The government has decided that in order to reduce fraud and the perception of a compensation culture they will slash the amount of compensation that you, an innocent motorist is entitled to.
And for good measure this will make it far more likely that you have no independent legal representation. All to save you on average 4% on your motor insurance premium – that is, if the insurers actually pass that saving on.
Where you once would have received £1,750 for 3 months of pain as you recover from a car accident that wasn’t your fault, the proposals in the government’s new tariff will be the princely sum of £225.
That’s £2.50 per day to endure back pain, neck pain, any type of pain – as the Civil Liability Bill is set to tackle all injuries, not just whiplash claims.
Where the logic and rationale has come from in determining these new rates, and in doing so deciding that judges up and down the country have been wrong in following the JCG guidelines for so many years, remains to be unearthed.
What we do know is that the civil liability bill is a liability. It will reduce access to justice for millions of injured people every year. It will put individuals up against multi-national insurance bodies to argue their case in court (or online if the proposed online court reforms work out).
All this to save a reported £35 against an average motor insurance premium of £847 and which is suggested could rise to an average of £1,000 to factor in the Ogden Rate changes. This makes the saving just 3.5% on a typical policy.
Perhaps a referendum is in order? Let the people decide if for just 4% of their insurance premium they would be entitled to £3,630 for a 12 month injury (£10 per day) rather than the proposed new tariff figure of just £1,190 (a little over £3 per day).
The government states it wants to crack down on exaggerated and fraudulent whiplash claims in order to save motorists money. Under this proposed tariff the fixed payment is for any injury of up to 2 years – are they suggesting people fake or exaggerate injuries for 23 months?
Tackle insurance fraud of course. Tackle the organised gangs and opportunists that are staging accidents or exaggerating injuries. This is criminal behaviour and should be investigated and dealt with as such.
But don’t punish genuinely injured people as a result of the inability or refusal of insurers and authorities to deal with the small number of fraudulent claims. It’s taking a sledgehammer to crack a nut.
The overwhelming majority of the small number of convictions for motor insurance fraud have been part of criminal gangs. What logic suggests these people would simply stop committing crimes under the reformed PI rules rather than move into something else?
As reported in the Telegraph in May 2017 “As the industry works together to clamp down on “crash-for-cash” vehicle collisions staged by criminals, it is believed that fraudsters are moving into new areas and making bogus public and employer liability claims.”
Even more alarming is the lack of transparency over figures created by the insurance industry to which it appears the Government has accepted at face value and continued to reform the PI sector to the detriment of injured people.
Don’t punish genuinely injured people as a result of the inability or refusal of insurers and authorities to deal with the small number of fraudulent claims. It’s taking a sledgehammer to crack a nut.
The widely publicised figures are also hugely misleading. Even the BBC has been guilty of lazy journalism when it comes to reporting on motor insurance fraud, using the ABI’s unsubstantiated figure of 59,900 ‘dishonest’ motor claims without making clear these are not claims that have been paid on.
The argument that it’s impossible to know how many fraudulent claims are paid out on also by definition means it’s impossible to quantify in financial terms how much fraud is costing the insurance industry and therefore how much motorists will save on their premiums as a result of the fraud ‘crackdown’.
Further to this the ABI has not explained its definition of ‘dishonest’ claims and how it counts these. Given that this figure was released in 2014 at a time when there had only been 85 prosecutions (0.14% of 59,900) for motor insurance fraud in the 3 years preceding that, the question is why so few prosecutions for supposedly many more ‘dishonest’ claims.
What happens when these reforms don’t lead to reduced motor insurance policies – as previous changes have failed to do?
If we don’t actually know the scale of the problem – if indeed there is a problem, there certainly isn’t any evidence for an ‘epidemic’ – then one must wonder why the government has dedicated so much time and energy into changing the current system with the outcome to restrict access to justice for many innocently and genuinely injured people.
The Conservative manifesto stated that they would ‘reduce insurance costs for ordinary motorists’. What happens when these reforms don’t lead to reduced motor insurance policies – as previous changes have failed to do?
The introduction of LASPO in 2012 and the Jackson reforms promised to tackle the whiplash claims costing motorists £90 per year on each policy. Despite that between 2010/11 and 2016 whiplash claims fell by a third, according to figures from the government’s Compensation Recovery Unit, the average motor insurance premium rose almost 12% between 2012 and 2017.
PI firms up and down the country will be all too familiar with insurance companies offering to settle with injured people for considerably less than the claims are worth. If we can’t trust them to pay what is rightfully entitled, or to provide evidence of the scale of fraud, and we can’t trust the government to consider the issues independently of misleading industry figures, then what hope does the person on the street have without a law firm on their side the next time they are injured?