relevant and, if asked, the plaintiff must answer. These questions are put in what is called a “notice for particulars”, a document sent by the solicitor for the (usually) insurance company defending the claim. If the plaintiff refuses to answer the notice with “replies to particulars”, the defendant can ask for a court order compelling the plaintiff to answer.

That does not, however, mean that all questions must be replied to. The purpose to particulars is so that the defendant knows what case they have to meet at trial and to prevent them being surprised with unexpected allegations. It is not a means of a defendant getting advance details of the evidence that will be presented at trial, nor is it an opportunity for a fishing expedition for information about the plaintiff. It is, however, often treated as just that and defendants often ask all sorts of questions about the plaintiff’s family and domestic circumstances, personal and employment history and medical affairs whether or not they have a bearing on the case.

The (non-data protection) law on particulars

Mr Justice Hogan delivered a significant judgment (Armstrong v. Moffatt) on replying to notices for particulars in 2013. The judgment provides a good run-through of the law on particulars but Hogan J was notably critical of the practices which had developed in recent years of defendants seeking a huge range of information, and of plaintiff solicitors going along with these requests.

Not least in personal injury cases, the particulars sought in many cases had reached something of an art form. Quite often no possible detail or dimension of a [claim] remained unexplored at the hands of pleaders who at times seemed to revel in this glorious new art form. It was by no means uncommon to find notices for particulars stretching to twenty or more paragraphs, often replete with individual sub-paragraphs. Most litigants (or, perhaps more accurately, their solicitors and junior counsel) simply yielded dutifully to these requests, as it was often more convenient and expedient to do so rather than to take a stand on principle. In retrospect, the courts should, perhaps, have been more prepared to strike out many of the pre-rehearsed requests as oppressive and, in some cases, as constituting quite simply an abuse of process … [M]any of the requests in this and similar cases are either irrelevant or not permissible in law as particulars are nonetheless steadfastly advanced shows that many pleaders have simply gone astray in their enthusiasm to interrogate every possible detail of their opponent’s claim.

While the judgment did not mention and was not based on data protection law it was, in effect, a call to action addressed to solicitors on both sides: stop requesting so much information in notices for particulars, and stop acquiescing to excessive requests.

Unfortunately, it has not been heeded. The practice certainly varies from solicitor to solicitor but some insurance defence solicitors continue to issue lengthy notices for particulars, often with very surprising questions about the plaintiff’s personal life and family circumstances that do not appear to have any bearing on the case. Moreover, judges have not always accepted arguments against providing replies to particulars on the basis of Hogan J’s judgment.

A similar issue arises in the context of voluntary discovery, which involves the handing over of full records rather than just replying to questions. I would hope that solicitors are generally more restrictive when it comes to discovery, but solicitor Dervila McGirr quite rightly criticises the reliance on discovery “on the usual terms”, particularly in relation to extensive requests for highly sensitive medical records, and the impact on client privacy. There should be little if any basis for operating “on the usual terms”. Each request for information or documentation should be considered on its own terms.

It is important to note that in these situations, a solicitor acts as the “agent” of her/his client. I won’t digress into the field of agency law but a solicitor acting as agent of the client has a certain amount of latitude to do things on behalf of a client with their authority (whether explicit or implied). Delivering replies to particulars is one of those things, but how far does a solicitor’s authority go? Surely not to hand over personal data wholesale. However, in personal injuries cases at least, the client must swear an affidavit of verification confirming the accuracy of the information in the replies to particulars so the client necessarily has to have reviewed what is in the document. You could, therefore, argue an express authority to hand over the information (after all, the client confirmed the contents), but does it end there?

Which is where data protection comes in

Quite simply, if a defendant is not entitled to certain information in the course of obtaining further and better particulars, what right does a plaintiff’s solicitor have to provide the information? The obligations of the Data Protection Acts (and the GDPR/Data Protection Bill) mean that a solicitor should consider whether the defendant is entitled to the particulars sought. If not, the information (which will often be sensitive personal data) should not be disclosed to the defendant.

A client may have reviewed the contents of replies to particulars and confirmed them in an affidavit of verification, but have they consented to the release of the personal data or expressly authorised it? Consent is notoriously problematic in data protection, and for sensitive personal data (which many replies to particulars in personal injuries cases are) it must be explicitly given. If a solicitor puts draft replies to particulars in front of a client, asks that they be checked for accuracy and that an affidavit of verification be sworn, at what point was the client given a clear explanation of the processing involved (the disclosure to the other side)? The key explanation should involve advice as to whether or not the client is required to disclose the particulars. And this is, I suspect, where many would fall into difficulty.

What is the consequence?

This issue does not appear to have been the subject of a judicial decision or complaint to the Data Protection Commissioner (yet), but this is true of many persistent issues in data protection.

A possible explanation is the lack of serious consequence to date. There has, possibly, been too much deference to exemptions and exceptions in the Data Protection Acts relating to litigation and connected services. And while the Acts (section 7), impose a duty of care to data subjects under the law of torts, the utility of that provision was almost entirely hollowed out by a High Court decision in 2013 (Collins v. FBD). Section 7 was never satisfactory and the Collins decision made it worse, requiring that a plaintiff had to show specific loss in order to claim damages – i.e. the fact that the duty of care owed to them was breached in some way alone was not enough to obtain compensation. Eoin O’Dell’s excellent paper on compensation for GDPR breaches expertly outlines the issues with Collins, forcefully concluding:

the decision … in Collins is quite simply wrong – as a matter of principle, as a matter of national law, and as a matter of European law

In addition, judges sometimes order that replies to particulars be given which should not be ordered – many plaintiff personal injuries solicitors will probably have had this experience in the past. While, under the Acts, this may cure data protection issues for the plaintiff’s solicitor (because there is now a legal obligation to disclose the personal data) the GDPR, again, changes the landscape.

Which is where the GDPR comes in

Mr Justice Frank Clarke (Chief Justice) has recently commented in a number of forums about the challenges the GDPR raises for the judiciary and the need for privacy training among judges. Future disputes about particulars and discovery are likely to involve increased reliance on data protection concerns and the GDPR when before the courts. All of this should mean a more restrictive disclosure regime than has often existed in Ireland, despite the decision in Armstrong v. Moffatt on particulars and the changes in relation to discovery outlined by McGirr.

In the context of voluntary particulars and discovery, while O’Dell points out that the decision in Collins would not survive further challenge, it will be made redundant by the GDPR which requires that someone whose rights under the Regulation have been infringed must be entitled to seek compensation for both material and non-material rights (section 112 of the Data Protection Bill 2018 purports to implement this).

It is difficult to see how a solicitor is fairly processing personal data by unnecessarily disclosing it in these circumstances. This has been the case for many years, but a key change with the GDPR is that breach of data protection rights will no longer be mere technical, regulatory breaches but actionable ones that could give rise to compensation.

And, legal provisions aside, there is a very obvious and natural objection that someone might have to sending out all manner of personal information (including information about other family members or cohabitees) to third parties where it is not necessary to do so. Defence solicitors need to be robustly challenged on notices for particulars, or plaintiff solicitors may find themselves struggling to justify the unnecessary disclosure of their client’s personal data to insurance companies.

Average personal injury awards did go up in 2014, not claims

For over a year now the Irish insurance industry has been spinning dramatic price hikes in car insurance as being the result of claims – those awful people injured in car accidents who dared to claim against insurance are the fault, along of course with their lawyers.

It is quite obvious that there are multiple factors at play in the car insurance market. New regulatory rules, bad investments, bad management and years of overly-aggressive competition are clearly the major factors now biting the industry. But it is far easier to blame lawyers, demonise claimants and pretend whiplash is an imaginary injury.

But two things have taken the wind out of the insurance industry spin: the Injuries Board using actual research and statistics to counter the allegations and the dramatic intervention of the Competition and Consumer Protection Commission.

One spin in particular, though, will not die: the suggestion that there was a huge jump in court injury awards from 2013 – 2015. On RTÉ’s Nine News last night (5 October 2016, from 1:43) Kevin Thompson, CEO of Insurance Ireland, made the claim again:

We’ve also seen a 33% increase in the level of awards in the Circuit Court from 2013 – 2015.

This is amazing. Injury awards suddenly up by one third! But this claim, often made by insurance industry spokespeople, raises two obvious questions: (1) why did this happen in the Circuit Court?; and (2) what happened between 2013 and 2015?

The answer is simple. In 2013, the Courts and Civil Law (Miscellaneous Provisions) Act 2013 was introduced. It, among other things, raised the jurisdiction of the Circuit Court, so that court could deal with some higher-value claims. So yes, average awards went up.

The District and Circuit Courts have upper limits on the compensation they can award and until 2014, when the law took effect, the maximum the Circuit Court could award was €38,092.14. That odd figure is £30,000 in old money, hinting that the limit had not been changed in a very long time. In fact, since the late 1990s many argued for an increase in jurisdiction for the District and Circuit Courts to address inflation and the changing nature of litigation. In 2010 I wrote that such a change was long overdue and would help to reduce legal costs. The government had introduced a law in 2002 to allow them to change jurisdiction limits but failed to do so, partly due to insurance industry lobbying.

Increasing the jurisdiction of the lower courts allows them to hear a range of cases that they are more than capable of dealing with, at a lower cost. So, increasing court jurisdiction limits should reduce legal costs.

The increase in Circuit Court jurisdiction in 2014 raised maximum personal injury awards by that court by €21,907.86 – around 57%. This is a significant increase and one which has an immediate impact on statistics, particularly average awards. There is no reason that a Circuit Court judge would award more than a High Court judge in a particular case, so there should be no award inflation. But the average Circuit Court injuries award will naturally increase. Likewise, at High Court level, the average award increases because the lower value awards up to €60,000 are taken out.

So, it is not at all surprising that there was an increase in Circuit Court compensation levels from 2013 to 2015 – the jurisdiction level increased 57% but the average award only 33%. Average award levels limited to one court jurisdiction are of little use in considering the overall levels of compensation awarded or general claims activity.

What the insurance industry does not say, and cannot say, is that this 33% was a result of overall compensation inflation.

HSE abolishes new national fee for calculating loss of earnings

hse Personal injuries compensation is usually assessed by the Injuries Board, though many claims end up in court afterward. Both the Injuries Board and the courts calculate compensation on the basis of general damages, a somewhat unscientific amount awarded for pain and suffering, and special damages, which are made up of specific expenses.

A common claim special damages claim in a personal injuries case is for loss of earnings. The injured party will get a certificate from their employer calculating what earnings were lost due to the injuries suffered and the certificate will be used as evidence to support their claim. Recently, the HSE started charging its own employees €123 for providing a certificate of loss of earnings. This was surprising as while providing the certificate involves some work for the employer, they should have the information readily available and providing it seems part of the ordinary obligations of an employer to an employee.

When I first came across the charge it I queried it with the HSE, who said it was a new standardised fee. I asked the Injuries Board if they would include such a fee in calculating special damages for a claim and they said they would not. So the injured party would either have to pay the fee themselves or risk not having an accurate loss of earnings claim.

Last week, the Injuries Board wrote to me to say that they were taking the issue up directly with the HSE.

In the meantime I had made a freedom of information request to the HSE about the introduction of the fee, with an interesting result. It appears that the HSE began to consider introducing this standardised fee in March 2013. They thought about it at a number of meetings in 2013/2014 and tax advice was taken which confirmed that vat would apply to the fee. They went ahead and introduced it.

There was a gap in documentation after 2014 until 21 September 2016 (two weeks ago), when the general manager of national payroll for the HSE sent an internal email as follows:

Following a review of the charge for Loss of Earnings calculations, it has now been agreed to abolish same effective immediately.

It does seem odd that a process was engaged in over two years to discuss and decide on the national standardised fee, but the review of it which lead to its abolition appears to have come out of nowhere and the only document about it is an email confirming the decision.

But nevertheless, the abolition of the fee is welcome (although, the email says that any existing charges which have been billed remain). Fees of this nature are unnecessary hidden costs in personal injuries claims. When the insurance industry complains about legal costs, it never breaks down the costs and it is worth drawing some attention to the State costs involved.

Insurer spin on compensation working, despite evidence

"Claim? But what about our international reputation!" — “Claim? But what about our international reputation!”

The insurance industry is taking advantage of the current interregnum to step up its media campaign against paying compensation to injured parties. This is a concerted campaign with almost daily media reports of the damage allegedly high compensation levels and legal costs are doing to the insurance industry, the economy and even Ireland’s foreign direct investment. It appears to be working, despite all evidence suggesting that other factors are causing premiums to increase.

Today is the turn of the Small Firms Association, who claim that compensation “culture” is now “out of control”. According to the SFA:

Since 2011 insurance costs have risen by 30 per cent, the association said, with a large part of the jump occurring within the past 12 months.

What you won’t find anywhere, however, is evidence to suggest that this huge hike in premiums has been caused by compensation, or how “compensation culture” is “out of control”. On the contrary, all indications are that the main reasons for insurance increases have nothing to do with compensation. Industry spin is having the desired effect, however, with even Minister for Jobs, Enterprise and Innovation appearing recently to come around to the industry point of view.

I recently requested documents from the Department of Jobs, Enterprise and Innovation on representations by the insurance industry and in the documents released were records relating to two industry meetings where the Minister was lobbied on insurance costs.

The first meeting was with executives from Axa and was requested through Fine Gael Councillor Anthony Lavin, who is also a customer care manager with Axa. It took place on 8 October 2015. A further meeting took place with Insurance Ireland, the industry body, and was arranged through PR consultants.

The Minister’s briefing materials included a National Competitiveness Council report on insurance costs. Recent newspaper articles have referred to this report and its reference to legal costs supposedly being “sticky”, but generally do not point out other important aspects of the report.

The industry frequently says motor claim awards are too high but “64% of PIAB [Injuires Board] awards for motor injury claims are for <€20,000 … the cost of processing a claim through the PIAB is at historically low levels”.
The review of the book of quantum “could result in higher costs, and ultimately higher premiums.”
Legal costs “proved extremely sticky” apart from “a brief period in 2013”. The evidence for these comments is not referred to.

Minutes of the meeting record that the Minister made a number of counter arguments to Axa on compensation concerns, for example that medical negligence cases skewed comparisons of compensation payments and that the level of awards by PIAB was “fairly consistent” from 2010-2014, with the majority of awards being under €20,000. He said it would be helpful if the industry provided more information on “untracked cases”. These are mostly cases that are settled between claimants and insurers with the result that the State agencies do not learn what the outcome is.

View this document on Scribd

Given that Axa and the industry are seeking a number of reforms that would require them to be given more statistical information by PIAB and the Courts Service, it is peculiar that the industry continues to be remarkably reticent on providing details on untracked cases. The note of this meeting states that Axa agreed to “work with Insurance Ireland with a view to supplying” this type of data.

Axa appeared to focus on what were effectively four case studies of recent court cases where the awards exceeded what the insurers had valued the cases at. Axa were not, in fact, the insurer in any of these cases. A limited number of court awards are not, of course, representative of most claims and indeed the note of the meeting between the Minister and Insurance Ireland on 6 November 2015 stats that about 20% of claims go to PIAB, of which about 40% are rejected and settled and “[a] small number of cases are finalised by the Courts.”

View this document on Scribd

Axa, along with many other parties, has made submissions to DJEI on the operation and implementation of the PIAB legislation, which has been ongoing for some time. A significant suggestion is that the limitation period for personal injury claims be reduced to one year (at the moment the limitation period is two years). This proposal was already considered when the legislation was introduce to establish PIAB and the government decided against a one year limitation period.

It was felt at the time that such a short limitation period would exclude many valid claims or that it would drive people into dealing with lawyers and claims at a time when they might still be receiving treatment or in recovery. A one year limitation period would be extraordinarily restrictive, its only aim and affect being to reduce the liabilities of insurance companies by excluding valid, genuine claims.

View this document on Scribd

A further surprising proposal is to allow PIAB to award “some form of Legal fees to lawyers that will allow for a higher acceptance rate of awards.” The insurance industry’s objective in having PIAB established was to drive a wedge between injured parties and solicitors, who might provide claimants with independent, expert advice. This was to be achieved by the law providing that no legal fees would be awarded by PIAB (except in limited situations, and even then in very small amounts). The industry repeatedly claims that, despite PIAB being intended to be a “lawyer free zone”, over 90% of claimants are represented by solicitors (again no evidence is publicly available to support this claim). Axa’s proposal appears to accept that the right of people to seek professional representation is still exercised in most cases, despite the cost implication at present.

The above documents and some others are available here on Scribd. They suggest that government departments and the National Competitive Council do not necessarily share the views of the industry and are aware of other factors affecting the insurance industry.

However, since the Minister’s meetings with the industry late last year, during which he did not appear to accept what was being said on compensation and PIAB at face value, he has since sought “judicial buy-in” for the as-yet incomplete revisions to the book of quantum and makes the same points on insurance costs put forward by industry representatives.

The bulk of media reporting and commentary on insurance premium hikes remains focused on and obsessed with compensation, with little being said or asked about Solvency II, RSA, FBD and other industry-specific issues.

Insurers still spinning against the facts on personal injury claims

swear-to-spin-the-truth_resize Rarely a week goes by without more insurance industry spin on personal injury claims, particularly whiplash claims. The industry now takes any opportunity to blame personal injury claims for their woes, even in the face of facts which indicate other causes.

Inevitably, the Irish insurance industry is seeking reforms similar to those announced late last year in the UK, including a ban on claims for “minor” whiplash injuries.

AIG, a massive multinational insurer that was in recent years more often in the news for needing an initial $85 billion bailout from the American government, wants a ban to be considered here. Their general manager for Ireland, Declan O’Rourke, told the Irish Times:

Ireland should follow the UK’s lead in considering a ban on whiplash, to flush out fraudulent claims. The UK is considering a position whereby whiplash victims would have their medical expenses and loss of earnings compensated by insurers in a move that it believes could save the sector £1 billion a year and reduce premium costs.

Mr O’Rourke does not go into detail about why a whole category of claim should be banned to weed out the supposed problem of fraudulent claims, but the insurance industry often suggests that all whiplash claims are effectively fraudulent. This is in spite of long-standing medical evidence and opinion. A call for a ban on whiplash claim won’t go far in Ireland, where it would likely be unconstitutional, but other reforms will be demanded. Indeed, it appears AIG has a wishlist of things it would like an Irish government to do, quite a turn-around for a company that had to go cap in hand to the Federal Reserve in 2008 to avoid oblivion. More recently, its Irish operations benefitted from assistance from the Irish taxpayer. One might be inclined to wonder whether any losses or difficulties at AIG could have causes beyond the cost of claims.

Yesterday, Fiona Muldoon of FBD was a guest on Morning Ireland, taking another opportunity to bemoan the cost of claims and the legal system despite FBD’s results telling a different story. FBD has quite reasonably been described as “beleaguered” and has suffered from a range of difficulties which have nothing to do with personal injury claims.

The Times (Ireland edition) covered FBD’s latest results with the headline “Insurance sector too competitive, FBD says” [paywalled]. While the real problem for the industry is in the headline, the article nevertheless begins:

Over-inflated whiplash claims and too much competition between insurers were among the many factors to blame for FBD’s loss-making performance this year, its chief executive said.

The cost of allegedly “over-inflated” whiplash claims is a crutch that the industry repeatedly leans on when in difficulty, while the truth for FBD is that:

Most of last year’s losses stemmed from measures to bolster its capital reserves and €11 million in restructuring costs.

The article also points out that FBD experienced a 9% fall in premium volumes last year – ie. they lost customers. Ms Muldoon continues:

A number of factors had made the Irish insurance sector unprofitable between 2012 and 2014, including too much competition driving down premiums, Ms Muldoon said. “The market in Ireland is very fractured, which meant that companies were competing aggressively against each other and in hindsight they were not charging enough.”

So. Insurance companies have had financial difficulties because they have had to bolster reserves, lost customers and have not charged enough for years. But ask any spokesperson for the insurers about their problems and it’s not long before the cost of claims is front and centre.

This is a remarkable feature of articles on the insurance industry in Ireland over the past year: reports on financial results cover these internal difficulties and challenges faced by the industry which are obviously having a negative impact on premiums. Figures are available to explain the impact on insurers but not, it seems, to explain their complaints about the cost of claims and the legal system.

The reality is that the industry does not have any statistics or figures about personal injury claims that it is willing to make public. Even the Injuries Board, effectively a creature of the industry, has criticised the failure to support allegations about claims, as well as their failure to explain where there premium income is going. The number of personal injury court claims fell in 2014 and the Injuries Board has highlighted that there is a €1 billion difference between the premium income of Irish insurers and published awards.

It’s time for insurers to accept that, this time around, their losses are down to themselves and not due to paying out on claims (which is, of course, what they exist to do).

Court reporting and absolute privilege from defamation claims

Late last year, Attorney General Maire Whelan called for a review of Irish defamation law in so far as it affects court reporters.

[Court reporters] should not have to fear a “simple oversight, omission or error” in reporting court proceedings exposes them to risks of litigation, or claims in damages, with consequent risks to their livelihood. There should be at least a debate, and consideration, of enshrining into Irish law a provision that no report of court proceedings should be actionable in defamation unless there is proof of “malice”, Ms Whelan said.

A recent defamation claim against the Irish Examiner relating to reports published on that newspaper’s website raised precisely this issue (Philpott v. Irish Examiner Limited [2016] IEHC 62). The judgment by Mr Justice Max Barrett delivered last week adds some interesting commentary to the topic.

Section 33 of the Defamation Act 2009 allows for an application to be made to a court prohibiting the publication or further publication of a statement if it is defamatory and there would be no defence available justifying its publication. The relevant defence here is of court reporting which, if done properly, is absolutely privileged.

In this case the plaintiff had been CEO of a healthcare organisation in Cork and, apparently due to his view of shortcomings in the operation of the organisation, his employment ceased. He instituted employment law proceedings which were eventually settled. However, he objected to two reports carried in the Irish Examiner (article 1; article 2) relating to his employment law proceedings and sought an order under section 33 prohibiting the further publication of two relevant articles on the Irish Examiner website. This required him to satisfy the court of both requirements of section 33, mentioned above.

Barrett J noted that the barristers in the case could not identify any previous Irish case-law that examined the nature of the test to be applied under section 33 but concluded:

[I]t seems to the court that the tapestry of law woven by the Oireachtas does not invariably or even generally require additional embroidery by the courts. The Act of 2009 posits simply that there are three criteria which must be satisfied before an order can issue under s.33, [namely]:

(1) is the statement complained of defamatory?

(2) does the defendant have a defence to the claim of defamation?

(3) is that defence reasonably likely to succeed?

Barrett J quoted both articles objected to in full. In relation to the first one, the key “error” complained of was that something asserted by one party in the proceedings was reported as fact (ie. an allegation was represented in the article as fact). However, Barrett J held that erroneous statement did not injure the plaintiff’s reputation. He referred to other elements of the report complained of and “struggle[d] to see that there is much divergence of real substance” between the article and the relevant elements of the Circuit Court judgment that it was reporting on.

In fact, Barrett J felt that the manner in which the complaints regarding the first article was put forward amounted to a “dissection” which “represents a highly unnatural manner of reading.” He posed the issue as follows:

What are the key learnings that someone viewing the … article would likely glean? First, that there was an employment-related dispute between Mr Philpott and his onetime employers. Second, that Mr Philpott had been dismissed, ostensibly because of some sort of difficulties between him and other staff. Third, that Mr Philpott had made various allegations about how Marymount was run – and, perhaps implicitly, that this might have been the real reason for his dismissal. Fourth, that a Circuit Court judge had gone through Mr Philpott’s allegations in some detail and did not find them credible, though he did not doubt that they were sincerely made. In short, the reader would have garnered the truth of matters, as this Court did on its first reading of the article. Anyone who elected to run a fine tooth-comb over every element of the article would have ended up with the same understanding.

In relation to the second article, Barrett J was “mystified” by the plaintiff’s concerns.

The whole thrust of the article is that peace has broken out between the parties, that all has been resolved, that Marymount wishes Mr Philpott well, that a line has been drawn under past events and that everybody is now moving on.

He went on to make some important points about court reporting.

Court reports are not just of interest to the public; they meet a great public interest. In a liberal democracy that prizes individual freedoms, all branches of government are rightly subject to the scrutiny of an ever-watchful public. Reporters perform an essential role in ensuring that members of the public learn of what is being done in their courts and why … This is so important a task that – except insofar as is necessary to ensure that the right of every citizen to her or his good name is protected and capable of vindication – the media must go relatively unconstrained in their efforts. Our individual freedoms are more fully assured in the collective freedom of journalists to discharge the role so eloquently identified for them by the late President Kennedy, in a speech to the American Newspaper Publishers Association back in 1961, being “not primarily to amuse and entertain, not to emphasise the trivial and the sentimental, not to simply ‘give the public what it wants’ – but to inform, to arouse, to reflect, to state our dangers and our opportunities, to indicate our crises and our choices, to lead, mould, educate and sometimes even anger public opinion”, and, it might be added, not just to report, but to comment.

There had also been some objection by the plaintiff that certain aspects of the his Circuit Court case were not reported at all. Barrett J said:

To the extent that it is suggested that a court reporter needs to be present for any, let alone every, aspect of court proceedings on which s/he reports, this proposition is entirely rejected by this Court.

Reporters do not have a free hand to report on cases they have not attended: principles have already been developed by the courts outlining that a report must be fair and accurate to benefit from a defence to a defamation claim. A fair and accurate report on a written judgment from a court could not give rise to a claim for damages, for example, even though the reporter might not have attended any of the hearings.

Ultimately, Barrett J held that neither of the articles were defamatory, that the Irish Examiner would have a full defence to any claim of defamation on the basis of absolute privilege and that such a defence would be likely to succeed at trial. Therefore, all of the plaintiff’s claims were dismissed.

The case is an interesting, up-to-date statement of the law on court reporting in Ireland and obviously some of the comments made in the judgment chime with the Attorney General’s views. It may be that the judgment would hold back the tide of defamation claims against publishers somewhat and might alleviate the need for further legislation on the topic (subject to any appeal, of course).

Why the delay and confusion on domestic violence privacy?

The proposed Domestic Violence Bill appears to have made little progress since Frances Fitzgerald published heads in July. The Bill would have closed a glaring oversight in Irish domestic violence law which I have written about before. As Irish law stands, domestic violence orders are granted in private court sittings but breaches are prosecuted in open court with no reporting restrictions. With a general election looming the Bill is unlikely to be passed by the current Oireachtas, raising the likely prospect that this damaging loophole will persist for years to come.

John Burns had an interesting piece in today’s Sunday Times on privacy and reporting which mentioned a Press Ombudsman ruling that starkly highlighted this loophole.

[T]he Sligo Weekender … reported on a case before the District Court in which a man was charged over an altercation with his estranged partner. The newspaper named the couple and said they had two children, whose ages were given. No reporting restrictions appear to have been imposed by the Judge, and the children featured in the evidence.

The case involved a prosecution for the breach of a safety order. Like all family law cases, applications for safety orders are heard in private court sessions with only the parties and their lawyers present, along with the judge and court clerk. The order itself, if granted, is served on the respondent and the local Gardaí, but no-one else finds out about it. However, breach of a safety order is a criminal offence and is prosecuted in open court.

The mother in the Sligo case wrote a letter to the Sligo Weekender saying that

printing both parents’ names and the children’s ages was the same as printing the children’s names.

The Press Ombudsman upheld two grounds of her complaint: that it breached the Code of Practice in relation to privacy and the rights of children.

An account of the court proceedings could have been published in the public interest and at the same time the right to privacy of the children could have been protected. By naming the parents of the children and giving their ages this did not happen. The newspaper in its defence said that the judge had not imposed any restrictions on court reporting. However it is my understanding that the protection of children applies in all instances and that there is no requirement on the judge to draw this to the attention of any journalist present in court …

By publishing the names of the children’s parents and their ages the newspaper failed to have regard for the vulnerability of the children. The Court and Civil Law (Miscellaneous Provisions) Act 2013 permits journalists to attend and report on family and child law proceedings provided the anonymity of any children involved is protected. In the report in the Sligo Weekender the anonymity of the children was not protected and therefore there was a clear breach of [the Code]. It is not my function as Press Ombudsman to determine if the 2013 Act was breached, my function is only to make a decision on any breach of the Code of Practice.

This analysis is problematic as the understanding referred to in relation to the protection of children is unclear. It may relate to the later reference to the 2013 Act, but that legislation deals with reporting on family and child law proceedings. The prosecution of a breach of a safety order involves criminal proceedings, not family or child law proceedings (despite the fact that the order itself originates in family law proceedings). The Ombudsman rightly states that it is not his function to make a determination on the 2013 Act, only the Code of Practice, but the overlap and conflict between the Code and ordinary court legislation is unhelpful and creates ambiguity.

While it is not uncommon for judges to make reporting restrictions in cases of this nature, there is no legal basis for doing so and I expect that any such restrictions could be successfully challenged. Indeed, the Ombudsman’s comments protect only the right to privacy of the children and not their mother. Local newspapers, meanwhile, tend to treat such cases sensitively and sometimes publish anonymised accounts of proceedings or do not publish a report at all.

We now have a totally unacceptable situation where there is specific legislation which addresses domestic violence and court reporting of proceedings generally, both of which permit reporting of cases of this nature. The only redress available to a victim wishing to preserve their privacy is to make an after-the-fact complaint under the non-statutory code of a self-regulating press. If a similar complaint were to arise again or be appealed to the Press Council the outcome is not certain. After all, the arguments made by the Sligo Weekender in this case were, on the basis of current law, correct.

There is an argument for publicising domestic violence cases as the lack of coverage of domestic violence generally in Ireland tends to distort public perception of the true scope of the problem. However, the decision as to whether or not the parties should be identified publicly should, in my view, always remain with the victims, as is the case with sexual offences. The reality of domestic violence is that the victims might often take a considerable time to both realise what is happening and to seek help. There are legal options available under the Domestic Violence Act with varying consequences and victims should always be encouraged to avail of them. However, the fact that breach of a domestic violence order can result in a victim’s deeply personal circumstances being fully reported on leads to a natural hesitance on the part of victims to push prosecutions and, sometimes, to even apply for a domestic violence order to begin with.

The change needed to the law is minor and uncontroversial. The slow pace of introducing it is, perhaps, just another symptom of the way in which legislative reforms are made in Ireland. This reporting loophole could easily and more appropriately have been closed by including a provision in the 2013 Miscellaneous Provisions Act but was instead put on the long finger of a consolidated act.

Undisclosed advertorial in blogs and social media

It is commonly misconceived that blogging and social media are regulation-free publishing forums. In fact, most of the laws that apply to traditional publishers apply equally to blogs and, sometimes, social media posts. Particularly important is the prohibition on undisclosed paid promotion in editorial content, also known as “advertorial” or “surreptitious advertising”.

Readers will be familiar with advertorial content in printed publications: it is usually surrounded by a border that marks it apart from proper editorial content and is headed by phrases like “Commercial Feature” or “Advertisement”. Whatever method is used by the publisher to differentiate it from other content, it is usually clear that someone has paid for it to appear.

Marking such content apart is good, ethical editorial practice in the interests of consumer protection. The Advertising Standards Authority of Ireland code of standards requires this:

Advertisement promotions should be designed and presented in such a way that they can easily be distinguished from editorial material.

The ASAI is an industry-run, self regulatory body and can only impose sanctions on its own members. It is sometimes accused of being toothless but most major companies and advertisers tend to comply with its rulings. However, because it is an industry body not backed by legislation and which can impose sanctions on members only, it is commonly believed that there is no specific legal prohibition on this conduct. An article in the Irish Independent earlier this week said:

There are no strict guidelines for bloggers and influencers when featuring sponsored content, but according to the Advertising Standards Authority of Ireland, sponsored online content “must clearly state that the material is a marketing communication”.

This is not the case, failing to identify paid editorial content is a criminal offence.

The relevant law is section 55(1)(q) of the Consumer Protection Act 2007 which states that, among other practices, a trader shall not “use editorial content in the media to promote a product (if a trader has paid for that promotion) if it is not made clear that the promotion is a paid promotion”.

The Consumer Protection Act implements the European Union Unfair Commercial Practices Directive which categorises this type of advertising as conduct that “shall in all circumstances be regarded as unfair“. This means that it is “blacklisted”: no case-by-case assessment is necessary. (Surreptitious advertising on television is prohibited elsewhere by the Television Without Frontiers Directive.) It might not be sufficient to merely identify advertorial with a simple phrase or logo: the Hungarian Competition Authority found that editorial content which included a slogan “Sponsored by Vodafone” was not enough to identify the nature of the arrangement between the publisher and the advertiser.

The prohibtion applies to the “media”, which is not defined but it appears widely accepted that this includes blogs and even social media accounts. In the UK, for example, the then Office of Fair Trading carried out a targeted campaign some years ago requiring PR companies and celebrities to be transparent about their endorsements. The basis of this clamp down on undisclosed advertising was the UK equivalent of section 55 of the Consumer Protection Act.

The definition of “trader” in the Consumer Protection Act is wide enough to cover both the advertiser and the publisher/blogger and indeed some enforcement action in other Member States has been against both parties. In Ireland, the Competition and Consumer Protection Commission (formerly the National Consumer Agency) can prosecute breaches.

The penalties include a fine of up to €4,000 on summary conviction (or €60,000 on indictment) and/or jail. The Act provides for increased fines on subsequent conviction and daily fines if the conduct continues after conviction. The Irish courts tend not to impose significant fines for consumer law breaches of this nature and anyone prosecuted for such an offence in Ireland is likely to face a fine in the hundreds of euros if convicted or could benefit from an alternative to conviction (certainly for a first offence). Consumers can also bring an action for damages, though it might be difficult to establish loss.

It seems unlikely that the Commission will become active in this area unless it receives complaints. However, anyone can apply directly to the Circuit Court or the High Court for an order to stop someone who is in contravention of the prohibition, perhaps making private enforcement by competitors more likely than by the Commission.

Is the Law Society trying to regulate blogs?

Restrictive rules on advertising by solicitors contain important exemptions to protect the right of solicitors to comment on legal and other issues. Is the Law Society interpreting the rules in a way would restrict those exemptions and increase their oversight of comment by solicitors?

Advertising by solicitors is very tightly restricted by the law and regulated by the Law Society of Ireland. I have written about some of the restrictions before. Most of the rules regulate the tone of advertising; what might be termed “ambulance chasing” through advertising, for example, is not possible in Ireland. None of the UK-style personal injury ads you might see on daytime television are possible in Ireland. Even this, quite mild and professional, form of ad would most likely result in trouble for an Irish solicitor daring to upload it.

The Irish rules may or may not be a good way to regulate advertising by lawyers. They do, at the very least, clash with the demand that the professions be more competitive. But the rules do recognise a very important exemption: comment. Exemptions are included in the Solicitors Advertising Regulations that should ensure no overreach in their application that would regulate or prohibit genuine comment.

The Regulations only apply to an “advertisement”, defined as being almost any type of communication “which is intended to publicise or otherwise promote a solicitor in relation to the solicitor’s practice” but “excluding a communication which is primarily intended to give information on the law”. So, a communication must be both intended to promote a solicitor and not be primarily intended to give information on the law for the Regulations to apply.

This is quite a large exemption and obviously seeks to make a distinction between traditional advertising and, for example, news updates or comment. If a communication by a solicitor is primarily intended to give information on the law it is not an advertisement, is not governed by the extensive rules and restrictions contained in the Regulations and, importantly, is not subject to oversight by the Law Society. That oversight is significant: a breach of the Regulations is a disciplinary matter which can potentially have serious consequences for the solicitor involved.

One catch-all provision in the Regulations, for example, prohibits an advertisement which is likely to bring the solicitors’ profession into disrepute. It is quite difficult to know precisely what is covered by that prohibition (the Law Society does not publish decisions made under the Regulations) but it is quite easy to envisage an individual or organisation who dislikes a communication from someone who happens to be a solicitor making a complaint to the Society under this heading of the Regulations.

Last Friday the Law Society published a surprising practice note on advertising. The headine refers to legal advice columns, so you might think it applies only to regular pieces in local papers where readers send in questions, for example. It suggests that where the solicitor is paying to have the column appear or is simply reproducing the content, the exemption does not apply and the column might be an advertisement. This is fair enough: such a column should be identified as advertorial or a commercial feature by the publisher. In fact, paying for editorial content to appear in a newspaper without making it clear to readers that it is a paid feature is a criminal offence for all businesses, not just solicitors.

However, the practice note makes a number of significant leaps when interpreting the Regulations. It refers to an exemption “set down in regulation 12” and refers to the contents of regulation 12 as being a test. In fact, the exemption is contained in the definition of “advertisement” in regulation 2(a). Regulation 12(a) adds to or gives examples of the exemption, it does not limit it. Paragraphs (b) and (c) do limit the exemption by clarifying that the distribution of free legal books may, for example, constitute advertising even though the publication might be information on the law.

The danger in this practice note, which one must assume the Law Society will apply in interpreting the Regulations, is that it sets a far more restrictive scope to the comment exemption in the Regulations. The paid advice column is not a difficulty, but many solicitors now publish blogs, for example, and some pay to do so. Many solicitors have websites which may constitute advertising in their entirety or may include information on the law but either way are likely to be paid for by the solicitor.

Where an article does not satisfy this test, that is, if it has been paid for by or on behalf of the solicitor, or where it has enjoyed repeated publication, the article is subject to the regulations in the normal way.

I do not accept this. Rather, the article might be subject to the Regulations. This blog is published using WordPress.com who I pay for mapping a domain name to it. Is it a series of legal articles written by me where part of the space in which it is published is paid for by me? Possibly, depending on your view of domain name mapping to a free blogging platform and whether the former constitutes “space” in which the blog is published. Is it an advertisement? Certainly not. It is not intended to be and it constitutes information on the law.

Regulation 12 is not a “test” of whether or not a communication by a solicitor is commercial or non-commercial. The test is in the definition of “advertisement” itself. The practice note is, perhaps inadvertently, further evidence of how the the Regulations are out of date. These anachronistic advertising rules do not appropriately accommodate or regulate blogging, social media or other contemporary means of communication.

The Regulations are already the subject of infringement proceedings by the European Commission who allege that they breach the Services Directive, which required that Member States ease restrictions on advertising by professionals. Despite this, the Law Society has recently been publishing practice notes which reinforce the existing Regulations and present to solicitors an interpretation of them more restrictive than the Regulations themselves. Complete reform of the the Regulations is long overdue.