AXA calls for ban on contingency fees for low value motor claims

Contingency fees for low-value RTA claims should be banned, insurer AXA said yesterday.

Launching its whiplash report, and with the transport select committee's report on the same issue due to be published in the next few days, AXA called on the government to increase the small claims limit to £5,000.

It also proposed a code of conduct to ensure "appropriate behaviour" by insurers who set up ABSs, "particularly around referral of exaggerated whiplash claims to their own law firms".

AXA said that LASPO in its current form was not "sufficiently robust" and unless it was "reviewed and amended" referral fees, a "significant driver of adverse claims activity", would continue.

The insurer said the MoJ's plans for a national accredited medical panel of experts independent of claimant lawyers should go further, so that the "burden of proof" was shifted onto claimants, as it was in France.

Like Sweden, there should be a minimum time limit for reporting the onset of symptoms of whiplash, which could be as little as three to four days. Injuries should be categorised according to the scale used in Quebec, with a "de minimis" threshold below which compensation would not be available.

"Currently, if any part of an insurance claim made by a policy-holder is tainted by fraud, the whole claim fails," AXA said. "The same position should apply in respect of personal injury claims."

Phil Waters, solicitor at Camps Solicitors in Merseyside, which operates the mywhiplashclaim.co.uk website, said: "These 'selective' reports funded by the insurance industry as part of its lobbying focus are essentially an attack on individuals' right to access to personal justice.

"A balanced argument with clear up-to-date data is the best way to proceed. The current drive by insurers looks set to inflate their profits and shift the burden to the tax payer to fund rehabilitation following an accident.

"Our solution is that all accident claimants should have an independent medical check, which would and should outlaw the current insurance industry practice of making pre-medical offers."