The Transport Select Committee’s inquiry into the true number and cost of whiplash claims has finally given claimant organisations a voice inside the halls of Westminster.
And news that the Government is not going to give a response to its whiplash consultation until the autumn means there is a good chance that the committee’s findings will be taken into account. At the very least, I hope the committee will note that, according to figures from the Compensation Recovery Unit (CRU), whiplash claims fell by almost 60,000 in the year 2012/2013. Claims are now back to the level they were in 2008/09.
This flies in the face of insurers’ claims of an ‘epidemic’. One of the features of an epidemic is that it spreads rapidly and widely. Scientists have yet to find one which reduces in size.
It’s hardly surprising that insurers are wide of the mark on this issue. The ABI has often based its claims about whiplash on anachronistic data. Its argument that the UK ‘has the weakest necks in Europe’, for instance, rests on a single survey that is nearly a decade out of date. The report, compiled by the, Comite European des Assurances was published in 2004 and relies on figures even older than that.
The truth is that the insurance industry’s disingenuous claims about whiplash are a misdirection designed to divert attention away from more inconvenient facts. According to the ABI’s recent report, Lifting the bonnet on car insurance – what are the real costs? the average car insurance premium in 2011 was £440. £88 of this was estimated to be caused by whiplash claims but £242 (more than half the average premium) went on car repairs and replacement vehicles. The Office of Fair Trading (OFT) has branded the area of car repairs as ‘dysfunctional’ and, having found that insurers’ approach to car repair and replacement “may push up premiums for drivers by £225 million per year”, the OFT referred the UK motor insurance market to the Competition Commission for investigation.
Similarly, documents disclosed as part of APIL’s judicial review showed that the ABI’s claims that premiums would reduce if changes to civil law were made were not as clear cut as they suggested.
In e-mail correspondence between the ABI and the Cabinet Office five days before the famous insurance ‘summit’ with the Prime Minister, the ABI refused to give chapter and verse on how much premiums would fall, saying “we absolutely cannot commit to a percentage… furthermore, we cannot commit to a timeframe.”
Since then, Direct Line and LV= have both publically indicated that premiums would not reduce significantly as a result of the changes.
The Government has already slashed lawyers’ fees in the RTA portal after being persuaded to do so by the insurance industry and is now considering channelling hundreds of thousands of injury cases through the small claims court on the same basis. This would have a devastating effect on access to justice with genuine claimants forced to pay for their lawyers out of their own pockets or take their chances in court alone against qualified solicitors, who usually represent defendants and their insurers.
Those who decide to go it alone without legal representation are likely to be considerably undercompensated and claims management companies will exploit any increase with aggressive marketing campaigns targeting injured people. This kind of publicity could even encourage more fraudulent or exaggerated claims, and yet the Government seems to think the small claims court is a panacea for dealing with fraud..
APIL’s carefully considered 10 point plan to eliminate fraud from whiplash claims was designed to tackle the problem effectively while maintaining the rights of genuine victims of injury, who are, after all, the reason the system exists in the first place. The Government’s proposals will simply create a process which works first and foremost for insurers and their shareholders.
The Transport Select Committee must listen to the facts. If changes to the small claims court are implemented, a totally unbalanced system will be created in which the rights of people suffering injuries through no fault of their own are pushed to one side. Only by listening to all parties can a balanced system be created, with balanced priorities and the interests of genuinely injured people at its heart.