Queen’s speech shows government’s intention to reduce compensation for whiplash
But is there a ‘compensation culture’ at all?
The Queen’s speech was, after some post-election delay, delivered recently and outlined the laws that the government intends to pass in the current parliament.
Alongside all the focus on Brexit, the government revived a plan that was shelved due to the election to crack down on whiplash claims. The law, likely to come into force in October 2018, will reduce compensation in road accidents for whiplash injuries, and extend the scope of the ‘small claims court’ to bigger cases.
This will reduce compensation further still, and not just to road accident victims, because claimants in the small claims court cannot recover solicitor’s costs, so have to pay them out of their damages.
The government’s stated aim is:
“…to crack down on minor, exaggerated and fraudulent soft tissue injury (‘whiplash’) claims stemming from road traffic accidents (RTAs).”
Nobody should have a problem with efforts to reduce exaggerated or fraudulent claims, although how reducing the compensation to everybody does this is a hard question to answer.
‘Cracking down’ on ‘minor’ whiplash injuries is more problematic. These are not the exaggerated or fraudulent ones, they are injuries genuinely suffered by people who have done nothing wrong, and have been physically hurt by motorists who have broken the law. Do they really deserve to be ‘cracked down’ upon?
The government’s announcement comes hard on the heels of this year’s figures released by the Department for Work and Pensions (DWP) on the number of personal injury claims being made. Whenever someone makes a personal injury claim, in almost every case the insurer or whoever is defending the case must register the claim with the DWP so the DWP can claim back from the insurer any state benefits paid to the victim because of the accident. This makes the DWP figures the best available for the number of compensation claims being made.
The figures have been published by the DWP since 2000, which coincides with the time when solicitors in the UK first started using so-called ‘no win-no fee’ agreements in significant numbers. Throughout that time, it has been a kind of received wisdom that the country is in the grip of a compensation culture, fuelled by ‘no win-no fee cowboys’. Back in 2004, then Shadow Home Secretary (and now Brexit Secretary) David Davis pledged that the Conservatives, if elected, would cut out, “...the cancer of litigation”.
What amounts to a ‘compensation culture’ is difficult to pin down. Does it just mean people making up or exaggerating claims and ‘having a go’, protected by no win-no fee lawyers? Does it mean that people are making genuine claims, but that in some past golden age they would have showed a stiff upper lip and a bit more British fighting spirit?
Well despite what you might have been told, things don’t appear to be out of control.
Claims for road accidents were up by 1.2% on last year. Employers’ liability claims – accidents at work and industrial diseases – were down 15.2% to 73,355 cases, the lowest level ever recorded. Public liability cases – things like tripping on pavements, slipping in shops or accidents to children in schools – were down 7.8%, only just above their lowest recorded level in 2007/8. Clinical negligence claims were virtually unchanged, with one fewer case recorded this year compared to last.
There was a notable rise in cases categorised as 'other' from 11,388 last year to 20,047 this year. These are non-categorised cases and by its nature it is difficult to guess what these ‘other’ cases might be, although there is a lot of effort currently by insurers and travel companies to publicise stories about claims for holiday illnesses, which seem to be earmarked as their next big target after whiplash.
In total, claims overall were down this year a little, by 2,508 cases.
When one looks at the history of the figures going back to 2000, there is really little evidence of what most people would regard as an ever-growing compensation culture.
All Other Claims include: Public Liability, Employer’s Liability, Clinical Negligence, Other non categorised claims and all non RTA’s.
There has been a rise in road accident claims up to about five years ago, but with numbers slowly declining since then. Other claims have declined, roughly halving from their peak around 2004, and remaining at a steady level ever since.
The rise in road accident claims has been significant, but why is that? No win-no fee agreements are available across the board, and there is no more reason why someone would make up or exaggerate an injury from a car accident than they would from an accident at work or a fall in the street. Non-road accident claims have fallen, not risen.
The reason for the rise in road accident claims is not people trying to pull a fast one, or lawyers offering no win-no fee. It is much more likely to arise from the extent to which the details of those involved in car accidents are made available to all sorts of insurance companies, claims management companies and telephone marketers.
Incidentally, there is one final set of figures that stands out in the DWP’s update. When a claim is settled, if the injured person has claimed state benefits (which is quite likely if the injury is serious, and for example they have time off work or have become disabled) the government can, in effect, bill the defendant’s insurer for the benefits bill. The NHS can also recover some of its costs of providing emergency medical treatment.
If people don’t – or can’t – bring a compensation claim, the government can’t get its money back. Between 2010/11 and 2016/17 the DWP recovered £927m for the taxpayer.
To find out more about how you can make a potential claim for an accident you were injured in please contact our Personal Injury team. Our claims are provided on a No Win No Fee basis and we offer a free initial claim consultation with one of our dedicated Personal Injury lawyers.
Contact us today on: 01733 882800 or email on: email@example.com.
Richard Moon, Senior Solictor
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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.