Wednesday, 7 August 2013

Hats off to the Transport Select Committee for an insightful and balanced Report

Last week saw the publication of the long-awaited report by the cross-party Transport Select Committee on the cost of motor insurance, and in their deliberations a number of sensible points were made.

As significant as anything, though, was the revelation that the report contained this paragraph:

MPs on the committee were surprised to find that insurers sometimes made an offer to personal injury claimants even before they had received their medical report.

Pre-medical offers are wrong

To this, I would substitute the word 'sometimes' with 'often'. As I have previously mentioned, the practice of pre-medical offers of settlement is both endemic and contrary to the interests of justice. How can it be right that injured people compromise claims without the benefit of legal advice?

The committee took a commendably robust view of this practice, urging insurers to put their house in order and stop it at once. Not least in the committee's thinking was the fact that settling cases without a medical assessment, still less with any legal input, encourages the very things that insurers say they are trying to combat (and which drive up consumers' premiums): fraud and exaggeration.

Cost of motor  insurance: whiplash

Common sense about whiplash

What, though, of whiplash? The committee noted that there is no statistical, verifiable evidence to support the oft heard assertion that "the UK is the whiplash capital of the world". In fact, the committee observed that the number of UK claims for whiplash has fallen; and they are in fact below the level they were 5 years ago.

Moreover, the committee found that there was no authoritative data publically available about the prevalence of fraudulent or exaggerated claims for whiplash injuries. By way of a wider point, the committee recommended that the government ask that the Association of British Insurers provide better data about fraudulent or exaggerated personal injury claims. This step is critical to combat fraud, and long over due.

The committee recommended that the government should not switch whiplash claims to the small claims track, by increasing the small claims court limit. Its reasoning is again sensible: namely that there was a real likelihood that genuine claims would not be brought.

There was further congruity between the government and the committee. The government proposed demanding medical reports from accredited medical experts for whiplash claims - a good idea, and one backed by the committee. This will be particularly powerful in eradicating unmeritorious claims, especially if combined with the committees recommendation that insurers stop making pre medical offers. In addition, the committee suggested claimants should have to prove they saw a medical practitioner shortly after their accident.

Hats off to the committee for some sterling work and balanced common sense, and to the government for having the wisdom to await receipt and give consideration to the Transport Select Committee Report before taking further reform steps.