Blog: Whiplash reforms must be based on evidence

Doctor examining patient

  • The proposed whiplash reforms would have restricted injured motorists' access to justice
  • Insurers are posting profits and rising premiums
  • Claimant solicitors would welcome a review of the Jackson reforms

Now the small claims reforms have been put on hold, it is time for an evidence-based review.

While whiplash reforms devised by the last government are reportedly "not off the table", the Ministry of Justice is unenthusiastic about forcing through a rise in the small claims limit, originally floated in the 2015 Autumn Statement and pushed by motor insurers ever since.

In a campaign of naked self-interest, insurers have relentlessly pushed the proposals that would have severely restricted the majority of injured motorists' access to justice if approved.

Motor insurers have never conceded that this was a land grab to strip out their adversaries - the claimant lawyers representing the interests of road accident victims - but rather dressed up their support for what would have been a seismic change for injured victims, with wild accusations of fraud, accusing anyone representing claimants of being ‘ambulance chasers' and ‘cold callers'.

It's unlikely the MoJ's rethink will stop the insurance lobby making outrageous claims about fraud and whiplash, but it should make them stop and think. There are skeletons in the Association of British Insurers' cupboard that can't be hidden under hyperbole and arrogance, however hard it tries.

Car insurers' share prices are outperforming the FTSE100 and other forms of insurance products by a mile. They have failed to produce a shred of evidence to support their statements of massive fraud or huge numbers of crash-for-cash claims.

Claims costs are not up: in fact they've fallen 29% since 2010. The only thing that is indisputably up are premiums for motorists and dividends for insurance company shareholders.

The technical director at Axa, David Williams, and Rob Cummings, the head of motor and liability at the ABI, have both published opinion pieces in Post trying to up the ante on the small claims consultation, lashing out at a lumped together 'ambulance chasing' claimant lobby and a lack of cooperation from personal injury law firms.

Unsatisfied with having got their way on the Jackson Reforms, the insurers' lobbying led to the cue of the Autumn Statement proposals last year on small claims. But what's really needed is not more reforms that line the pockets of hugely profitable insurance companies and hit the majority of honest road users, but a review of where we are.

There will be no lack of cooperation from us if there is a - long overdue - independent review of the Jackson Reforms and other recent changes.

Insurers have a history of pointing the blame for rising premiums or claims costs to anyone but themselves. It's nothing new, and won't wash.

Our analysis of their publicly available financial information paints a picture of a booming industry with healthy profits, cash reserves and dividends, rather than a struggling sector buckling under the weight of ‘fraud'. Any attempt to question motor insurers' assertions about the issue of whiplash or fraud levels has been met with disdain and patronising guff about a ‘compensation culture'.

We hope that the MoJ's announcement marks a shift in mood towards a greater scrutiny of what car insurers are saying, and asking for. The small claims limit consultation may appear to be on ice for now, but we know insurers won't give up. And neither will we, in seeking to force the insurance industry to answer serious, fundamental questions about how it operates.

Why, when you use fraud as a rationale for seismic legal reforms, do you fail to either define it, prove its extent or report it to your shareholders as a material risk? And if business is as the figures prove it to be, why have you not lowered premiums for consumers in a captive market?

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