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Dáil Éireann - Volume 40 - 12 November, 1931

Road Traffic Bill, 1931—Committee Stage (Resumed).

SECTION 50

Question again proposed—“That Section 50 stand part of the Bill.”

Mr. Lemass: We were discussing yesterday, when the debate was adjourned, the proposal for compulsory third party insurance which is contained in this Bill, and certain difficulties which the Bill did not meet were referred to. The principal difficulty that arises in consequence of the scheme of insurance embodied in the Bill is the possibility of being denied insurance by insurance companies and consequently being deprived of his right to drive a car. The Minister and. I think, Deputy Myles stated that in their opinion anybody who was denied insurance by an insurance company should not be allowed to drive a car. In the majority of cases that is probably correct, but we have got to face up to the fact, if we are going to [1361] allow that position to be created we are, as Mr. Duff said in his addendum to the inter-departmental committee's report delegating to the insurance companies the power at present exercised through the court to suspend driving licences on statutory grounds, with this difference, that whereas a licence would be suspended by the court after a judicial examination and a public submission of the reasons a licence may, in fact, be suspended by an insurance company which would be under no obligation to state these reasons at all.

Cases have been known, one has been referred to by Deputy Sir James Craig, of drivers being denied insurance because they became involved in accidents for which they were not to blame. As I explained, insurance companies have a system by which they obviate the possibility of wasting their funds in cases in the court by paying the costs of their own clients and not arguing between themselves the question of negligence. That does mean that a person whose blamelessness might be established if the case went into court has not the opportunity given him of clearing his reputation as a driver. He finds, when he comes to renew his insurance because of the heavy outlay an insurance company had to meet as a result of the accident, that he is refused his policy.

That applies particularly in the case of buses. We have been discussing the case of private cars up to the present, but there are very special circumstances existing in relation to cmnibuses. I think I could fairly correctly say that the present position is that no insurance company wants to take a risk of covering any omnibus company. I am sure that there are Deputies in the House who know the difficulty that the owners of omnibuses have had to contend with in trying to get insurance cover. I got the other day a letter from the proprietor of an omnibus service in the city from which I would like to read an extract:—

“Here again is my own case—for the year 1930/1931 I had policies (3rd party) for my 4 vehicles, and [1362] the total premiums paid to the Insurance Company totalled £200— in all cases and for every single claim. I myself was liable under the policies for the first £25 no matter what the amount of any single claim was. In the year given I paid out £200, but did not cost the Insurance Co. one single penny. I had a few trifling claims falling under the £25 clause which I had to meet out of my own pocket and these did not exceed £15! Do you think that I got any sort of reasonable treatment by the Insurance Co. when the renewals fell due? They simply indicated that the premiums were increased by the equivalent of 100 per cent., so that what I paid £200 for last year would now cost me £400 and that if I didn't like it I could go where I liked with my bus insurances.”

I know that the experience of that individual bus owner is not uncommon and that other bus owners have had similar experiences. The insurance companies do not want omnibus insurance now and the difficulty will therefore arise that it is quite possible that some company or bus owner may either be denied insurance or offered insurance at rates which would be altogether excessive. If we are going to insist that everybody driving a car is to be insured by private insurance companies then we must provide for the regulation of these private insurance companies. We must either insist that they give insurance cover to everybody who applies for it or else provide some court of appeal to which a person, who is denied insurance, could apply and which if satisfied that the denial was not justifiable could direct the insurance company to issue a policy. In addition there should be some check on the premiums charged as otherwise it is quite possible, in relation to particular individuals or the whole class of motorists or the particular class of bus owners, that excessive premiums will be charged. If we pass this Bill in its present form such excessive premiums cannot be prohibited in any way. There is no power in the Minister or in anybody to interfere. We are all in favour of compulsory [1363] third party insurance. It is the view of Deputies on this side of the House that if the State desires to make insurance compulsory it should itself provide the facilities but we cannot argue that out now. What we can insist on is that if the issuing of policies is left to private companies the whole system will be subject to strict regulation to prevent abuse. If the Bill goes through in its present form there is a danger, even if there is no likelihood, of abuse, and some safeguard would have to be inserted.

Mr. Good: I would like to support what Deputy Lemass has said. A case came to my knowledge in the last couple of years in which the owner of a private car had the misfortune to meet with two accidents. Both of these accidents were settled by the insurance company, but when the reinsurance of the car came up the insurance company said to the owner, “We will not continue the insurance on that car unless the driver is changed.” I happen to know in that particular case that the owner was quite satisfied that in neither accident was the driver in any way to blame and the insurance companies, if we are to allow that practice to continue, would have the right of depriving men of their livelihood. That to my mind is unfair and I agree with what Deputy Lemass has suggested that there should be some tribunal and that that power should not be placed in the hands of an insurance company. The dealings I have had with insurance companies have been very fair and equitable but placing such power in their hands is unwise. We have no guarantee at all that those powers will be wisely used. Therefore I think there will have to be some tribunal.

On the question the Deputy raised with regard to buses I have had several communications from bus owners. In one of these the bus owner stated that the insurance companies had refused, I suppose for some similar reason, to renew the policy of insurance. The question put to me was: “What am I to do?” I could not make any sugestion to the bus owner as to what he should do, but it seems [1364] an extraordinary power to put into the hands of an insurance company and say that not alone could they put a number of men out of employment, but that they could put certain bus companies out of business. One need not stress the point in detail. I think it is sufficient to say that there is a case which the Minister ought to consider and devise ways and means to meet.

Mr. Cassidy: On this side of the House we certainly agree that a third party insurance is necessary as far as buses are concerned. We must take into consideration that a big percentage of the buses plying for hire on the streets of Dublin and throughout the various counties in the Saorstát have been bought by their owners on the hire purchase system, with the result that, if an accident takes place, in many cases they are not able to pay compensation to injured persons or to relatives of people who have been killed. I think Deputies will recollect that in Dublin a year or two ago there was a lamentable accident in which one life was lost and another person was maimed for life. I understand that, owing to the fact that that particular company had no third party insurance, no compensation was paid out.

There is another question to which I would like to refer in regard to insurance. It is the question of buses going from the Free State into the Six Counties. I understand that these buses have been held up in the Six Counties and asked for their third party insurance policies. Further, I understand that they will not recognise the insurance unless it is taken out with a British insurance company. I understand that they will not recognise third party insurance policies that are issued by Irish companies. If that is so in the Six Counties, when we are making insurance compulsory here we should consider whether these policies should be taken out with Irish companies so that the premiums and profits accruing will be kept within the Saorstát.

General Mulcahy: The question raised by Deputies I realise is important, but the question for us [1365] is can we, at this particular stage, complete our insurance provisions so that we shall force insurance companies to take people whom they know to be bad risks. If we do, then we are adding to the dangers that people run as a result of traffic on the roads and we are adding to the price that the ordinary motoring public will have to pay for the insurance policies they take out. I have pointed out already that although this Bill has been before the public for a considerable length of time the problems that arise for bus owners in regard to speed and other things have not been put before me, although it would appear that some of the problems have been put before individual Deputies. If bus owners put these matters before the Department they would have to be thoroughly gone into and we would get at the realities of the position. We are dealing with a very complicated and widespread thing and except we have the initiative as well as the co-operation of all persons interested in it we are not going to hammer out a scheme in the most satisfactory and fullest possible way. Naturally insurance companies are businesses that look after in the first place their own material interests. We are dealing here with a special problem. We expect that we are going to have the full co-operation of insurance companies if the companies are going to be regular institutions here, existing on the business that is provided here. I have no evidence at all—because during all the time that this matter was being inquired into before the Traffic Committee the insurance companies held back—that they are not going to meet us in the fullest possible spirit of co-operation. If we are going to force a particular insurance company to take a bad risk I would like to know what the effect of that is likely to be. It might be possible where an insurance was refused by any insurance company that it would be required to state a case on which the refusal was made and that there might be an appeal to a District Justice as to whether it was reasonable or not, but I would not like to say offhand that we can produce a scheme like that. There might be a [1366] scheme by which a statement of the reasons for refusing might be argued before a District Justice, but the question arises as to whether that District Justice could order the insurance company to take that particular case.

Mr. Lemass: You can exempt such cases from the Act.

General Mulcahy: If you exempt them from the Act then the position will be that all the bad risks can run around without being insured.

Mr. Lemass: A man would not be exempted unless he was denied insurance without justification.

General Mulcahy: I do not know in what position a District Justice would be to give a judgment on the matter. I do not know whether any Deputy at this particular stage can add any further suggestion as to what might be done.

Mr. Lemass: I would suggest that insurance companies should be required to test out in the courts the question of negligence in relation to accidents. If an accident takes place the insurance company should not merely pay damage, but the case should have to be investigated in court as to whether or not their client was negligent, or whether a claim should be directed against the other party. If you do that, although it would be the fairest thing, it is going to ensure that the cost of insurance will be increased and also the profits of the lawyers.

Mr. Good: I would not support that. I think it would be a bad remedy. We are in a difficulty at the moment, but we would be in a hopeless difficulty if we were to ask insurance companies to do what the Deputy suggests. I do not think that it is beyond the bounds of possibility to devise some means of dealing with this problem. It is a very wide power to put into the hands of insurance companies that they have the right to put men out of employment or to put bus companies out of business. It is a power that I think this House ought to be slow to give to any insurance [1367] company. I think if the Minister will give consideration to it he will find that there will be some tribunal to which such a question could be referred for decision.

General Mulcahy: I wonder if there are buses running at the present moment that are uninsured in respect of third party risks.

Mr. Good: I would not be surprised.

Mr. Lemass: Does the Minister remember an accident in the Coombe in which a bus went on fire? There was no insurance cover in that case.

General Mulcahy: We want to face the situation then that there are buses running at the present moment that are uninsured, that there are insurance companies that will not insure these people, or insurance companies who desire if they can to get rid of the insurances they hold in respect of some bus companies. Then we are asked to force insurance companies to take these risks.

Mr. Lemass: You are forcing companies to insure.

General Mulcahy: We are forcing companies to insure. The proposal is that in forcing these companies the insurance companies should not be allowed to have regard to previous transactions.

Mr. Lemass: You should make it possible for these companies to do what you are forcing them to do.

General Mulcahy: If there are people who have shown that they are not proper persons to have driving omnibuses, are you to force companies to accept them?

Mr. Lemass: That is the situation that faces some of the largest bus companies in the country. They cannot get insurance cover.

General Mulcahy: If what Deputy Lemass says is correct, that some of the largest bus companies in Dublin are unable to get insurance, is it not [1368] astounding that they should let a measure of this sort go through a week or two of the Committee Stage without addressing the Department as to their position?

Mr. Lemass: I agree.

Mr. MacEntee: I think the Minister is pinning the discussion down to the class of bad risk and the attempt to force the insurance companies to take the bad risk. I think the issue really arises as to whether we should put the onus on the insurance company of appearing before a certain tribunal to prove that the risk which it has refused is definitely a bad risk because the vehicle is unsafe or the driver is careless or reckless. Nobody in this House or outside wants to see a person, who has either a faulty vehicle, or is a careless driver, or employs a careless driver, running a motor vehicle. If the tribunal is satisfied that he is that sort of person nobody is going to attempt to compel an insurance company to insure him and put him on the road. But there is the case of a man who may have been in an unfortunate accident in the real sense of the word, or who may have had some trouble with an insurance company in regard to the settlement of a claim for an accident in which he was possibly the injured party. For one reason or another, that man may have been turned down by an insurance company. He may have got a bad reputation or an undeserved reputation, and there should be some tribunal to which he could appeal. If the tribunal decides that definitely he is not a bad risk there should be some means whereby that man can get insurance and be put on the road. The Minister says there is a difficulty. I think a way out might be that the insurance companies who are doing this business might form a re-insurance pool, and whatever company carries that man's insurance could re-insure in the pool formed by the insurance companies. That would get over the difficulty of the risk and make everybody doing insurance carry the risk of this person which the companies as a body consider an undesirable risk, but which the tribunal to which he has appealed has decided is a risk which [1369] should be undertaken. At any rate, the person should definitely not be put off the road.

The matter has been argued merely from the point of view of those who are running buses for profit or of business concerns employing drivers. But it also affects professional men and commercial travellers. Motor cars are essential to their business. If these people were not insured and could not drive a car they could not follow their daily occupations. In addition to that, the fact that insurance companies have definitely turned them down is a reflection on their personal character and reputation which would not assist them either with their clients, if they are professional men, or with their employers, if they happen to be commercial travellers. The matter ought to be examined carefully and certainly some machinery should be devised to meet the position which has been dealt with in the House. There is another point which I might mention and that is, since we are compelling drivers to insure, we ought also have some machinery to secure that the premiums charged will be reasonable.

Mr. J.X. Murphy: The Deputy referred to a tribunal to decide this knotty point, but he does not say what tribunal he has in mind.

Mr. Lemass: Any sort of tribunal.

Mr. MacEntee: A legal man assisted by two technical assessors, or a District Justice, if you like.

Mr. Murphy: I think he said that if a man is turned down by several insurance companies it will reflect on his character and do injury to him in business. Surely if he goes before a tribunal and the tribunal finds for the insurance company, will not that do him more injury?

Mr. MacEntee: He has the option of going before the tribunal. If he is satisfied that his case is so bad that it will not bear public investigation. we take it that the companies are justified in refusing the risk. But if he believes he has been unjustifiably turned down, he should have the right of a public investigation.

[1370] Mr. Moore: Without prejudicing the suggestion made as to this tribunal, I suggest that the Minister should take power under the Bill, at least in regard to public service vehicles, requiring the insurance companies to furnish quarterly returns to him of the number of applications for insuring public service vehicles that have been refused during that period. That would be a moral warning at least to insurance companies that they could not refuse applications without very good reason. I am sure the insurance companies would regard it as such a warning and would be careful that they would not refuse any case where they could not give substantial reasons. As well as the returns, there should be given the reasons for refusing the applications. I think that would be useful with regard to public service vehicles. I think that the private car case is much less important. It is a purely personal opinion. I think that with the competition that there is between companies, the number of good applications that will be turned down from private motorists for insurance policies will be very few, without at least very considerable justification.

Mr. Aiken: I see very little difficulty in the case of privately-owned vehicles. If there is an appeal to the District Justice against the decision of the insurance company, the District Justice can decide whether the insurance company is to continue to insure the motorist or not. If the District Justice has that power over all the insurance companies when each of them, I suppose, will be carrying a portion of the risk, there will be few appeals to the District Justice. I think there is no great difficulty in that. I do not see why the Dáil should have any doubts about giving leave to appeal to the District Justice and leaving the power in his hands to decide whether the man should be insured or not. Everyone knows that there is a great difference between the risk covering buses and the risk covering an ordinary vehicle. I am sure that the insurance companies who refuse to take buses do so on the [1371] ground that if they took buses generally, and if they are not going to put the bus insurance at an extravagant rate, they will have to raise the premiums on the ordinary vehicles.

It struck me that as there is a big difference between the insurance of ordinary cars and the insurance of buses we should segregate them. If you had a mutual insurance company compulsorily established, all the buses having to come into it, when an accident occurs whatever damage is assessed should be distributed evenly over every seat in every bus throughout the country. If a man has a 20-seater bus he would have to pay a twenty-secondth thousandth part, or whatever is the number of seats in the country. If you had that you could have a mutual insurance company established compulsorily. In that case if this mutual insurance company objected to some particular driver or bus there could be an appeal to the District Justice. I think it would be to the interest of the bus companies to see that no rickety vehicle or bad driver was allowed to be on the road. The problem of the insurance of buses is going to be a difficult one, and at the moment I do not see any way out except for them to come together and insure themselves.

Mr. J.X. Murphy: I think if this proposed tribunal is established as Deputy MacEntee suggests and if pressure is going to be put upon the insurance company to take a risk that the Company thinks undesirable that company should be indemnified by the State if they have to pay for an accident incurred by the bad driving of the insured.

General Mulcahy: I think we must be careful, particularly in respect of buses, that we shall not be putting a burden upon the well-organised road transport services of this country, because, for one reason or another, we allow others to run buses which in the eyes of responsible and well established and critical insurance companies working here are thought to be bad risks. [1372] I think, however, considering all the disabilities and burdens under which road transport at the moment rests, it would be quite unreasonable that we, for the sake of a bad bus business, should put an additional burden on the State. We naturally have to think how we can get around that.

Arising out of the discussion here, what I see I can get consideration for is this: That where a person is unable, after application to all the insurance companies which are operating here, to get any one to insure him at the premium that he considers reasonable, then he might apply to the District Justice to have a case stated—I do not know whether by one or all the insurance companies working here—as to the ground on which he was refused the licence. If part of the grounds on which they refuse the licence are that the vehicles are in a bad condition, or that the drivers are unfit and incompetent, then under this Act, whether it was the case of private persons or public service vehicles, the machinery of the Act could be applied in the testing of the vehicle on the ground arranged for, or for the testing of the fitness or competency of the people objected to as drivers. The District Justice, with that before him, could then give a decision. But is the District Justice then to say that this person is fit to be insured at a normal premium, or is he to fix the premium at which, taking all the circumstances into consideration, this particular person or firm should pay for the carrying of the insurance risk? There might then be an appeal from the District Justice to the Circuit Court either on behalf of the insurance company or on behalf of the applicant. The question whether we could, by formal provision, make such companies as are operating here combine to accept risks of a particular class is another matter. These are the lines upon which, so far as I can see after this discussion, that investigation might be pursued.

Mr. Lemass: Would the Minister contemplate the possibility of introducing an amendment on these lines? If so, we could leave the matter stand at present.

[1373] General Mulcahy: Yes, I shall investigate the matter along these particular lines. After Committee Stage we will have a fortnight or so before we come to Report Stage. I shall have to report the result of my investigation then, and if the house is not satisfied with what is being done the matter can then be taken up on the Report Stage.

Mr. Cassidy: I agree with the Minister on this question that insurance companies should not be compelled to insure vehicles plying for public hire if defective either from a structural or a mechanical standpoint. However, power is being given under the Bill to have a proper system of inspection of vehicles and to have a proper system of testing as to the capabilities of the various drivers. What I suggest is when these vehicles are inspected and found to be quite all right from the structural and mechanical standpoint and that the driver is found to be competent is as much as a licence is issued to him then it should be made compulsory for the insurance companies to insure drivers whether they be private drivers or drivers of public conveyances.

Mr. Connolly: I should like to say, in the first place, we are here passing an Act to make it compulsory on every user of a motor vehicle to have his driver insured. We are coming to the point where insurance companies established for the transaction of business are to be compulsorily compelled to insure drivers. We are asked to embody a compulsory clause in this Bill compelling companies to accept business which they do not want. I hold that if we are to pass an Act here compelling insurance companies to accept business which they did not want, then, obviously, they would immediately close down their business in respect of that particular type of insurance, and accept no insurance for motor vehicles at all. That is the difficulty I see in the matter. In all probability legislation to that effect would mean some of those companies going out of business on the motor side altogether. On the other hand I [1374] believe if State insurance could be established and if, at the time of the taking out of the registration of motor vehicles, it was possible for the county councils to issue insurance policies it would go a long way to facilitate the owners of buses and motor people in general. But I think the greatest possible difficulty will be experienced in trying to get companies to accept motor insurance irrespective of the risks.

It is also very hard to say that you should have to pay for a good risk the premiums that would be demanded by insurance companies in special circumstances. Certainly some way must be found to cover the risk and there is no way to cover a bad risk except by distributing it over the good risks and making good drivers pay for the bad and careless drivers, so that to secure this you would have to inflict hardship upon the people who are most careful and who seldom or never have an accident and make them pay for the careless. In my opinion if it is found that insurance companies are not prepared to continue insuring then the Dáil should consider the advisability of having State insurance for motorists in general.

General Mulcahy: Again the question of State insurance has been raised. I said last night that we are not prepared to put before the House, State insurance for this particular class of vehicle. I feel that if I did bring forward an amendment now I should be told by you, sir, that it is entirely outside the scope of the Bill. As a matter of fact, if we come to consider the feasibility of forcing insurance companies to take insurances we shall have to be very careful in our handling of the situation, so that we shall be able to run the gauntlet of the Chair and not be told that it is outside the scope of the Bill.

Mr. O'Kelly: On this section again there was a point mentioned by Deputy Cassidy a few minutes ago that I should like to bring again to the attention of the Minister, and that is with regard to the possibility [1375] of putting something in this Bill that would make it necessary that any insurance to be done should be done with a company registered in the Free State area. Recently a case was brought to my notice of somebody who was prosecuted in the Six Counties for not having his car insured— there is a compulsory third party insurance law at present in operation in the Six Counties—and though the person charged proved that he had taken out insurance with a Free State company, that was declared not to be sufficient because he should have taken out an insurance with a British company. That case was reported in the newspapers about a fortnight ago.

Irrespective of that and irrespective of what they may do in Britain or in the Six Counties area, I think that as we have insurance companies in the Free State area whose moneys are invested in Irish securities and by whom employment is given practically altogether in the Free State area, whose headquarters are here and who are registered here, I think that, as we have such companies in existence, preference ought to be given to them by the State in matters of this kind. We should be glad if the Minister would consider the advisability of giving a preference to what, though it cannot be called an Irish industry, may be called an Irish Free State commercial undertaking which gives employment to our own people and pays taxes here. We, on this side, would have preferred that the State should take up this risk altogether in the form of State insurance. But the Minister has already turned down that proposition. We think, however, that he should give serious consideration to this and the other suggestions we have made.

General Mulcahy: I do not know what may be implied by actually registering. But the company carrying on insurance business will have to deposit £15,000, and that sum will only be accepted by the court on a warrant given by the Minister for Industry and Commerce.

[1376] Mr. Lemass: Is it the intention of the Minister for Industry and Commerce to confine business under this Act to Irish companies?

General Mulcahy: Deputy O'Kelly was speaking as between Irish companies registered here and companies not registered here.

Mr. Lemass: Certain companies with their headquarters here do a considerable amount of business in the six counties and in Great Britain; and in the passage of the British Act they found themselves faced with the alternative of losing that business or of registering a subsidiary companies in Britain. Most of them took the step of registering subsidiary companies in Britain. If the British authorities and the Six Counties authorities are going to legislate against companies which have their headquarters in this country, we should at least give these companies some advantage, load the dice, as it were in their favour, and ensure that whatever additional business may arise under this Act shall be given to them in the first instance.

Section 50 agreed to.

SECTION 51.

(1) Where a person is convicted of an offence under the next preceding section of this Act and it is proved to the satisfaction of the Court by whom such person is so convicted that injury was caused to person or property by the negligent driving on the occasion on which such offence was committed of the vehicle in relation to which such offence was committed and such Court is of opinion that some person (other than the excluded persons as defined in this section) then present in or represented before such Court would be entitled to recover in a civil action against the person so convicted damages in respect of such injury, such Court may, if it thinks fit so to do and the person so present or represented so consents, inflict on the person so convicted, in addition to any other punishment authorised by this section, a fine not exceeding the damages which in the opinion of [1377] such Court the person so present or represented would be entitled so to recover against the person so convicted.

(2) Where a fine is imposed under the foregoing sub-section of this section on a convicted person, the amount of such fine shall be paid to the person on account of whose right to recover damages such fine was imposed and, if there is more than one such person, in such proportions as the Court shall direct, and the payment of such fine by such convicted person shall be a good defence to any civil action brought by any person to whom such fine or any part thereof was so paid in respect of the injury on account of which such fine was so inflicted.

(3) Where damages are recovered in a civil action against a person who was convicted of an offence under the next preceding section of this Act in respect of injury to person or property caused by the negligent driving on the occasion on which such offence was committed of the mechanically propelled vehicle in relation to which such offence was committed of the mechanically propelled vehicle in relation to which such offence was committed, the court before whom such damages are so recovered may (unless the person by whom such damages were so recovered is one of the excluded persons as defined in this section) order that the person against whom such damages were so recovered be forthwith taken into custody and be imprisoned for whichever of the following periods shall be the shorter, that is to say, until the expiration of six months from such taking into custody or until such person pays the amount of such damages to the person by whom they were so recovered and lodges in Court by way of security for the payment of the costs recovered by such last-mentioned person in such action such sum (if any) as the Court shall fix.

(4) In this section the expression “excluded persons” means the following persons, that is to say:—

(a) the person who was convicted of the relevant offence, and [1378] (b) any other person who on the occasion of the commission of such offence was the driver of the mechanically propelled vehicle in relation to which such offence was committed, and

(c) if such vehicle was not a public service vehicle any person who on the said occasion was being carried in or upon or was entering or getting on to or alighting from such vehicle, and

(d) If such vehicle was a public service and in relation only to injury to property, any person who on the said occasion was being carried in or upon or was entering or getting on to or alighting from such vehicle.

Mr. Good: I move: Before Section 51 to insert a new section as follows:—

“A person hiring a public service vehicle, a street service vehicle or a private hire vehicle shall not become liable to pay any sums by way of damages, costs or otherwise on account of injury to person or property occasioned by the negligent driving of such vehicle.”

We were discussing on the last section two important points, one of which was the question of compulsory third party insurance for all vehicles. Sub-section (2) of that section deals with the penalties that are incurred by drivers of vehicles and owners of vehicles which are not insured and which ply for public hire. As regards vehicles plying for hire there is a doubt as to whether under the existing law a person who hires one of these vehicles—take, for instance, a taxi— does not become personally liable for any damage that may be done or for any accident that may arise in the driving of that vehicle. At the moment that is a difficult point, and is not, I am advised, defined by settled law. I think the House will be agreed that no liability should attach to the unfortunate hirer of any such vehicle who has no knowledge that the vehicle which he gets into is not insured. It would be very unfortunate and very unfair that, in a civil action, such a hirer should be liable; and it is to meet such a contingency that this new section is proposed.

[1379] General Mulcahy: The principle of this is accepted, and I will bring up a re-draft on Report Stage and insert it in a suitable place.

Mr. Lemass: Is it at present the law that such a person is liable for damages in the event of an accident?

General Mulcahy: If a person, as the result of his incitement or any other compulsion on the driver, induces him to be negligent and thereby brings about an accident, he is in part responsible.

Mr. J.T. Wolfe: I am in agreement with the amendment of Deputy Good, if it were necessary. So far as I understand the law at present all the amendment does is to declare by statute what the law states. It goes one little step further. I do not think that that is Deputy Good's intention, but I think the Minister might bear it in mind. Deputy Good has stated that the unfortunate hirer should not be mulcted. I quite agree. I do not think the law at present makes him guilty; but there may be cases in which an unfortunate hirer is himself responsible for the accident. For instance, if Deputy Good hires a taxi, tells the driver that he will give him an extra half-crown if he gets him to the Kingsbridge within 2½ minutes, and the driver in his effort to do so meets with an accident, the negligence is Deputy Good's just as much as it is the negligence of the driver. It is the negligence of both of them. In that event Deputy Good says that the hirer should not be held responsible. In my opinion if there is negligence on the part of the hirer, the liability should remain.

General Mulcahy: I take it Deputy Good intends that the liability will remain, whether the hirer is definitely culpable.

Amendment, by leave, withdrawn.

Professor Thrift: I beg to move amendment 52:

To delete sub-section (1).

The section deals with a person convicted of an offence against the regulations as regards insurance and yet [1380] there is brought into the same Section the power of combining penalties for that offence with what are ordinary civil court proceedings for damages due to negligence of the driver. Personally I think it is a very great mistake to confound in any way those two entirely different things. On general grounds I do not think civil court proceedings should be mixed up in any way with what are proceedings on charges for breaking the law. The proposals I have put down are directed to remove completely sub sections (1) and (2). I am now dealing only with sub-section (1). It gives the court for the purpose of trying an offence against the regulations under this Act, so far as the insurance sections go, the power of inflicting damages in what ought to be civil court proceedings for damages. It is a great mistake to confound these two things.

Mr. Moore: My proposal is as follows:—

To delete sub-section (1) and substitute therefor the following sub-section:—

“(1) Where a person is convicted of an offence under the next preceding section of this Act and it is proved to the satisfaction of the Court by whom such person is so convicted that injury was caused to a person (other than an excluded person as defined in this section) or property by the vehicle in relation to which such offence was committed, the Court may if it thinks fit so to do and the person who has been injured or his representative so consents inflict on the person so convicted in addition to any other punishment authorised by this section, a fine not exceeding the damages which in the opinion of the Court the person so injured or his representative would be entitled to recover in an action where negligent driving had been proved.”

The proposal amounts to this, that where a person has been convicted of using a car not insured, that does not carry third party insurance, the court in using the power that is provided for it at present in Section 51 of the Bill should presume negligent [1381] driving. That will enable this sort of case to be compensated. If a person deliberately uses—and remember, he has already been convicted of an offence under the proceeding section— a car which does not carry third party insurance and he causes damage to life or property while he is so using that car, irrespective of whether the damage was caused by negligent driving or not, the judge of the court should be empowered to assess damages in respect of such injury. I do not see why any serious objection could be held to that amendment.

I think it is notorious that in numbers of cases where action for damages for negligence take place, the judgment is often decided on very narrow grounds. I have heard it said that you would have as much chance of getting justice by agreeing to the tossing of a penny as by appearing before a court and hoping for a correct judgment in many of the cases where swearing as to negligent driving and cross-swearing to the contrary has to be gone through. My proposal is simply that all that should be cut out and where a car is used illegally and causes damage to life and property when so used the Justice should be entitled to assume that negligent driving has occurred and he should proceed to assess damages on the grounds the negligent driving had occurred. If I had my way I would so amend the Bill that all cases of damage to life and property, irrespective of whether they were caused by negligent driving, would be insured against, but as that is not practicable, we should at least make every provision with regard to the class of case dealt with in Section 51.

Mr. J.T. Wolfe: This sub-section is sailing very close to the wind. It is very much in danger of coming into conflict with the Constitution. It is far more revolutionary than any of the sub-sections of the Bill known as the Constitution (Amendment) Bill which I think was passed by this House a week or a fortnight ago. It gives the right to send a pauper to jail for non-payment of a civil debt. It provides that a civil claim shall be met by an [1382] award from which there will be no appeal. I am sure that was not present to the mind of the Minister. I can almost imagine myself present when he was considering it in relation to the Constitution, and I can almost hear him pronouncing the words of a famous judge: “I will chance it.” I rather like that, because there is a great deal of good behind this amendment. I would be inclined to swallow the little difference between it and the Constitution and that it should remain subject to one point only, and that is the point that I have suggested in amendment 54:

In sub-section (1), line 30, after the word “convicted” to insert the words “and not exceeding in any case the sum of £25.”

Whatever I may think about amending the Constitution I certainly do think that you should not give to the District Justice a jurisdiction larger than he has at the present time. That matter has been very carefully considered by the Courts of Justice Committee and there was a unanimous recommendation, after hearing witnesses from all over Ireland, that the justices should be kept limited to a jurisdiction of £25. At the present moment you are in this position that if a man is injured and is paid compensation under this measure, and if he has not a match to pay it, he has to go to jail for non-payment of a civil debt. If he is insured that will do no great harm. There might be something in the Constitution against it, but let us leave it and say what the Minister says: “I will chance it.” If you limit the jurisdiction to £25 that will be perfectly fair. I would ask you not to increase by a side-wind the jurisdiction of the District Justice in a civil action beyond what it is at present. It might be as well to have all the amendments considered together, and therefore I will move amendment 54.

General Mulcahy: I do not quite appreciate the Constitutional point that Deputy Wolfe raised except the point is that we are breaking the Constitution by taking power to send an innocent pauper to jail for debt. We are doing no such thing because this is not an innocent pauper. He is a [1383] pauper who, under Section 50 (2) can be fined for the first offence £50 and/or get three months and for the second offence £100 and/or get six months.

Mr. J.T. Wolfe: For a civil debt.

General Mulcahy: But this is an extension by way of fine to meet particular circumstances. If Deputy Wolfe goes down Grafton Street and throws bricks into a window there and is hauled before a District Justice, the Justice says “I will fine you so-and-so, but if you undertake to pay for the window I will let you off.” Deputy Wolfe will say “I will pay for the cost of replacing that window.” It may be £25 or £50 but he pays for it and is let off. The Constitutional point goes by the board. This is no case of an innocent pauper. As to the question of mixing up civil and criminal business, there may be something in that, but I do not even appreciate that point. I was not driven even to the extent of saying “I will chance this.” The thing appealed to me from the very start and I think it has met the approbation of most of the people who have read it.

I do not quite understand Deputy Thrift's position with regard to it. I will come back to Deputy Thrift's position after I deal with Deputy Moore. Deputy Moore says we are providing here in so far as we can that if a person on the road, as a result of the negligence of other persons, is injured by a motor car, compensation will be available. Deputy Moore wants to have the position that a person meeting with an accident due to his own negligence shall be entitled to compensation. We do not intend to go as far as that and I have no sympathy with Deputy Moore's amendment. In reply to Deputy Thrift, the general position is that there may be circumstances in which a person who is not insured will go out on the road and, due to his own negligence, will meet with an accident. Being the type of person who drives a motor car without the statutory provision of insurance there is fairly good reason to assume that he may be clearly a bad [1384] mark for insurance. If so, a poor person injured by such person is put into the position that he has to go before the civil court against this man and incur a certain amount of legal and other expenses and his chances of getting anything by way of compensation are lessened.

To meet that case we make provision that when it goes before the District Justice the person who has been injured asks the District Justice who has determined the cause of the negligence, to fix by way of additional fine, damages. The District Justice may do so. The question of limit arises. The District Justice in a case of smuggling may award a fine entirely unlimited except by some relation to the amount of goods. In certain betting cases he may impose a fine of £500. He is not forced here to deal with any case. Having considered all the circumstances he is not forced into consideration of amounts outside his capacity or general competence. I might consider putting in a limit of, say £500, but I think it would almost destroy this section if we put in £25 because a poor person's leg might be broken by a person who was a bad mark. That person might have a chance of getting £100, but if he had to go to court and fight it out the amount might be reduced to £40 or £50 by the time the legal expenses were covered. The means might not be there. I think it is implied in the section that a person who had been found guilty of negligence, and, who in fact had been fined, would have the power to appeal to the Circuit Court. The person who had consented to the fine being fixed by the District Justice would not have any power to appeal because he had asked to have the thing done and it was finished. I commend the powers contained in this section to the House.

I do not think that under Deputy Moore's amendment the person who met with an accident, because of his own negligence, by reason of the fact that the vehicle was uninsured, should become entitled to compensation. We would prejudice the effectiveness of the whole section by putting in a limit of £25 when it is considered than an [1385] accident might reasonably run to £100 in damages, and that the District Justice has power on consideration of all the circumstances to say that the case should not be dealt with in that court. He has full power to do that and has capacity and competence to deal with larger sums.

Mr. J.T. Wolfe: Will the Minister fix a limit or leave unlimited jurisdiction to the District Justice? Does he suggest that he should have power to award £10,000?

General Mulcahy: No. I would be prepared to put in a limit of say £500. The District Justice need not deal with the case if he does not want to do so, but if there was a case that he thought should be dealt with he could do so on these lines and there could be power to appeal to the Circuit Court. It is simply a question that there is a chance of getting the job finished in that court.

Professor Thrift: I do not think the Minister is right. I am a strong believer in the maxim that if you try to do two things at the same time you do them both badly. I think that is likely to occur in this case. This case is brought primarily to settle the question whether the person has obeyed the insurance laws or not. If he is convicted, for instance, other questions will come up as side-issues and must be treated as such. I ask the Minister to consider what he has been saying from the other angle. Supposing that a person is a mark and supposing it has been found that he has been negligent the District Justice may say: “I will fine you £50 in addition to the insurance penalty.” The person may be very glad to consent to that order to save £500 in a civil court.

General Mulcahy: He can only do that at the request of the injured person.

Professor Thrift: Yes. A person being a mark might think he would get off more lightly in the District Court than by having an action in the civil court.

[1386] General Mulcahy: The only person who has power to ask the District Justice to deal with a case in this way is the person who has suffered injury. The person who has been negligent has no power to make any request to the District Justice.

Professor Thrift: That does not touch the question of amount.

General Mulcahy: No.

Professor Thrift: To the District Court £50 would seem a much bigger sum than £500 damages in the civil court. I stick to my contention that it is likely the two things will be badly done if done at the same time.

General Mulcahy: I would be prepared to put in a limit of £500 or something like that, but it is the aggrieved party who can start the machine moving in the District Court. Surely he can have his own advisers in the matter.

Mr. Finlay: Does not the Minister consider that the sub-section as it stands imposes a considerable hardship on the person who may be convicted? In the ordinary way a person comes before a court to meet a criminal charge—whether or not in this case he is guilty of a particular offence under Section 50. This sub-section as it stands empowers a court to proceed on a completely different enquiry, that is as to the amount of the damage that the person convicted of the offence should pay to the person who has been injured.

As I see the section it is open to the court, once the person convicted is present, immediately to proceed to the assessment of damages.

General Mulcahy: No.

Mr. Finlay: At the request of the person injured.

General Mulcahy: Yes. One of the first ingredients in enabling a court to determine what quantum of damages should be awarded to a person is medical evidence as to the nature of the injuries received by that person. If the section is to be carried into full effect, every person who is prosecuted [1387] under Clause 50 must go to court prepared with medical evidence. He must have the person who was injured examined by some medical expert if he wants to defend the case as to the question of damages. I think there is an undue hardship on the person who has been convicted under this section. The question of damages raises a completely different issue from the issue before the court, in the first instance, namely, whether the person has been convicted of an offence under a previous section or not. Another matter that would appear to me to be a grievance, not to the person convicted of an offence but to the person injured, who invokes the aid of the court, is that the proceedings here will be proceedings at the suit of the Gárda Síochána or the Attorney-General prosecuting through a member of the Gárda Síochána for an offence under Section 50. I am assuming that the person invokes the aid of the court. There is no reason why a person who invokes the aid of the court to have damages assessed, and feels aggrieved by the decision of the court as to the quantum of damages should not have a right of appeal as any ordinary person has from the decision of the District Court. Under this section, as I see it, the person aggrieved who invoked the aid of the court has no right of appeal. He is not a party to the proceedings. The proceedings are a prosecution at the instance of the Gárda Síochána against an alleged offender, and the person who invokes the aid of the court would have no right of appeal to the Circuit Court. I think this sub-section is trying to short-circuit proceedings which should not be short-circuited. If a person has suffered personal injury I think the better course for both parties concerned is to let them pursue the ordinary remedy and sue for damages against the person who is alleged to have committed the offence.

General Mulcahy: The section is primarily intended to short-circuit cases that should be short-circuited. Those are cases in which somebody has been injured by a car which is not covered by insurance. The offender may be in [1388] the eyes of a District Justice a bad mark for damages. Where the District Justice has found negligence and where there may not be any reasonable expectations of funds being available to pay compensation, the sooner that case is short-circuited, in the interests of the injured party, the better. If the injured party asks the District Court to finish the question, then he has to take whatever comes to him. If the person found guilty of the offence is dissatisfied with the judgment of the District Court, he has the Circuit Court to appeal to. It is intended to short-circuit cases that in the interests of the injured party ought to be short-circuited by reason of the fact that money in any liberal measure is not available to pay compensation, and that if law costs were to be taken out of whatever money was available the injured person would benefit to a lesser extent.

Mr. Finlay: With respect to the Minister, I cannot see how there could be an appeal to the Circuit Court under this section. Under the sub-section as it is framed, there is no proceeding whatever, no originating process, in the District Court between the person aggrieved and the person alleged to have committed an offence under the section. In other words, there is no proceeding whatever in the District Court with regard to that. The only proceedings before the District Court are the proceedings at the suit of the Gárda Síochána or at the suit of the Attorney-General against the defendant, and, ancillary to the powers of the District Justice in that matter, he may award compensation to a third party. But that does not constitute proceedings between that third party and the party convicted of the offence so as to enable an appeal to be brought to the Circuit Court. If it is desired to provide for an appeal to the Circuit Court, there should be a specific provision inserted in the section to that effect. If that difficulty be got over, I still doubt, on the whole, whether the advantage of having a summary method of dealing with a person alleged to have no means out weighs the disadvantages I have indicated. If a person has no [1389] means, it is quite immaterial what court proceedings are brought in or whether they are brought in any Court. If a person has no means, I think it would be just as well that the person aggrieved should have time to consider whether he would institute any proceedings or not.

Professor Thrift: I quite agree with what was in the Minister's mind and the good he is seeking to attain. But, after all, it will not do the injured person any good to know that the guilty person has been sent to jail for three months because he could not pay £50 awarded against him. That is not likely to help or cure him. I agree entirely with what Deputy Finlay has just said. Some advantage may be secured by this section, but the injurious effects likely to arise will entirely outweigh the advantage.

Mr. Good: Under this section, while the injured person has a right to be compensated for injury, we must not forget that the defendant also has rights. He is being convicted of an offence under Section 50. That is to say, he is uninsured against third party risks. But before he can be mulcted in damages, he must be convicted of negligent driving and he has a right to have a jury to decide whether, in fact, it was negligence that led to the accident. The accident was not caused by his being uninsured.

Mr. Moore: I am not surprised that the Minister had such contempt for my amendment. The only thing he saw in it was the possibility of people who are anxious to commit suicide getting damages against motorists. I suggest that there is a great deal more in the amendment than the Minister says there is. I think nobody can be satisfied with the Bill, since it does not cover cases of persons injured through a mishap to a car. Take a case such as happened in Dublin during the past few weeks. A man was knocked down in Dame Street and killed. There was no negligent driving on the part of the motorist, so that no action lay. If a man meeting with such an accident has big family responsibilities, I do not think that any of us can be satisfied, when we are [1390] making a big change like this, compelling insurance and providing against accidents due to that very doubtful and vague thing called “negligent driving,” that provision is not made for that type of case. So long as we are leaving out that big class of case I do not think any of us who take the Bill seriously can be satisfied with its provisions.

If a man who has no right whatever to take a car on the streets, a man who has already been found guilty of defying the law, does harm to life or property, either accidentally or through negligence, he should be accountable for it. The difficulty of proving negligent driving is extreme, and I venture to say that in nine cases out of ten none of those concerned is satisfied that justice has been done when the proceedings are over. My idea was to cut out all that in the case of a man who has no right to be on the street in charge of a motor car. Whatever damage he does, he should be responsible for, irrespective of whether it arises through negligent driving or not. The Minister says I am trying to deal with people who, through their own negligence, meet with motor accidents. Very few people stand in front of a motor car in the hope that it will hit them and enable them to get damages. The Minister should have seen that that is the case least likely to happen. I am very sorry that the Minister has adopted so contemptuous an attitude towards the amendment, because I am sure it is one which would be more likely to be useful than to cause grievances of any kind.

General Mulcahy: The Deputy has a perfect right to choose his own words, such as “contempt” and “contemptuous.” I did not say that this amendment was intended to provide for a person who stood in front of a motor car deliberately. I said the Deputy wanted to provide for a person injured by a motor car as a result of his own negligence. Any kind of accident that may be brought about by a car of that type could be brought about where you have negligent third parties. The suggestion is that we are [1391] to saddle the owners of motor cars with the cost of that insurance.

Mr. Moore: Does the Minister imply that cases of that kind would come under my amendment, cases in which there was negligence on the part of the person claiming damages?

General Mulcahy: In all cases in which persons are injured in circumstances in which the driver of the vehicle was not negligent, the burden of their insurance is to be put upon the driver of the car. I do not think that is reasonable. People have to run all kinds of risks every day. There is the normal kind of personal insurance that prudent people enter into. We cannot put all that down on a few picked classes, with the owners of motor cars in one set and some other classes in another set.

Mr. Moore: The Minister is very kind to certain criminals.

Mr. Davin: This discussion has been very interesting to those who have been privileged to listen to it. It is a pity that there has not been a full attendance of the members of the Dáil to listen to the powerful case which the Minister has repeatedly made in support of the section as it stands and of his own point of view. The debate, so far as I have heard it, has amounted to this: that there has been a powerful defence on behalf of insurance companies and of those who are or may be the owners of cars but who will not look after them, or take reasonable precautions to see that they are not used in the wrong direction. Deputy Moore made a powerful plea on behalf of people who own cars but who will not see that they are not allowed to get into the hands of people who may cause personal injury with them. The point of view that we, as Deputies, have to stand for is that of the pedestrian and of the innocent person who may be injured owing to the carelessness of the owner of a car. I do not think we are expected to sit here carrying on an unduly prolonged discussion in the interests of insurance companies and people who will not look after their cars.

[1392] Mr. Lemass: I would like to know it the Minister has anything to say in reply to the point raised by Deputy Good, namely that a person charged with negligent driving has the right to have that charge investigated by a jury. Under this section he may, in fact, be convicted and fined on that charge by a District Justice.

Mr. Finlay: Deputy Moore apparently is under the impression that under the sub-section as it stands it would not be open to the court to consider whether the aggrieved person had been guilty of contributory negligence in bringing the injury on himself. It is perfectly obvious under the section that that is one of the things the court will have to address itself to. What the court will have to determine is whether the injuries were caused by the negligent driving of the person alleged to have committed the offence. If the injuries were caused through contributory negligence on the part of the aggrieved person, then they could not possibly have been caused by the negligence of the person accused.

Mr. Moore: My case was that all that should be cut out, and that negligent driving should be assumed in every case where damage to life or property was caused by the use of an uninsured car or by a car driven by an uninsured person.

General Mulcahy: I have not anything to say on that point, but I will have it investigated. Dangerous driving is a thing that the District Justices can deal with. In certain cases where a person has been driving and has not been insured, we propose that the District Justice shall be enabled to assess negligence and impose a fine. The charged party will have the right of appeal to the Circuit Court. Deputy Finlay thinks that the section as it stands does not secure an appeal to the Circuit Court. I will have that examined. I do not know whether that appeal to the Circuit Court would involve a jury. I will see whether it will not be possible to include a jury when there is an appeal to the Circuit Court. I can see whether or not we [1393] can round off the matter in that particular way, but I would ask the House to have this particular class of case dealt with by the District Justice on the ground of negligence and with a fine on the application of the injured person when the circumstances dictated that it was a fit case for the District Justice to deal with.

Mr. O'Kelly: Are we to take it that the Minister is also going to consider the point raised by Deputy Moore?

General Mulcahy: No. Deputy Moore raised a point on this section of a person being injured by another who was not insured. To ask that people should be insured not only in respect of cases arising out of their own negligence, but to insure in respect of cases arising out of, say, an act of God or the negligence of some other party, would be too great a burden to place upon them. The Deputy is asking too much.

Mr. Moore: What I said was that if I had my way I would endeavour to amend the Bill to deal with such cases, but I was not proposing to do that.

General Mulcahy: I do not see any reason for discriminating in the case of an injured party as to whether he would get compensation because of the fact that he was injured by an uninsured person or by an insured person.

Mr. Moore: I see a big case for it. I ask leave to withdraw the amendment.

Amendments 52 and 53 withdrawn.

Professor Thrift: I move amendment 56:—

In sub-section (3), line 46, to insert after the word “may” the words “if the damages are not paid within fourteen days or such longer period as the Court may determine.”

Amendment agreed to.

Mr. O'Kelly: I move amendment 57:—

In sub-section (4), page 26, to delete paragraph (d).

I do not see why the people exempted in this paragraph should be exempted. [1394] I think that a lot of the good that is undoubtedly in Section 51 will be eliminated if the wide class referred to in this paragraph are taken from the purview of the section. I would like to hear what the Minister has to say in favour of taking out such a wide class of persons.

General Mulcahy: In the case of a public service vehicle, we require compulsory insurance in respect to third parties who may be injured on the road, the property outside the vehicle that may suffer damage, and the person of passengers inside the vehicle, but we do not require that the property of passengers inside the vehicle should come under compulsory insurance. Ordinarily it would not mean very much but it might mean a lot. A person might be carrying a case of jewels or might have a valuable diamond necklace and we do not think that property of that kind should come under a compulsory insurance scheme. The section does want some re-drafting, because I realise that as it stands at present if a farmer came from Naas to town and was returning to Nass by bus and the bus ran into some of his own cattle, he should not be compensated for it.

Mr. Lemass: I would like if the Minister would tell us what is the liability of an omnibus company in respect of passengers' luggage. Are they liable for damages whether insured or not?

General Mulcahy: I take it they are. If a passenger on the bus is injured and his clothing is destroyed as a result of the negligence of the company, he would be entitled to claim not only for personal injuries, but for his clothing also. I do not know that the same would apply in regard to a diamond necklace, but at any rate it appears to be such a small matter and to involve such complications that we are excluding it.

Amendment 57 by leave withdrawn.

Section 51, as amended, ordered to stand part of the Bill.

[1395] Section 52, 53, 54, 55 ordered to stand part of the Bill.

SECTION 56.—SUB-SECTION (1).

(1) A policy of insurance shall be an approved policy of insurance within the meaning of this Act if, but only if, it complies with all the following conditions, that is to say—

(a) it is issued by a vehicle insurer to a person (in this Act referred to as the insured) named therein; and

(b) it is in a form approved of by the Minister for Industry and Commerce; and

(c) the vehicle insurer by whom it is issued binds himself by it to insure the insured against all sums without limit which the insured or his personal representative shall become liable to pay to any person (other than the excepted persons as defined in this Act) whether by way of damages, costs, or otherwise on account of injury to person or property occasioned by the negligent driving during the period (in this Act referred to as the period of cover) specified in that behalf in such policy of a mechanically propelled vehicle to which such policy relates by the insured or by any of such other persons (if any) as are mentioned in that behalf in such policy; and

(d) the liability of the insurer under the policy is not subject to any conditions, restriction, or limitation, and in particular is not subject to the doing or not doing of anything by the insured after the occurrence of an event giving rise to a claim under the policy; and

(e) is not liable to be avoided by the insurer on account of any fraud, misrepresentation, or false statement committed or made by the insured or any other person, whether knowingly or innocently, before or at the time of the issue of the policy for the purpose or in the course of obtaining the policy; and

(f) the period of cover is not [1396] capable of being terminated before its expiration by effluxion of time by the insurer save either with the consent of the insured or after seven days' notice in writing to the insured.

Mr. Good: I move amendment 58 on behalf of Deputy Haslett:—

In sub-section (1) (d), lines 10 and 11, to delete the words “any condition, restriction or limitation and in particular is not subject to' ”.

[An Leas-Cheann Comhairle took the Chair.]

General Mulcahy: This is rather an important matter and I find it difficult to say what we might do. All kinds of questions are asked of persons who come along for insurance. Take a bus company. It is asked whether its garages are made in a certain way, the gradients of the road and the particular roads that the buses travel, and a lot of other queries running into fifty or sixty questions in some cases. I have not got the supplementary question form here, but the answers to the questions are made the basis of the contract. Cases have happened in which certain insurance companies have relieved themselves of the contract by reason of petty conditions not having been attended to by the insured parties. I agree that it may be necessary to amend this section somewhat like this—that the liability of the insurer under the policy is not subject to any condition, restriction or limitation other than such as may be approved by the Minister. It may be necessary to give the Minister power to prescribe the conditions, that if not properly attended to, will void the policy. On the other hand, there are conditions which it would be reasonable for the insurance company to insist should be fulfilled. If a private car were being insured and that it was stated by the owner that the car would not be used for racing, it would be reasonable that that condition should be properly adhered to.

On the other hand, condition such as that the person had not a licence at the time or a condition that the machine had to be in good order, or that the driver had to be sober, I do [1397] not think are conditions that we ought to allow to void a policy entered into for the protection of third parties. I do not know if any Deputies have found themselves up against the wideness of these conditions but there are certainly conditions which some insurance companies have been relying on to void their policy and that we should not allow. I have been giving consideration to this and I will introduce an amendment on report. I do not know whether any Deputies have anything to say on the matter in the meanwhile.

Mr. Good: I shall withdraw the amendment for the present.

Amendment by leave withdrawn.

Mr. Good: I move amendment 59.

In sub-section 1 to delete paragraph (e), lines 14 to 19.

It seeks to legalise a contract obtained through fraud or misrepresentation. I would like to point out that there is a certain group of contracts which are voidable by the party misled, who enters into them, unless each Party has disclosed to the other every material fact within his own knowledge or that of his agent at the time the contract is made. These contracts are known as contracts uberrimae fidei. These contracts include contracts of insurance. In these contracts the rule is strictly enforced, as the facts are generally within the knowledge of the insurers alone. This section strikes at the root of all insurance business and it is doubtful whether the insurance companies will undertake third party risks under the conditions set out here. I am entirely in sympathy with the object of the section, which is the safeguarding of the injured person, but I do not think this safeguarding should be obtained by the introduction of an immoral principle amounting to the condonation of fraud.

General Mulcahy: This amendment is much in the same position as the previous amendment. That is that a false statement may be made in answer to some of the numerous questions I have spoken about which are contained in the application for a policy or in [1398] the subsidiary statement. Section 59 makes it an offence punishable by two years' imprisonment to make knowingly a false statement, and after giving some consideration to this matter I shall be prepared to amend this section in this particular way—that a policy shall not be liable to be voided by the insurer on account of any fraud, misrepresentation, or false statement, unless it shall have been proved before the Circuit Court in some way that will be arranged on the initiative of the insurance companies that the person involved in the contract has been guilty knowingly of a series of false statements and misrepresentations such as would void the policy.

That will safeguard this idea of contract, but I think no contract ought to be voided except a decision were given in the Circuit Court that a false statement or misrepresentation was knowingly made and was sufficiently serious to warrant the voiding of the policy.

Mr. Lemass: I am not at all happy about the suggested amendment. We have to remember the person concerned, that is the person who may be killed or injured as a result of the accident. There should be some obligation on the part of the insurance company to satisfy itself as to the statements made by the insured before it issues the certificate of insurance. As soon as the person gets the certificate of insurance he is entitled to drive a car within the law. He may kill or injure a person and the relatives of the killed or injured come forward seeking compensation. It is referred to the insurance company. The insurance company may proceed to investigate the statements made and if they find that some of them are false, try to get out of the contract. I think it is much better that the insurance company should have a definite obligation placed on them at the beginning to take whatever precautions are required to satisfy themselves that the statements are proved, and they should not issue certificates of insurance until they are so satisfied.

General Mulcahy: My mind is very open in the matter. I realise that the [1399] insurance companies are in a better position to do that than the other people who bring the charge, but on the other hand it is argued that we should force insurance companies to take on insurance.

Mr. Lemass: The Minister is looking at it from the wrong point of view. We are forcing people to insure with insurance companies.

Gen. Mulcahy: Insurance Companies will point out to us “you are asking us to insure people who may be guilty of false statements; yet we have still to stand over their insurance.” I think that may be asking too much. However my mind is open on the matter. I have a lot of sympathy with the type of person the Deputy speaks about and on the Report Stage we can see what we will do about the matter. If the House agrees we can take one way of dealing with the matter. I do not know if Deputy Fahy has anything to say.

Mr. Fahy: It is dangerous of course to upset the nature of contracts in this matter of fraud but I might suggest to the Minister that it would be possible to differentiate between a certain type of accident where you get a car broken up and cases where a person is injured. I would not be inclined to insist so much on the insured person making a full disclosure in such cases. My anxiety would be to protect the people injured in motor accidents. In the other cases of damage to car or damage to property I think the Minister should leave it that the amount of disclosure in an insurance policy could still stand, making some differentiation in cases of accidents to the person.

Mr. Lemass: My anxiety is caused by what is known to be the practice of companies in relation to industrial work. They will issue a policy and collect the premiums and will not question any statements in the policy until claims are made. They then go through with the statements to discover any flaw which will get them out of their obligation to pay. The same [1400] thing might arise if you interfere with this paragraph in any way.

Mr. Fahy: The Minister for Industry and Commerce does not quite follow what I mean. What I mean is that misrepresentation should void a contract for injury to a car or property, but that it should not void a contract in cases where there is personal injury or where there is a person killed.

Mr. McGilligan: I would like to ask the Deputies to go further and to give us their point of view as from the angle of an insurance company. Up-to-date the law has been as Deputy Good described. There were certain contracts relying on the good faith of the parties, the basis is that there are certain particulars within the knowledge of the parties and not within the knowledge of the insurer. You are now going to upset that. Up-to-date the premium bears a certain relation to the risk. The Deputy is now going to change the whole basis of the contract previously entered into with regard to the damage to persons and is going to make the insurance companies, for the future, take the risk that the person insured has not made a full disclosure. Is there likely to be any change with regard to the premiums asked by the insurance companies taking that risk?

Mr. Fahy: The proposition is not mine, but is that of the Minister for Local Government. I am not suggesting that he should change this section with regard to damage to property. I am interested in getting the person injured compensation and seeing that the driver will not get out of it so easily in that case as in the case of damage to property. I quite see what the Minister is arguing. It is a case of uberimma fides and that should certainly hold with regard to damage to property, but I would not be quite so strict with regard to damage to the person.

Mr. McGilligan: I think the principle is quite sound. I am only pointing to the possible repercussions to that.

Amendment by leave withdrawn.

Mr. Lemass: On the section I think this is the best way to raise the [1401] matter. I want to have some reference to it. A case has arisen in England where an insurance company was fined for having renewed a certificate of insurance but allowed the person a month's grace to pay the premium. The usual practice at present is that a period of grace is allowed on the expiration of one policy. After the expiration of one policy the payment of the premium on the second policy, or on the new policy, is dated as from the expiration of the old policy. A case arose in England where a company gave a month's grace to an insured person and issued the certificate as from the date of the expiration of the old policy. That was held to be illegal, and the insurance company was subjected to a substantial fine. The result has been that insurance companies have tightened up the regulation and have refused to issue new policies until the premiums in respect of them have been paid.

I can see, however, that some difficulties may arise in that connection, due to the fact that the owner of the car may forget the fact that his policy is expiring, and allows it to run two or three days before securing a new policy. If he drives his car during those two or three days he leaves himself liable to a substantial fine or imprisonment. I would like to know is there any possibility of inserting a provision in the Bill to enable an insurance company to give some period of grace in respect of the payment of the premium while at the same time issuing a certificate of insurance as from the date of the expiration of the old one.

General Mulcahy: I cannot understand why there should be any difficulty at all, but we can have the matter in this section investigated. That is the insurance company was prosecuted and fined because it had not received the premium.

Mr. Lemass: That is so.

General Mulcahy: I will have the position investigated.

Mr. Lemass: In fact it meant that a certificate of insurance was issued in respect of which a policy did not exist.

[1402] Mr. Finlay: If the Minister considers the issue of the certificate in such circumstances would he not also consider a provision that an insurance company would be bound notwithstanding that the policy had expired?

General Mulcahy: If the certificate is issued and the premium was never paid, and if an accident takes place during the period of alleged grace the insurance company ought to be held responsible for the insurance during that period.

Mr. Lemass: I agree.

Section 56 put and agreed to.

Section 57 agreed to.

Question proposed: “That Section 58 stand.”

Mr. Lemass: On the section, I would like if the Minister would tell us why it is necessary to provide for approved combined policies and guarantees.

General Mulcahy: Most of the policies that motorists enter into are of a kind that makes them responsible, say, for the first five, ten, fifteen or twenty-five pounds damage. It is these small amounts, apparently, that insurance companies are most afraid of. They will give you a policy to cover any damage above £10 or £25. We want to ensure that that gap there will not be left uninsured and that whatever gap is left there in the policy will be covered by a guarantee. When we are forcing a company to be insured they will have to get a certificate from a bank or they will have to lodge a certain amount of surety with the company if the company so desires, and then for a nominal fee the company will cover them with the guarantee for one part and all extra costs by their insurance. A difficulty may arise inasmuch as certain people may want to cover themselves by guarantees with one company, say, with their bankers, and an insurance company will say to them: “We will not do your insurance policy except we do your guarantees for you as well.” I understand that bus owners are in difficulties as to how they may be treated in the matter of guarantees by insurance companies. Some of them cover fairly substantial sums before they actually insure. The [1403] insurance company enters into a policy for damage above the first £500. The possibilities in that particular section will have to be examined particularly to see that bus companies will not be charged exorbitant rates of guarantee, and that if they do their guarantee in one particular way they will not be in a position of being unable to insure because they have not done their guarantee with the company they ask to insure them. A combined policy and guarantee, the guarantee to cover the small thing which insurance companies very often require in order to give reasonable premiums, that the first small expenses will be borne by the insured person.

Mr. Lemass: If it is intended that banks are to act as guarantors under this Bill it is necessary that these institutions should be required to make a deposit of £15,000?

Professor Thrift: Did I understand the Minister to state that in the event of a car owner taking out a policy in which he himself is willing to bear, say, the first £5 of damage that occurs that he must take out a guarantee to the extent of that £5?

General Mulcahy: Yes.

Professor Thrift: For such small items as that?

General Mulcahy: It would be only nominal. The person will give a banker's certificate to the insurance company in respect of that amount. I do not know whether the insurance companies will charge an extra sixpence or a shilling in respect of what they are doing in connection with the guarantees.

Professor Thrift: It is very complicated.

General Mulcahy: No. It is a fact that insurance companies will raise the premium if you ask them to do a small amount. The Deputy probably has himself a small margin that is not covered by his insurance policy.

Mr. Lemass: As a matter of fact, that applies only in the case of omnibuses.

[1404] Mr. McGilligan: And in the case of private cars also. Many a man has gone to insure his car—say, a man who has got into the playful habit of rubbing mud-guards—and been told that it would be made a condition that he should pay on the first £20 or £25.

Mr. Lemass: The point I want to make is that the insurance policy under the Bill must be one that covers the insured person against all sums.

General Mulcahy: If he does not get an insurance policy to cover the whole thing it will have to be an insurance and guarantee.

Mr. Lemass: The policy must be one to cover the whole thing.

Mr. McGilligan: If the policy is to cover everything the premium will be very high. If a person can cover the lower sums with a guarantee then he gets the benefit of the old premium.

Mr. Lemass: My point is that it would be illegal under the Act.

General Mulcahy: No.

Mr. Lemass: Section 56, paragraph (c) states: “To insure the insured against all sums without limit.”

Mr. McGilligan: That is that he may have a combined policy and guarantee.

General Mulcahy: A policy and approved guarantee, a combined policy and guarantee, or the person may be exempted.

Mr. Lemass: It is not possible for a person to hold a policy with one company and a guarantee with another. It is not possible for a person to get a guarantee from his bank.

General Mulcahy: That may be a defect in the clause that may have to be changed. That is to say, his insurance may be covered by a guarantee and an insurance instead of a combined guarantee and insurance.

Mr. Lemass: The definition of the insurance policy itself will have to be altered.

General Mulcahy: No. If an insurance policy is complete that is all right [1405] but if an insurance policy leaves a gap in the lower end compensations there have to be covered by a guarantee.

Mr. Lemass: If it does leave a gap it is not a right policy under this Act.

Mr. McGilligan: Look at clause 50. A man may have one of three things.

Mr. Lemass: That is so.

General Mulcahy: It is defined in sub-section (c).

Mr. Moore: Is the Minister satisfied that sub-section (2) is really required? I suggest that it is merely an incumbrance and that it may possibly cause trouble. It only provides that the insurance policy shall not be prevented from being an approved combined policy and guarantee merely by reason of its containing provisions additional to and not inconsistent with the provisions required by these conditions. If the document contains things that are unreasonable but are not additional, and are inconsistent with the provisions required under those conditions would it still be an approved policy?

General Mulcahy: There are certain limited things that we require in an approved policy. If there are additional things in the policy they do not invalidate it as long as they are not inconsistent with our requirements. It is a drafting precaution if you like, a drafting refinement.

Mr. Moore: Some of the additional provisions might not be inconsistent here and yet might leave the policy a very objectionable one. There may be very objectionable conditions inserted.

General Mulcahy: I do not know whether the Deputy has in mind any of the difficulties which we spoke about under Section 56 (d), about conditions, restrictions and limitations. On revision of that clause we will see what we can do, while leaving the insurance companies free to put in conditions that would be reasonable, to see that they will not be able to put in conditions that are unreasonable. We will endeavour to be as explicit [1406] as possible in that respect. If that is so, then as long as conditions are put into a policy which are not inconsistent with the regulations that we require and with the limitations that we think should not be on a policy, I do not think there could be anything to which the Deputy could object. There are bound to be refinements and additions in these policies that will be outside the limits of the requirements that, for