Time to improve the political discourse around personal injury
Lawyers and insurers should lobby the next government together to produce a fairer claims process, writes Qamar Anwar
News that the Prisons and Courts Bill has been dropped ahead of the general election may be a cause for celebration among claimant personal injury lawyers, but nobody should hang out the bunting yet '“ if, as the polls tell us, the Conservatives form the next government, there is no reason to think that they will not return to the reforms in part 5 of the bill.
So, it is better seen as a pause, rather than a conclusion. It provides a real chance for all sides to take a breath, consider the war of words of recent months, and have a meaningful and honest debate about what is right and wrong in the industry. The emphasis to date has been on shoving from one side and resisting from the other without addressing the real problems.
PI reform should form a standalone bill that looks in more depth at the entire claims industry and puts as much scrutiny on insurers as it does on those making a claim. This will need time and objectiveness to review, and not just the Association of British Insurers whispering in the ears of ministers. There needs to be more transparency in areas like credit hire, the cost of vehicle repairs, and all the other elements of claims, not just the people who suffered an injury. The truth is that insurers are making a lot of money through these ancillary services.
In its rush to press on with the main reforms, the government put those issues on the backburner, but they are a huge part of the equation that shows up in insurers' accounts. Equally, the claimant sector needs to work together more proactively to prove it is taking a hard line against fraud and offering a value-added service to claimants.
The simplistic and misguided middle ground has been to offer up claims management companies as the sacrificial lamb to the slaughter that will make all these problems go away. CMCs that operate along clear, ethical lines cannot really be criticised for helping people with genuine claims seek access to justice.
But it is clear more needs to be done to root out the rotten apples, whether through regulators imposing tighter restrictions on cold calling and data purchasing, or through solicitors being more diligent about checking where their work is coming from, rather than paying lip service to compliance.
Let nobody take the moral high ground here. There has to be more focus on the insurance industry '“ the only shame about the bill being dropped is that the Ministry of Justice had still not published its revised impact assessment. Studies had argued that the original assessment underestimated how much of the projected savings would go straight to insurers' bottom lines, and that it was skewed so as to reach a positive outcome. A more accurate assessment may give MPs and peers more to think about.
So, in the interests of having that more open, two-way debate '“ rather than the slanging match this discussion often becomes '“ there needs to be a recognition that all sides can improve. The various suggestions for less damaging reform put forward by claimant groups indicate a willingness to take responsibility and look for ways to improve the system without making genuinely injured people suffer for a second time.
Crucially, the ABI and its members need to acknowledge that they form part of the problem, whether by funnelling claims through their alternative business structures, selling data to the claims industry, or lacking transparency over those other ancillary claims costs.
It was interesting that, after the bill was dropped, the ABI described aspects of the whiplash provisions as unsatisfactory, and said it was better they didn't make it onto the statute book. It is fair to say that the claimant side felt the same, albeit for different reasons, I should think. Wouldn't it be best if all sides could agree a way forward and lobby the new government as one to make the claims process better and fairer for all?
Qamar Anwar is managing director of First4Lawyers