Supermac’s Pat McDonagh hits out at ‘Santa Claus judges’ and serial fraudulent compo claimants

ONE OF Ireland’s most successful businessmen, Pat McDonagh, has launched a scathing attack on Ireland’s compo culture.

“The system is very corrupt. I’m not making any bones about it,” he said.

Fine Gael TD Maria Bailey’s swinging woes has put Ireland’s claims culture in the glare of the media spotlight. Ms Bailey has withdrawn a claim against a Dublin hotel over injuries suffered after a fall from a swing. She has vehemently denied it was a fraudulent claim.

The managing director of Supermac’s has spoken out regularly on the issue of Ireland's compo-culture. While not wishing to speak about Ms Bailey’s case, in general terms he said: “If anyone falls or slips or trips or whatever the case may be, whether they are intoxicated or not, the next thing is they are looking around to see who can they put the blame on. It is kind of part of our culture.”

Mr McDonagh, whose group has seven outlets (company and franchised) and two hotels in Limerick, says insurance has gone “out of control” in the last four or five years. He is critical of serial fraudulent claimants; some solicitors, barristers, judges; insurance companies and the Government.

Mr McDonagh said this “culture” is going on for around 20 years but has got worse in the last couple of years.

“When the problem arose first the Government at the time set up the Personal Injury Assessment Board (PIAB) and that helped unquestionably but then the Law Society supported a case in the High Court. They got a ruling that cases could not be settled without legal advice. That changed the landscape.

“What happened then was the legal people could get back into game – they could be represented in PIAB. They started advising their clients to go through the courts process even though it had to be referred to the PIAB first as in, ‘Go through the courts process and we will get more money from the courts’,” said Mr McDonagh.

He can’t understood why the then minister raised the maximum amount in civil proceedings awarded in the District Court from €6,384 to €15,000. In the Circuit Court it went from €38,092 to €60,000.

“That created a further problem. The judges felt that if they increased the limits it means they have to pay out more. There was nearly competition between the PIAB who wanted to try and maintain their service so they raised their awards. That to a large degree brought us to where we are today.”

Mr McDonagh says he has been in a situation where his barrister has told him, “If you get judge X he is a generous judge so you better settle because you woudn’t know what he might do”.

“But if you get judge Y you might get a fair hearing. When you are told one is a Santa Claus judge and the other is the middle of the road judge. When you hear the likes of that… There are some excellent judges but there are a lot of them who have lost contact with what is happening on the ground.”

Most people in business, he says, hand claims over to their insurance company.

“They think the insurance company is on their side. Let me warn them the insurance company isn’t on their side. The insurance company is on their own side. They don’t really care about the client at the end of the day. They look at it from a financial position. Most people in business will have experienced that they will settle a claim without sometimes telling their own client that they have settled. They like to have a lot of claims going through because they can increase premiums.”

Mr McDonagh says he fights most cases.

“Obviously insurance is there for genuine actions. Nobody is saying that genuine actions don’t happen - they do. It’s only right and fair that a genuine victim gets an appropriate amount.” But there are many out there who make fraudulent claims.

“We experienced this one in Limerick where a guy had three claims against three different companies. His Dublin solicitor was so lax that he sent us the wrong claim at one stage.

“The insurance company settled it without our knowledge which was most infuriating because we felt it was always a fraudulent claim or at least questionable.” 

Claims that are withdrawn still cost him anything between €5,000 and €10,000 in costs. Costs are awarded to Mr McDonagh but he will never see them.

“It is very difficult to get that money because if they have nothing what can you do?”

Some fraudulent cases he mentions are a man splashing water on himself in a bathroom and claiming he fell. They had CCTV footage of him doing it. Another one was a lady walking into a door. CCTV showed she went out of her way to walk into a side panel.

A different lady was eating in one of his restaurants.

“There was a noticeboard behind her. She said a thumbtack fell off the noticeboard and landed in her chips. It must have somersaulted out. She said it caused her severe distress and she was in fear of eating in restaurants and so on. That was withdrawn because lucky enough we had videos of her eating in a restaurant the week before she swore the affidavit.”

Mr McDonagh knows an adventure centre up the country that has closed down because they couldn’t get insurance.

“I spoke to a lady in the last few days who was distraught because her insurance had gone up by €50,000.  It contributes to the decision whether it is viable to stay in business or not.” In short, Mr McDonagh says the current system isn’t working.

“There is no willingness on behalf of the Government, who are ultimately in charge of this, to deal with this. There is no willingness on behalf of the judiciary to deal with this. They are responsible for how the courts are run. We reported three different claimants to the gardai but they weren’t really interested.

“Nobody wants to deal with the beneficiaries. Who benefits from these claims? Apart from the claimants themselves – they are only pawns in the game - it is the legal profession and to a much lesser degree medical professionals, engineers. The system is very corrupt. I’m not making any bones about it.”

To tackle compo culture, Mr McDonagh would like to see the PIAB get further powers, prosecution of serial fraudulent claimants, extra training for some judges and maximum pay-outs in District and Circuit Courts reduced.