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The challenging road ahead for whiplash reform

James_Dalton_blogGiving evidence to a Select Committee is always a challenge. And appearing before the Transport Select Committee inquiry in whiplash yesterday afternoon was no exception. In the glare of the media spotlight, politicians ask a whole series of questions designed to test your views.

But although giving evidence isn’t easy, making the case for reform of the UK’s compensation system to ensure genuinely injured whiplash sufferers receive compensation is.

In the UK, one person makes a claim for whiplash every minute, of every hour of every day – well over 500,000 people claim every year. That all of those claims are genuine is simply inconceivable. And for honest motorists, it is all the more galling given that the more than £2 billion cost to insurers of paying those claims adds £90 to the average consumer’s car insurance premium.

Insurers continue to be committed to getting help and support to genuine whiplash sufferers as quickly as possible. But whiplash is like a headache or backache: it is self-reported with no physical evidence of injury. Insurers cannot prove someone does not have whiplash any more than a claimant can prove that they do. So whiplash has become the UK’s fraud of choice for the opportunistic few ready to exploit our compensation culture.

But there is a cure for Britain’s whiplash epidemic. As I argued to the Transport Select Committee yesterday, the Government has made a strong start. It has cracked down on ambulance chasing claims management companies, cut the fat out of the civil litigation system in the form of personal injury solicitors’ fixed legal fees and it has banned referral fees.

The Ministry of Justice has recently consulted on the next stage of what needs to be done. They’ve proposed making the medical evidence used in whiplash claims more robust, more independent and doctors more accountable. And they have proposed increasing the small claims track limit from £1000 (the level at which it was set over twenty years ago) to £5000.

Naturally there has been a howl of protest from the personal injury lawyers who can see that the gravy train of excessive fees may soon hit the buffers. They argue that “access to justice” will be undermined and that lawyers are needed to represent the interests of the claimant.

Yes work will be need to be done to make sure claimants understand their rights in a new system and how they can file a claim. And yes consumers will need to be able to put a value on the injury they have suffered which is why we have argued in favour of a transparent, independently controlled and regulated, software based system to assess general damages awards. But, given time and willing, that shouldn’t be too difficult to deliver.

People are starting to recognise that the claimant’s interest and the interests of the claimant’s lawyer are not the same thing. And more fundamentally, there are questions being asked about the role of personal injury lawyers and when legal advice is most useful to a claimant, in an environment where the policy settings and legal framework strike the right balance, there are no disputes about liability and claimants understand their rights.

Something the Select Committee understood was that high compensation awards added to the high cost of getting that compensation to claimants equals high car insurance premiums. Insurers don’t create the society in which we live. They price the risks that society presents. So it is time we had an open and honest public debate about whether a minor, low-speed shunt in a supermarket car park resulting in a sore neck for a couple of days justifies thousands of pounds in compensation. But it needs to be a grown-up debate: with analysis rather than anecdotes and evidence rather than emotion. Whatever the outcome, insurers will provide the agreed level of compensation to claimants and build that into car insurance premiums.

So making the case for what needs to be done is straight forward. The hard part for the Transport Select Committee is deciding what to do. Will they recommend changing the compensation system to make it more efficient at a lower cost and start the debate about the right level of damages awards? Or will the self-serving arguments of the personal injury lobby win the day?

Time will tell. But when times are tough, everyone who pays their car insurance premium is looking to the Select Committee to take the hard decisions and recommend reform that will benefit everyone. Quite a challenge.

Last updated 29/06/2016