Feeding fat cats
Labour & European Law Review Weekly Issue 502 11 January 2017
Despite a reduction in the cost of claims for road traffic accidents, Thompsons says the government has caved in to the insurance industry by proposing to raise the small claims limit for all personal injury victims.
In its response to the Ministry of Justice consultation (which closed on Friday) on reforms to the small claims limit, Thompsons accused the government of allowing itself to be bullied by fat cat insurers into reviving hugely unfair plans to remove access to justice for the injured, without providing a shred of evidence to justify them.
Tom Jones, Head of Policy at Thompsons Solicitors, pointed out that claims of a ‘whiplash epidemic’ were unsubstantiated. Indeed, data from the Association of British Insurers showed that rather than rising, claims costs fell in 2015, the fifth consecutive year of falling costs, and were more than 30 per cent lower than in 2010.
He also disputed pledges made by insurers to pass reductions in premiums of “about” £40 onto motorists, following the consultation announcement, particularly as the government has already made clear that it was not prepared to intervene in what it has described as an “intensely competitive market”. Indeed, instead of passing savings on to motorists, insurers have paid eye-watering dividends to shareholders and hugely increased the level of CEO remuneration.
As well as attacking whiplash claims, the government has gone further in its consultation by expressing its wish to extend the small claims limit rise to all personal injury claims. This would remove access to justice for nearly a million people each year who are injured at work or on the road, through no fault of their own.
The consultation outlines plans to scrap the right to compensation, or put a cap on the amount people can claim for minor whiplash injuries. Capping compensation would see the average pay-out cut from £1,850 to a maximum amount of £425. Compensation would only be paid out if a medical report was provided as proof of injury. This proposal, to do away with pre-medical offers, is the only element of the consultation which Thompsons supports. Other measures proposed include:
- introducing a tariff system of compensation payments for claims with “more significant” injuries
- raising the limit for cases in the small claims court for all personal injury claims from £1,000 to £5,000
- banning offers to settle claims without medical evidence.
Mr Jones said: “The reforms must be stopped. Using whiplash as a fig leaf to increase profits for already profitable big business that is delivering £multi million packages to its chief executives is a cynical con. There is no objective political or moral justification for these major changes that massively favour one party – the insurers - in what is already an unequal battle.”
Thompsons has been actively campaigning against the government’s proposals to raise the small claims limit for injury victims. For more information, visit www.feedingfatcats.co.uk and follow @FeedingFatCats on Twitter.