A lower claims limit will penalise most genuine whiplash claimants

The Transport Select Committee hearing into whiplash last month has yet again allowed the ABI to put out figures to media and government on just how much whiplash claims allegedly add onto motor insurance policies every year. These figures are just hyperbole, and they vary across the insurance industry. No one appears to be questioning the numbers, or asking whether any supposed saving that would be made if the law changes will actually be passed to consumers. My firm has submitted written evidence to the enquiry on the real issues that would face victims were compensation claims subject to an increased limit of £5,000. As an industry, we must not allow powerful insurers to hijack the news agenda and bandy about figures for which there seems little substantiation. There is a job to be done by the legal profession to reveal the true facts, and speak up for innocent victims to ensure they are not denied access to justice.

We need to address the perception that we have a claims culture, and ensure that the whole personal injury sector, from lawyers to insurers and claims management companies, is acting responsibly at all times. I am equally concerned, however, that the government appears to accept the insurance industry's suggestion that, in any situation, an individual enjoys better protection if his or her access to legal representation is removed. This is unbelievable, and akin to asking someone to sell their house on the basis of the buyer's valuation, without taking any independent advice.

Five-year low

The ABI asserts that whiplash claims add £90 to each motor insurance policy. The reality is that, according to official government figures, the number of whiplash claims has fallen to a five-year low, with 60,000 fewer claims last year. So I urge the government to look at its own figures and see if there are smarter ways of measuring whiplash claims limits before just introducing one cut-off point for all; a cut-off point that would see genuine claimants miss out on much-needed funds to get them back on their feet. A far better solution would be for any claims limit to be index linked, tracking RPI.

Furthermore, to ensure that only genuine claims are taken further, all accident claimants should have an independent medical check, which would outlaw the current insurance industry practice of making pre-medical offers. If, as the ABI states, tackling fraud is a major driver of the desire for change, then insisting on a medical would go a long way to achieving this by reducing exaggerated claims and thereby deterring fraud.

To put this in context, if the changes called for by the insurance industry come to pass, someone with a valid claim for £4,950 following a non-fault accident on their part, would have to pull together all of the necessary evidence, medical records and legal papers, and then represent themselves in the small claims court as a litigant in person (LIP). The added burden and costs to the tax payer at a time of budget cuts in the courts, with people self-representing and clogging up the system, is huge. Clearly there will be 'David v Goliath' battles as a single person attempts to fight an insurance company's professional lawyer in court.

Our estimation is that with a lower claims limit set at £5,000, more than 85 per cent of current legitimate claims will be unfairly excluded. This means a considerable number of accident victims will be forced to represent themselves as LIPs. It will result in bottlenecks throughout the court system as inexperienced members of the public are forced to take on an insurer's legal team.

One-sided story

The legal industry as a whole needs to work more closely together to make these points heard and demonstrate to both the government and the public that the insurance industry is only providing one side of a story that has been created to save them money and have the potential to inflate their profits. We must find a middle ground - helping people get back on their feet is something which our legal system should be justifiably proud of and all personal injury law firms should operate independently of insurance companies, ensuring that there is no conflict of interest and the victim is at the heart of every case.

This is about securing personal justice. Whiplash and other motor accident injuries can be a debilitating condition and individuals deserve to be treated and restored to where they were before the accident occurred, such as covering rehabilitation costs and paying for lost earnings. It is time to question the age of the data we have been presented with - which is about nine years old - and not accept hyperbole. It is also time we have a balanced and fair approach to innocent accident victims. We need to pull together as an industry to make this happen.