Insurers today called for disease claims such as for noise-induced hearing loss (NIHL) to be subject to fixed fees amidst warnings that injured people are being failed by the current system.
The Association of British Insurers said the increasing number of hearing loss claims is adding to insurance premiums and holding up the progress of genuine claims.
In a report on what it called the ‘new whiplash’, the ABI said less than one-fifth of the 200,000 NIHL claims submitted since 2012 have been eligible for compensation.
The association says the number of claims has soared as displaced personal injury solicitors attempt to find new work. Its statistics show that the number of new claims rose from 50,000 in 2012 - the year before lower fees were imposed on whiplash claims - to more than 80,000 in 2013.
The report also showed that in 2014 new claims fell back to 70,000.
Nevertheless, insurers have begun lobbying efforts to impose the same conditions on disease claims as on personal injury claims.
The ABI called on the government to extend the fixed-costs regime outside the current claims portal to disease claims – which would capture NIHL. Insurers also want to amend the pre-action protocol to enable multi-defendant disease claims to be settled through the portal.
Finally, it said the government should consider extending the MedCo system of independent whiplash diagnosis panels created this year to claims for NIHL.
James Dalton (pictured), ABI director of general insurance policy, said claims for hearing loss should be falling as health and safety measures improve.
‘The recent spike in claims can only be a result of claimant lawyers spotting the potential to earn sizeable fees from these cases after their sky-high earnings from whiplash claims were reduced,’ he said. ‘The claimant lawyers and claims management firms are intent on exploiting the new source of income which deafness claims represent, irrespective of whether the claims they put forward are genuine.’
The ABI has been joined in its call by the representative body for defendant solicitors, the Forum of Insurance Lawyers (FOIL). Its president Nick Parsons said the proposed reforms were ‘sensible, balanced recommendations’ to move the handling of NIHL claims to a more proportionate regime.
He added: ‘FOIL supports the ABI initiative to ensure that, whilst genuine claims for NIHL are dealt with promptly, the current volume of unjustified and poor-quality claims is tackled effectively, to reduce the huge cost and waste of resource these claims absorb.’
The ABI claims that for every pound paid in compensation to the successful claimant, £3 is paid to their lawyers.