“Hurrah!” you might shout. “Stop this compensation culture!” you might exclaim. But does such a culture really exist? Are more claims really costing motorists more these days?
Actually, no. Insurance industry figures show the cost of car insurance claims fell 30 per cent over the past five years; the number of injury claims also fell.
Almost four years ago the MoJ imposed rule-changes limiting the costs associated with injury claims.
Insurers said this cap would bring savings to the public through reduced premiums, but they have now been forced to admit this did not happen.
Last year alone, premiums rose by an average eight per cent while insurance giants continued to pay fat-cat CEO salaries and significant shareholder dividends.
The government argues curbing injury claims further will “save the average motorist £40” on insurance premiums and, despite clear evidence that insurers have so far refused to pass on these savings, government has admitted it will not be checking.
In any case, the Chancellor’s Autumn Statement decision to raise insurance premium tax is likely to wipe out any potential savings.
If these recent curbs really are about reducing insurance costs, then why is government also limiting people’s ability to claim for workplace or medical accidents?
On the one hand, the MoJ proposes increasing the Small Claims injury limit from £1,000 to £5,000. As a result, claimants pursuing an injury claim with a value of less than £5,000 (estimates suggest up to 90 per cent of claims fall into this bracket) are responsible for their own legal costs.
Would you feel confident standing alone against a well-trained, self-interested, wealthy insurer?
On the other hand, the proposals set out to prevent low-value soft tissue injury claims. But what if a newly ineligible claimant is unable to work and consequently loses earnings? And who should foot the medical bills - a guilty party’s insurer, or the NHS?
Yet again it seems that government has not properly considered the implications of tampering with our mature and well-functioning legal framework - and insurers may have succeeded in hoodwinking their way into punishing the many for the benefit of a few.
If you think the MoJ’s latest proposals affect you, please contact the George Ide team for a confidential consultation.
Paul Lewis. Partner and Head of accident management
George Ide, LLP
Solicitors of Chichester and Bognor Regis