Fianna Fáil Spokesperson on Finance Michael McGrath, has today introduced a Bill in Dáil Éireann that will increase the penalties for those found guilty of committing insurance fraud, and also forces those suspected of bringing a fraudulent claim to pay all the legal costs of the case.
Deputy McGrath commented, “Insurance fraud continues to be a major issue and is among the many reasons why insurance costs have skyrocketed for businesses and individuals across the country in recent times. Despite this, the government has failed to put in place any measures that would tackle the issue of fraud.
“Last week at the Oireachtas Finance Committee, we heard from Linda Murray of Huckleberry’s Den play centre in Navan. She and others have highlighted the plight of many businesses throughout the country with regard to spiralling insurance costs. Many of these businesses are facing closure and many others have already closed because of insurance.
“Insurance fraud not only costs the party against whom the claim has been made, but also costs us all through higher premiums. Those found guilty of insurance fraud can face a maximum of 10 years in prison and/or a fine of up to €100,000. Someone facing a summary conviction for insurance fraud can face a maximum of 12 months in prison and/or a fine of up to €3,000.
“This Bill will increase the maximum fine for a summary conviction to that of a Class A fine of €5,000. However, to get to the stage of defending a claim in the courts, a defendant or the insurance company must incur significant legal fees. These often go unpaid by the perpetrator of insurance fraud.
“This Bill states that, when a claim is dismissed because it is suspected to be fraudulent, the courts shall order the claimant to pay the legal fees of the defendant. This is in recognition of the fact that significant legal costs are incurred defending a fraudulent claim.
“Last year my colleague, Deputy Billy Kelleher, introduced a related Bill that passed Second Stage which, if enacted, would enable a judge to pass a report to the DPP where insurance fraud is suspected. We have also long been calling for the establishment of a dedicated insurance fraud unit in An Garda Síochána.
“For those involved in insurance fraud and those thinking of committing it, there seems to be no downside, no cost for the perpetrator. All the costs ultimately fall on the policyholder in the form of higher premiums. This issue has to be tackled and this Bill is a step in this direction”, concluded McGrath.