The committee of inquiry into the cost and methods of providing motor insurance, which was established, inter alia, to look at ways in which the cost of motor insurance could be contained, recommended that disability benefit should be taken into account when assessing damages for loss of earnings as a result of a road traffic accident. In its 1982 report, the committee argued that, as loss of earnings can constitute a very substantial proportion of large court awards when assessing damages arising out of road traffic accidents, it was not necessary for the purpose of achieving justice between the parties that an injured person should recover more than their full loss of earnings caused by the motor traffic accident. The committee was of the view that if it was considered that the injured person ought to be compensated over and above their full loss of earnings, then the court had the discretion to award interest on such loss of earnings.
The then Government accepted the committee's recommendation in this regard and decided that provision be made in the 1984 Social Welfare Act for the taking into account of any payment of disability benefit or invalidity pension paid to the injured person in the five years following the accident, in assessing damages in any actions in respect of liability for personal injuries arising from a road traffic accident. This legislative provision is currently contained in section 237 of the Social Welfare (Consolidation) Act, 1993.