Lazy insurers have cozied up to policymakers

If the consequences of the insurance sector’s influence over our government weren’t so dire, you could be forgiven for taking your hat off to them for achieving the level of influence they have. Somehow, they have managed to hoodwink the government into believing all victims of RTAs are frauds, all CMCs cold-call, and lawyers actually chase ambulances.

The Ministry of Justice’s consultation, ‘Reforming the Soft Tissue Injury (‘whiplash’) Claims Process’, is quite possibly one of the most one-sided consultation documents I have ever had the misfortune to read. Further, the confidence with which the chancellor, Philip Hammond, spoke about whiplash reform in his Autumn Statement has only confirmed to some that the changes are inevitable. However, we fight on.

These reforms have brought together a long-running battle between insurers and the claimant sector and the biggest losers will be innocent car accident victims. The winners, will, of course, be the insurers.

It is a fact that car accidents are frightening and shocking events for anyone who has the misfortune to be involved in one. It is therefore only right that innocent victims are compensated for unnecessary injury and suffering that is someone else’s fault.

We believe that all personal injury claims should be assessed on the impact they have on each individual. By capping or even removing damages, the government is essentially trivialising what can be a serious injury with long-lasting consequences. If compensation is to be pared right back, then at the very least, there should be some kind of rehabilitation scheme set up to ensure injured people get the help they need to recover. However, this will not cover the impact an injury will have on an individual’s life.

Here’s an idea: What about the insurers actually making an effort to reclaim the costs of careless driving from the perpetrators instead of lumping more misery on the innocent injured? I don’t think I am alone in thinking that insurers have become lazy in tackling fraud, buoyed by their increasing profits and seemingly cosy relationship with policymakers.

The disdain with which insurers treat innocent victims is clear, as evidenced by the tone and language used in this year’s Insurance Fraud Taskforce report, which reflected the needs of the insurance sector, not policyholders. The report regularly references the fact that consumers don’t understand the complexities of insurance and therefore make ‘mistakes’ that can be misconstrued as fraud. Apparently, all consumers are a bit stupid and are easily manipulated by rogue traders into making false claims.

Notable by its absence in this consultation document is the complete lack of meaningful evaluation about what happens to an individual when they have an accident and make a claim, the impact on them physically, mentally, and economically, as well as the associated ramifications for their wider family. The consultation paper is taking the same approach as the IFT report.

It was also most disheartening to see some parts of the media, swallow hook, line, and sinker the insurers’ line. The BBC’s coverage was typical:

‘Millions of motorists could see their car insurance premiums reduced’ as a result of plans to cut compensation for whiplash injuries in England and Wales.

‘Whiplash claims have risen by 50% over the past decade, costing insurance companies about £1bn a year.’

Lies, damn lies! The fact is that the number of motor-related PI claims peaked in 2011/12 and have fallen year on year since then and are now at their lowest level since 2009/10.

The reality is that the so-called ‘compensation culture’ is often driven by the first point of contact with the insurer. Recently, a colleague of mine suffered a non-fault motor accident and despite telling his insurer that he had suffered no injury, the insurer persisted in offering him access to their own legal services to make an injury claim on more than one occasion, including unsolicited calls from a third party. Now who’s stoking up a fraudulent claim?

The problem with the predicted £40 saving on insurance premiums for consumers is that there is no way of monitoring and enforcing it, as there wasn’t after LASPO. Worse still is the revelation in the impact assessment accompanying the consultation that even the MoJ doesn’t expect insurers to pass on all the savings – working on the basis that about 85 per cent of £1.3bn would go back to motorists, that left insurers with a clear £200m windfall.

Besides, any hope consumers had of actually seeing their insurance bills cut will be wiped out by the increased insurance premium tax announced in the budget. The government know that the insurers will pass the IPT directly onto consumers.

I have a better idea for passing on £40 to every motorist: When it comes to renewal time the industry could cease their annual premium hike charade designed to get time poor individuals to stump up more cash and instead just give the real price. This would be a fairer and more transparent way of passing on savings to motorists.

The majority of CMCs working in the PI market have very robust procedures in place to detect fraud. In fact, our client base demands it of us – solicitors want real, qualified leads. Further, all of the solicitor firms we work with apply the same level of vigour to tackling fraud that we do, so why can’t the insurers do it?

If Theresa May is really committed to creating a fairer society for all, she would realise that insurers’ inability to tackle fraud is not justifiable reason to change legislation and will put a halt to these proposals once and for all.

Qamar Anwar is managing director of First4Lawyers