You might think it more appropriate for the blawger (Mr. David) rather than the blogger to pen this week’s blog. However what the Government is now proposing on PI (Personal Injury) is so patently silly from a consumer’s perspective that I volunteered to write it!
In the beginning the thrust of the government’s Legal Reform Bill – LASPO – which becomes law in April 2013, was both to reduce the level of PI claims, as many were seen to be spurious, and eliminate or reduce what were seen to be excessive cost and reward structures in the referral fee system. Nothing wrong with that, although alarm bells should have been ringing, when it became clear that the Insurance Industry have been one of the main puppet masters, guiding the Government’s thinking.
Let’s deal with spurious first. Apil recently commissioned a study of 4,000 people from June to August 2012 to establish the current scenario APIL Whiplash report:
- Whiplash claims are down not up by 24,000 so the Whiplash epidemic talked up by politicians and lobbyists is hardly that. In any case 30% of these claims are encouraged by Insurers.
- Britons have the weakest necks in Europe – a favourite with some MPs. You only have to look at the Premier League to recognise that this is patent nonsense – nearly all the best headers of a ball are Brits! More seriously the truth is that with almost double the average of cars per kilometre of road, compared to the EU average, road accidents are more likely to happen in the UK, so proportionately more claims will occur! “Whiplash claims are driven by lawyers” is also routinely trotted out as a fact – in fact insurance companies are more likely to encourage a claim than a lawyer or a Claim Management Company – so perhaps Insurance companies should put their own house in order first?? This would immediately reduce the number of claims therefore empowering every car insurance firm in the land to reduce its premiums.
- Whiplash is difficult to diagnose – as a past sufferer I can confirm it is – so surely the only responsible way of dealing with it is by using medical professionals to establish a case. Many insurers will make an offer, normally lower by a factor, to avoid a prosecution – surely this practice should be outlawed?
- Fraud – in terms of attitudes to fraud the survey found that 90 per cent of people thought claiming for an injury when you haven’t been injured is fraudulent. In fact more than 50 per cent of people thought offering compensation by an Insurance company without medical evidence was fraudulent. The same group also believed car repair bills were also higher because the bills were being paid by an Insurance company. It therefore follows that any legislation should also address these issues which it doesn’t of course.
- Solutions to fraud – any industry which involves making claims will inevitably suffer from fraudulent abuse. APIL has come up with its own ten point charter several parts of which could be enshrined in the coming legislation so why is this not happening??
- Trust – the APIL report finishes with whom do you most trust – the answers being:
- 72 per cent Doctors
- 39 per cent Lawyers
- 21 per cent Insurers
- 13 per cent MPs
It will there for be of great comfort to know that the future legal options open to you if you get injured, are being determined by MPs ably assisted by Insurance experts!
The Government has further demonstrated its lack of understanding by its suggested Legal Fees, published last week by the Ministry of Justice Fee Structure. In short the fixed fees that a lawyer can now earn per case are less than the cost of acquiring the case. Nobody is going to lose sleep over fat cat lawyers losing money, but most PI firms I know are small or medium size operations who use a high percentage of paralegals. The likelihood is that many will go to the wall blowing another hole in Small Business employment numbers.
As whiplash normally occurs in Road Traffic Accidents, the most common form of accident by far, the fees claimable in this areas are the most severely reduced.
This means the unfortunate corollary is that with less PI lawyers around, and even less PI firms willing to take on low value cases, the only legal option left to the consumer will be the Small Claims Court where you will represent your self, often against a lawyer, with further personal financial exposure if you choose to use medical experts either for purposes of proof or rehabilitation! Sadly the political objective of reducing the number of fraudulent claims may well be achieved but only at the expense of the 90 per cent of us who would make valid claims!
The good news of course is that with all this draconian legislation set in concrete, as we are so close to this Bill becoming law, every Insurance company in the land will be writing to us in the New Year to tell us that our car insurance premiums will be reduced by 30% due to all these costs being taken out of the system so watch this space ……………..for a very long time!!