Jeremy Beecham on a missed opportunity to properly tackle fraudulent whiplash claims
Lord Bowen, a distinguished former member of the Lords in the late 19th century, served as a Lord of Appeal. He was also a noted wit, and wrote:
The rain it raineth on the just
And also on the unjust fella
But chiefly on the just
Because the unjust has the just’s umbrella.
The current government, through its Civil Liability Bill, enthusiastically deprives the unjust claimant in whiplash cases of the umbrella of justice. But in doing so, effectively removes this also from the just claimant. A reversal of Lord Bowen’s scenario; and as the former Lord Chief Justice Lord Woolf asserts: “a proposal which involves a genuine victim of whiplash injuries receiving reduced damages in order to deter a dishonest claimant from bringing a claim”.
Nobody participating in today’s Report stage debate on the Bill wants to facilitate false claims. All of us support the need for any claim to be founded on objective medical evidence, and it is right for this to be a requirement for any out of court settlement.
The Bar Council however, suggests the legislation as drafted and the draft regulations published alongside it would see a massive reduction in compensation for the victims of whiplash injuries. Somewhere between 22% and 89%, coupled with the costs they will have to bear as these will be no longer recoverable from the defendants.
The current Judicial College guidelines for a four to six month duration of injury would drop from a range of £2150 to £3810 (the average being £2250) to £470; and for 13-15 months from £3810 to £6920 (the average being £191). And to make matter’s worse, these new arbitrary figures will relate only to the time factor and not, for example, the intensity of pain.
The Lords Justice Minister has declared that “the Lord Chancellor should set those tariffs (i.e. levels of damages) which will act to disincentivise unmeritorious claims to reduce costs for all motorists but which will, also continue to provide a proportionate amount of compensation where genuine injury is suffered”.
In other words, genuine claimants will recover less compensation than they would otherwise receive in order to deter the fraudsters. But why don’t insurers become more rigorous in assessing claims? And what happens when the fraudsters cotton on to the implication that they simply need to moderate their claims, so the insurers are content to pay up without proper examination?
There is disagreement about the extent and cost of fraudulent claims, which should certainly be resisted. Insurance companies, it has been suggested, have been too ready to settle dubious claims rather than risk the costs of defending them. But more importantly the insurance industry’s own estimates show the amount paid out on whiplash claims falling by 17% between 2007 and 2016, while premiums rose by an average of 71%. In addition, Premium Tax doubled to 12% between 2014 and 2017 while the cost of repair bills have risen by 33% since 2013.
If the real concern is the prevention of fraud, we should be looking at other measures. These could include heavier sentences and higher no claims bonuses. And above all, not punishing the genuine claimant for the misdemeanours of the fraudulent or the laxity of the insurance industry.
Lord Jeremy Beecham is Shadow Justice Minister in the House of Lords. He tweets @JeremyBeecham
Published 12th June 2018
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