In a sense, I can see where the government is going with the ban on whiplash claims and increasing the small claims limit on all personal injury claims. It is clearly right that fraudulent claims need to be stopped, as they increase insurance premiums and are a canker on the credibility of the claims process.
Likewise, I can see an argument that, in an age when the ordinary small claims threshold is £10,000, maintaining the existing PI threshold begins to look increasingly untenable.
However, as far as the fraudulent claims issue is concerned the insurance industry has only itself to blame. It settles far too many cases which, in reality, are unsustainable. I appreciate the argument that to do so costs less in terms of the individual claim, but adopting a more robust approach would soon drive fraudulent claims out of the system. Such a policy would therefore be cost-effective.
I would also support legislation which provides a criminal penalty for fraudulently articulating a PI claim. The reality is that – at the moment – the risks of making a fraudulent claim are minimal.
The issue with the PI threshold again comes down to the insurance companies. If a private individual makes a claim and puts in a fair amount in respect of their loss, the insurance company’s reaction is to try to push you into accepting less. I had this happen to me. I put in a fair and costed claim for my losses and their immediate reaction was to offer me (exactly) 25% of what I had offered. It was not until I pointed out I was a solicitor and a litigator that they adopted a more reasonable attitude and paid me what I had asked for.
Neither proposal is wholly objectionable but, I fear, the government is entirely too trusting of insurance company ethics. If the industry took proper steps to deal with fraudulent claims and adopted a more reasonable approach to ordinary individuals pursuing claims in person, then I might be persuaded to agree with these proposals. But they won’t, and if lawyers are to be removed from the system these proposals would require some kind of independent authority to assess and value claims whose decision would be binding. The last thing the insurance companies would want is their ability to ‘talk down claims’ removed.
J. Howard Shelley, K.J. Conroy & Co, Birmingham