Promises by Theresa May’s government to cut car insurance premiums by an average of £35 a year by cracking down on fraudulent whiplash claims are doomed to fail, according to legal aid experts and personal injury lawyers.
The Queen’s Speech setting out the Government’s policy agenda for the next two years ditched a number of contentious election promises because of the Conservative Party’s lack of a parliamentary majority but it retained a “Civil Liability Bill” to reduce car accident claims for personal injuries. Axa UK chief executive Amanda Blanc said it was “really encouraging to see the government taking whiplash fraud seriously.”
But personal injury lawyers dismissed the proposed Bill as a misguided attempt to curb a non-existent epidemic of fraud claims, noting that whiplash claims have fallen in recent years but insurance premiums have continued to rise. Instead the reforms will simply leave victims unable to obtain proper justice and compensation, according to Steven Hynes, the director of the Legal Action Group, which campaigns for better access to legal aid.
Hynes said that just 7% of personal injury claims were found to have no merit but the tighter rules on car-related claims will knock out thousands of legitimate personal claims. “The personal injury departments of a lot of law firms will be under real pressure from this, and victims are going to be left unprotected because the Government wants to lower both the value of compensation and the legal costs that people can claim.”
Brett Dixon, the president of the Association of Personal Injury Lawyers, which represents more than 3000 lawyers, said the greatest problem with the whiplash reforms was that victims would be left without access to real justice. “This will make it more difficult for solicitors to help people when they need help, and people with legitimate claims are going to be left alone against the lawyers and barristers representing insurance companies,” he said.
The Tory election manifesto pledged to “reduce insurance costs for ordinary motorists by cracking down on fraudulent and exaggerated whiplash claims”.
The Conservative manifesto also promised to “consider a ban on companies cold-calling people encouraging them to make false personal injury claims.”Dixon said his association had long advocated a prohibition on cold-calling, which was already banned for solicitors but was carried out by opportunistic middle-men. “Those rogue claims-management companies give victims bad advice and false hope and generate the false public perception that there is easy money to be made by falsifying personal injury claim,” he said
“The truth is that there is no such epidemic of false claims, and they are certainly not driving up insurance premiums.” The Government’s own figures showed that the number and size of whiplash claims had fallen significantly since 2010 but car insurance premiums had kept rising, he said.
Research presented by the association to a parliamentary committee earlier this year said the number of whiplash claims has fallen by 41 per cent since 2010-11. “This is the fifth consecutive fall, indicating a very definite downward trend,” the association said. “Insurance industry representatives have already said that savings from these reforms will not be passed on to policyholders because of changes introduced elsewhere in the personal injury system. So, hard-pressed motorists will receive less compensation when they are injured, but at the same time they will be forced to pay higher insurance premiums.”
“During an oral evidence session held by the Justice Committee on February 7 the Association of British Insurers’ witness rowed back from the suggestion that premiums would fall as a result of these reforms, saying ‘you cannot view personal injury compensation reform in isolation from the wider market and economy’. It is clear that, year after year, insurers have been unable to keep motor premiums under control and are using injured people as scapegoats for their own commercial failings.”
by Peter Wilson
The post Queen’s Speech: Lawyers Doubt Cheaper Car Insurance appeared first on Felix Magazine.
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