Government remains determined to reduce compensation for accident victims

Latest figures show personal injury claims are already falling, even without further restrictions

New government figures released this week cast further doubt on the rationale behind plans to reduce the money paid to accident victims even further.

New government figures released last week cast further doubt on the rationale behind plans to reduce the money paid to accident victims even further.

The Civil Liability Bill is currently being debated in parliament, and is currently set to become law in 2019. The government’s aims are expressed to include tackling the ‘compensation culture’, and to bring down motor insurance premiums by £35 per year. Justice Secretary David Gauke has targeted whiplash claims in particular, saying that they have been “too high for too long” and are “symptomatic of a wider compensation culture”.

The main measures proposed to achieve these aims are to reduce damages for whiplash by between 62% and 87%, by having damages set by a fixed tariff rather than by judges, and by relieving the insurers of the guilty party of the need to pay the victim’s solicitor’s costs. The intention is to discourage injured people from using solicitors at all, and instead leaving them to deal direct with the defendant’s insurance company.

These proposals have, to put it mildly, come in for criticism.

The first is the significant reduction in damages. The reduction only applies to whiplash injuries sustained in car accidents, although as the bill currently stands, “whiplash” is not defined. Currently, with judges setting damages, damages for whiplash are set in line with other injuries of similar severity, and so there is fairness from case to case.

What happens in the future if, for example, you are in a car crash and you suffer a whiplash injury that causes you some fairly significant pain for six months, whilst your fellow passenger suffers an elbow injury of similar severity and similar duration? Under current rules, you both would get similar damages, about £3,000 or so depending on the severity of the symptoms. If the new rules come in, your damages on the tariff would come down to £450. Your friend, “lucky” enough to damage their elbow, would still get £3,000.

There are many practical problems too with the attempt to remove solicitors from cases. Whilst accident victims have the option of paying for their solicitor themselves out of their damages, if the damages are too low (and on the new tariff, damages are set very low), the legal costs could easily be more than the compensation recovered. Many accident victims will therefore have to deal with insurers directly, and insurers know a lot of victims would find that too daunting.

Other concerns include:

  • How do unrepresented people know what their case is worth? What is to stop insurers offering less than their true value?
  • What if insurers just deny liability for the accident? Would someone without a solicitor be brave enough to go to court, or would they just drop the case?
  • How does an unrepresented victim know what evidence they need to prove their case?

Some of the potential problems could even work against the aims the government have set out.  Politicians score easy points by condemning “speculative”, “have-a-go” or “bogus” whiplash claims, but solicitors play an important role in weeding out weak cases before they start, advising people that they will probably lose so the case goes no further, and costs nobody any money. Without cases being filtered in that way, isn’t there the risk that alongside genuine cases not being pursued because people don’t want to go without a solicitor, there will be more cases brought that have no chance of success, and which waste court time and cost insurers money? In other areas of law where legal representation is hard to get, the effects on courts and on justice have been troubling.

And all of this comes against a background where the government’s own figures show personal injury claims – especially road accident claims – are falling anyway.

CRU graph

Figures from the Department for Work and Pensions released this week show a continued fall in personal injury claims, with the fall particularly sharp in road accident cases. Claims for accidents at work are at their lowest level since records began in 2000, and road accident cases are at their lowest for nine years. Total claims have fallen every year for the last five years.

The figures also show the reason that people make claims has little to do with the traditional received wisdom that we have a compensation culture because of people making ever increasing numbers of “dodgy” claims, or that “ambulance chasing” no win no fee lawyers are behind it all.

No win no fee arrangements became widespread following a change in the law in 2000. Despite this, claims numbers remained almost static until 2004. Road traffic accident claims pay the least well for solicitors compared to other injury claims, so you would think that if solicitors were encouraging people to make more and more claims, these would have increased from 2004, if anything more than the rise in road accident cases.

In fact the reason for road traffic accident cases increasing from 2004 was because of a change in the law that made sharing the personal details of accident victims profitable, leading to a huge increase in calls, texts and emails encouraging people to make claims. In road accident cases where people report full details of their accidents almost immediately to their own insurer, the nuisance phone calls soon follow. In accidents at work or trips and slips in the street where the victim has no insurance company to report to, they don’t.

The new bill does nothing to address this. It will reduce the number of claims and how much they cost insurers, but only by reducing genuine claims.

Why, you might think, should I care? I don’t make accident claims, so if all this means my car insurance will be £35 less, bring it on.

Which is all fine until it is you who is the one on the receiving end. Lots of people don’t make claims for all sorts of principled reasons, even if they could recover money if they wanted to. But even under the current system with current damages, personal injury claims are not really there to compensate trivial injuries. A few days of a stiff neck isn’t enough to justify making a claim through solicitors as the costs will outweigh the damages. Whiplash claims at the moment are cases involving months or even years of painful symptoms, and often involving the victim being off work and unpaid.

The compensation system is just that: to compensate accident victims, to be called upon when you need it. You pay your insurance premiums for it. What use is it if, when the time comes, it isn’t there for you?

For further information on claiming compensation for an accident please contact our Personal Injury Team on 01733 882800 or email info@hcsolicitors.co.uk .

Author

Richard Moon, Senior Solicitor

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This article has been prepared for general interest and information purposes only; it does not constitute legal advice and should not be relied on as such. While all possible care has been taken in the preparation of this article, no responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by the firm or the authors.