Let’s stop car insurance blame game
Once you’ve finished this article I urge you to buy the Highway Code. Then spend every waking hour reading it, just to avoid ever getting behind the wheel again.
For if you do get in the drivers’ seat and cause a collision with another vehicle, you’re being taken straight to the cleaners. Cancel the kids’ college funds, put those holiday plans on hold and find your local Lidl. Times are about to get tight. We already know there’s a decent chance the party opposite will make a claim for whiplash. The Association of British Insurers is vocal about Britain’s ‘pain in the neck culture’, which sees nearly 1,200 whiplash claims made every day.
There is undoubtedly an issue with accident victims being encouraged by claims management companies (and by implication lawyers) to make claims that don’t have merit, although it’s worth remembering the government that highlights this as a problem is also responsible for regulating those same companies.
But before insurers get too accusatory, consider the findings of the Office of Fair Trading, which yesterday produced a damning assessment of the rising cost of motor insurance.
The headline of the report is that insurance companies are to be sent for further investigation to the Competition Commission.
But what the detail reveals is nothing short of extortion. The OFT is explicit: insurers deliberately choose car hire companies that charge higher daily rates, in exchange for a referral fee of between £250 and £400. Not-at-fault drivers receive replacement vehicles for longer than necessary, further adding to the bill for the person responsible for the accident. There is nothing the at-fault driver can do except watch the claim mount up.
By the end of the process, these practices have added an average £560 to every occasion a replacement vehicle is needed after an accident. Whilst the government remains keen to reduce personal injury claims, rises in car insurance premiums are ‘likely to persist’ whilst insurers continue this racket.
The spin coming from the ABI was mesmerising. Director of general insurance Nick Starling welcomed the report, claiming that ‘for too long insurers have faced inflated rates for credit hire cars and excessive hire periods’. With respect, this is claptrap. Just as with blaming lawyers for paying referral fees, in credit hire it takes two to tango. Insurance companies are as culpable for accepting the referral fees as the hire companies are for paying them.
What’s needed now is a moratorium on blame. Everyone involved in the process, to a lesser or greater extent, is responsible for car insurance hikes. It was refreshing to hear the response of the Motor Accident Solicitors’ Society, which called on ‘insurers, solicitors, government and regulators to stop blaming one another’.
Industries must take their fingers out their ears and admit their role. Denials will only polarise the debate and expose people to ridicule.
Let each group sit together and discuss how to clean up this industry. Only then might it be safe to get behind the wheel again.
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Comments
Thieves and Fraudsters
Very pleased this is getting headlines.
Last year RSA were caught artificially inflating repair estimates by almost 20% by simply inventing a new subsidiary company - http://www.bbc.co.uk/news/business-14946628
How this has stayed off the front page for so long is beyond me!
Fallows v Harkers
Perhaps the Gazette would like to do some digging to find out what has happened since HHJ Platt handed down his judgment in Fallows v Harkers. Has his decision been appealed (see para 64 of the judgment: http://www.bailii.org/ew/cases/Misc/2011/16.html) or has the case been quietly put to bed?
Grab this opportunity.
Me
I can find nothing on the appeals casetracker system. It is worth repeating part of the judgement where the judge slammed RSA and their solicitors for a blatant disregard for the pre-action protocol. Something I have raised many times on this site concerning other types of claims.
Anyway - the judgement seems to provide an excellent example in support of Mr Hyde's comments and the message. The blame game is totally counter productive to all and will continue to expose the participants to ridicule as Mr Hyde has said. As suggested above and something I support, the parties need to now sit down together and work things out.
As I see it, this is an opportunity for someone here to take the initiative. In my view, now is the right time for all the parties. Who will be the first to be brave and forward thinking enough to do this? My guess is whoever does make the first move will take alot of credit and if nothing else will be good PR move. And may I suggest perhaps some sort of coverage on the pages of LSG to push this forward - some more articles perhaps actively promoting an idea of a summit.
Let's be honest - the legal profession, insurers and claims management companies are not flavour of the month with the public and that will only get worse if this carries on. But taking such an initiative in a new constructive, imaginative and non confrontational way would certainly get the approval and earn the respect of many members of the public.
Finally, this issue is just part of a wider problem that I think needs tackling and I have some positive ideas on how the legal profession (and others) can improve their image and get a much fairer hearing than they do now. There is one particular idea which I have been thinking about for some time now and if there anyone in the legal community who feels they can help take it forward I will be happy to share. If done properly and professionally it could be of benefit to all.
Have a nice bank holiday weekend all.
Fallows V Harkers
Costs
"I have already found that there has been an almost complete failure by the claimants to comply with the pre-action protocol and a failure to comply with the order for specific discovery made in this case. Apart from the RSAARL invoice to RSA and despite numerous requests the claimants have only disclosed pre-action a breakdown of charges prepared by RSAARL which by reason of the unexplained VAT discrepancy could not reasonably be accepted at face value.
During the hearing the claimant admitted that there was in existence a proper invoice from DWS to RSAARL which presumably formed the basis for the RSAARL breakdown and which had not been disclosed. I offered Counsel for the claimant a short adjournment to have this document faxed to the court but she declined my invitation saying that she knew what the answer from her solicitors would be.
There has never been any dispute over liability in this case. I have no doubt that if the claimants had complied with their pre-action disclosure obligations this case would have been settled on the terms which I have found to be the true extent of the defendant's liability. The court is left with the clear and unhappy impression that the provisions of CPR r 1.3 have simply passed by RSA and its solicitors unheeded both in this case as in others, and they remain in a mindset where the obligation to make proper disclosure is some kind of optional extra.
Such an attitude stands in sharp contrast to the lofty statement of principle which appears on the RSA website:
"RSA Business principles
Integrity
We will act with openness, fairness, integrity, and diligence. We will always adhere to the applicable laws, regulations and standards in the places that we do business."
The court can only express its disapproval of the behaviour of RSA in terms of costs. This case is on all fours with the recent decision of the Court of Appeal in Abbott v Long [2011] EWCA Civ 874. It is the defendant who has been unnecessarily dragged to court in order to discover the truth without which it was not in a position to make any meaningful offer of settlement. RSA is the true claimant in this case. It has behaved wholly unreasonably in its conduct of this litigation. Accordingly the claimant must pay the Defendant's costs summarily assessed at £672.60".
Disclosure
In the light of paragraph 608(e) of the Code of Conduct of the Bar, I would be interested to know how counsel felt able to continue acting in circumstances where the client and instructing solicitors were refusing to produce an apparently disclosable document. Had the costs been more substantial, I assume that the judge would have demanded a full explanation from the solicitors involved.
RSA
The appeal on the RSA issue is in the case of Coles and others v Hetherton and others [2011] EWHC 2405 and the Judgment from the Commercial Court is now expected at the end of July 2012.
Should be interesting!
Too many personal injury claims adverts
Whether on TV, newspaper on the internet, there are just too many of those personal injury lawyers with a clear message "if you've been injured, we'll get you compensation". So an easy way to make money, right? Hence so many of those crash for cash cases. It's high time to stop this nonsense because at the end of the day, it's our premiums which keep on rising.