Whiplash reform: riding roughshod over the injured person?

Whiplash is in the news - in a good way, so far as the government and insurers are concerned. Wednesday saw the publication of the government's response to what some might say was a pejoratively entitled consultation: "Reducing the number and costs of whiplash claims". A number of reforms tailored to this apparently noble end are proposed. The result was a welter of media headlines which will have warmed the hearts of members of the Association of British Insurers.

Fleet Street seems to have swallowed the spin that says either that whiplash doesn't exist, or, if it does, that it is always exaggerated by an unholy alliance of unscrupulous personal injury lawyers and claimants on the make. Hence, then, the congratulatory flavour of yesterday's coverage, as editors chose to praise Justice Secretary Chris Grayling for bravely tackling the scourge of fraudulent whiplash claims, those which drive up the cost of insurance premiums, penalise honest drivers and contribute to the dread, if factually dubious, 'compensation culture'.

The devil is in the detail

But what, though, is the true impact of the reforms?

First up, the government says it wants "an improved, robust system for medical examinations and reporting which will ensure those who make unnecessary, exaggerated or fraudulent claims are deterred from doing so, and that the genuinely injured get the help they need." It therefore intends to introduce independent medical panels, to which claimants will have to submit before a claim can be made. This is sensible, in principle, but it has a flaw: a panel inevitably restricts choice. Better would surely be the creation of a register of accredited medical experts so that the injured person, like any other litigant, can choose his or her expert. There are other questions, too, such as who will control the panel, how its members are vetted, and what sort of appeal process will be set up. 'Independent', rather than funded and administered by the ABI, is key - and the devil is in the detail.

Time to consider ending pre-medical offers to settle

Pleasingly, the government says it will tackle a fundamental problem which has long gone under the radar: the practice conducted of settling cases without a medical report. However, there is a further and associated problem, where a representative of an insurer contacts a person who has been in an accident and offers them a cash settlement, 'to avoid the time, cost and hassle of going to solicitors'. The practice is inimical to justice - it means an injured person is being bought off, without the benefit of specialist legal advice - but it also contributes to the very vicious circle that the ABI and its members lament. Where someone is confronted by someone on the end of the phone offering money for a soft-tissue injury (which may be the extent of an individual’s injury), there will be people who will be only too tempted to pocket the money and run.

This, the practice of pre-medical offers to settle, is a very common insurer practice. Today, as you read this, an insurer will be seeking to buy off a claim before a lawyer ever sees it. During the consultation on whiplash it was notable that many MPs were wholly unaware of this egregious practice. Now that they are, they propose it must be stopped (see the All party parliamentary transport committee's recent report). The government's statement of intent is laudable but it must not be forgotten. We cannot allow a new culture to arise, whereby insurers add avoiding 'the time and hassle of having to get a medical report' into their armoury of tactics to see off claims.

The small claims court limit must not be raised

There is much to comment on in yesterday's announcement, but ultimately it all comes down to justice. Anyone who has ever suffered whiplash knows that it is real, and painful, and debilitating. Why should the insurance industry avoid paying for it, when an injured person suffers through no fault of his own? For avoidance seems to be the name of the game - hence the government's much more worrying statement of intent, that in due course the threshold for small claims court personal injury claims will rise from £1,000 to £5,000. The average whiplash claim sees damages of between £3,000 and £3,500. It is clear that raising the small claims court limit to £5,000 will have a major impact on whiplash claims. With legal costs being irrecoverable, they will, for the most part, be uneconomical. The net result will be that they will disappear.

This would be great news for the ABI, but it takes no heed of the person we should be worried about: the injured accident victim. Having just overhauled our civil justice system in the most radical and comprehensive way for more than a decade, there is no call to change the small claims court limit - and there is every reason to get the reforms proposed on Wednesday 100 per cent right.

A Spotlight on 'Compensation Culture'

The case of Baljinder Kaur Gill, who was killed in a staged crash-for-cash accident, shines a light on the reality of the so-called 'compensation culture'.

Here we have a tragic incident in which perpetrators of a criminal enterprise have justly been given lengthy custodial sentences. Four men - Radoslaw Bielawski, Jacek Kowalczyk, Andrzez Skowron and Artur Okrutny - concocted a plan which would see a VW Passat and an Audi A3 collide with an innocent Ford Transit van on the A40 in Buckinghamshire. Their intention was to claim personal injury compensation.

A Disgraceful Scheme
The men put their plan into operation on the evening of 11 June, 2011 - to disastrous effect. Gill, 34, died when her Ford Fiesta, which had been hit by one of the men's vehicles, was hit again by a Renault Trafic van. Her car had been stationary in the fast lane of the A40 after she had been unable to avoid crashing into the Ford Transit van, whose experienced driver had commendably managed to avoid hitting the men’s vehicles. Ms Gill left her car with its hazard lights flashing but returned to retrieve some possessions. Her car was then hit by the Renault van in what Reading Crown Court heard was "an explosion of metal, glass and dust". Ms Gill was fatally injured at the scene.

The men stood to gain £20,000, having targeted the Transit van because they knew it would have valid insurance. Their ill-conceived and disgraceful scheme caused harm not only to Ms Gill. Probably because of 'rubber-necking', there was a pile-up on the opposite carriageway. It left another person seriously injured.

Just Sentences
Bielawski, 24 and Kowalczyk, 32 were both jailed for a total of 10 years and three months for conspiracy to commit fraud, causing death by dangerous driving and conspiracy to pervert the cause of justice. Skowron, 25 who was to be paid an undisclosed fee for taking part in the scam, was jailed for 10 years. Okrutny, 23 who was to be paid £300, was not present at the crashes but was jailed for 12 months.

Mr Justice Sweeney was right to pass stringent sentences on the men, in what he noted was "the first such enterprise to result in a death to come before the courts".

Every right-thinking person would understand and most would welcome the sentences, and applaud the investigative work of the police.

I hope we can rid society of this evil. This case demonstrates that fraudulent activity exists, just as  the ensuing  tragedy shows just how terrible the full consequences can be. But I also hope that those who maintain that we inhabit a world in which spurious claim follows spurious claim will take stock and pause for thought.

Time for a Common Sense look at 'Compensation Culture'
Back in 2005, Tony Blair gave a speech in which he called for "common sense culture, not compensation culture". In a sound-bite quickly picked up by the media, Blair said: "Public bodies, in fear of litigation, act in highly risk-averse and peculiar ways. We have had a local authority removing hanging baskets for fear that they might fall on someone's head, even though no such accident had occurred in the 18 years they had been hanging there."

Blair helped set in train a backlash against a fundamental tenet of tort law: that the claimant should, if he or she has proved negligence and causation, and if the resultant damage is not too remote, be placed in the position he or she would have been in had the accident or injury not occurred. Ever since, the media has delighted in stories of absurd claims supposedly brought by solicitors acting unethically and claimants on the make.

The truth is otherwise. The vast majority of claimants are honest  and their solicitors continue to adhere to the basic principles of tort law: if someone has been injured, they take up the cudgels on that person's behalf and seek redress, which as a matter of law is always intended to restore the position and no more .

It is right that our democracy allows this to happen. It is a sign that we are civilized, and that we care. Those who may need to bring claims arising from the collateral damage in the Gill case should not fear obstruction by insurers or vilification by third parties who insist they're making the most of their misfortune. They should be emboldened in their conviction that they are entitled to right the wrongs inflicted on them.

The fact is that the men behind the appalling events that led to Baljinder Gill's case are those who truly represent Britain's 'compensation culture'. Common sense condemns them - and gives thanks for a developed judicial system that allows victims to bring claims, when to do so is right.

Thoughts on whiplash on the eve of the Expert Witness Institute conference

Tomorrow I will be attending the Expert Witness Institute (EWI) Annual Conference at Church House Conference Centre in the heart of Westminster. This year’s Conference is themed around the implementation of Lord Jackson’s reforms in April 2013. The reforms have long been in the offing, and it’s no exaggeration to bill them – as do the EWI event organisers – the ‘Big Bang’. Lord Faulks QC’s ‘view from the House of Lords’ of the reforms should be particularly interesting.

But if April 2013 is set to yield seismic changes to the civil litigation landscape, I hope that the same isn’t true when it comes to our treatment and sympathy for whiplash injuries. As I have noted before, an unruly bandwagon is being piloted by an alliance of insurers, government and certain newspapers to convince us that whiplash is an invented condition. If the bandwagon isn’t stopped, it will career into whiplash victims and ruin their ability to obtain redress.

I hope to raise this issue at the conference, especially when I join EWI director Nick Addyman, EWI fellow Dr Keith Rix and Brian Gardner FRCS in a ‘medical breakout’ session. We’ll be debating topics dear to our hearts; the prejudice against whiplash is certainly one of mine.

However, before reiterating some of my beliefs about whiplash, perhaps I should first make clear that there is common ground here. I and other claimant PI lawyers agree with insurers that there is an opportunity for fraud in the current system. So, too, do we agree that fraud contributes to the rising cost of motor insurance. We also welcome the government’s wider interest in the motor industry and the myriad of factors that could contribute to lowering the cost of motor insurance, including education, training and monitoring for new and young drivers. 

But the myth that whiplash is not a genuine injury has got to be scotched. Whiplash is real and there is a wealth of evidence that demonstrates its potentially debilitating impact and long-term consequences.  The government’s proposal to increase the small claims limit in personal injury cases from £1,000 to £5,000 cannot but have a devastating effect on whiplash victims. It should be remembered that this idea was consulted on at length and rejected by the Ministry of Justice on the grounds that it would stop genuine accident victims from receiving justice.

Moreover, reducing legal fees to an artificially low level – as is also mooted – may have the unintended consequence of lowering the quality and standard of representation in whiplash cases. It could also lead to legitimate claimants having to fight for compensation without legal representation, therefore eroding access to justice.

Finally, imposing an arbitrary accident speed (e.g. 15 miles per hour) below which a claim cannot be made has little medical foundation, as serious injuries can occur even in low speed collisions. In addition, satellite litigation and unnecessary costs may be generated by arguments over evidence of exact speeds. One can well imagine endless and costly debate over whether a claimant was driving at 15mph or at 14mph. Technology such as telematics could have a role in reducing fraud and bringing down the cost of motor insurance in the future, but it is not a panacea. These schemes are currently unproven and cannot be relied upon as an absolute measure when all circumstances and individuals are different.

So much for the laments. Do we, I hear you ask, have any solutions? We do. Take a look at the 10-point plan for eliminating fraud produced by the Association of Personal Injury Lawyers. Some of APIL’s ideas overlap with mine, which appear below:

• There needs to be better co-operation between all affected parties to clean up the sector. We need a holistic approach involving government, insurers, the car industry, accident victims, medical professionals and legal professionals.
• There should be compulsory medical examinations. No whiplash claim should be settled without a medical examination. In other words: no medical, no damages. This would help to reduce fraudulent or exaggerated claims.
• There must be robust regulation of claims management organisations. This would reduce the negative impact they have on the industry.
• Better enforcement of data protection legislation is desperately needed. This would prevent the misuse of customer data, which concerns consumers and brings the industry into disrepute. It would also curtail the use of unsolicited marketing to encourage people to take up fraudulent or exaggerated claims.
• Better regulation of insurance companies is needed to stop sharp practices such as third party capture (pressuring claimants to settle before the case has been fully considered).
• The sector needs to work with medical organisations to develop better knowledge and understanding of what soft tissue injuries can be caused by motor accidents and to ensure that medical examinations and reports are substantive and objective.
• There must be continued improvement in vehicle safety to reduce and prevent head and neck injuries.

I’d be delighted to discuss any of this at tomorrow’s conference, or via comments to this blog.

Post-Chicago Musings

Last week my first overseas blog appeared. It came all the way from Chicago, Illinois, where I was attending the American Association for Justice annual convention. This week’s blog again has an American flavour, as I reflect on lessons learnt during my stay at the Chicago Hilton, where the conference was held.

I’d like to add to the two general points I made last week (that wherever one finds oneself in the world, claimant lawyers are engaged in an adversarial battle with insurers, and that claimant lawyers here and in America seem to be up against a legislative drive to reduce or cap the costs they can recover). In a sense, what I am going to say is also a general observation, but nevertheless I think it’s an important one.

Put simply, I think that rather than knocking the American litigation landscape we should look at it objectively and ask if it has a thing or two to teach us. I think it does, for reasons I will explain.

The British tendency is to categorise American lawyers as ambulance chasers (or worse). Our press regularly skews coverage of American legal proceedings to paint a picture of a system in which pre-trial jury selection is bizarre, and where US lawyers habitually exaggerate or even invent claims. But while there is rarely ever smoke without fire – some claims about the excesses of American lawyers are undoubtedly true – if you scratch a little deeper there is much to be said in favour of the American way.

The main reason I say this is because the American system is underpinned by a belief that the client comes first. An American claimant who secures recompense for an injury is not condemned as being part of a ‘compensation culture’. Instead, it is accepted and understood that a claimant’s lawyer will do everything in his or her power to gain as much as is properly due for a client. The client’s needs come first, which means that no stone is left unturned in the preparation of a case. Yes, this dovetails with a financial incentive for the lawyer involved, but in America there is recognition that lawyers have businesses to run. That they might make a profit is not viewed as something wrong and unpalatable.

Contrast the way in which civil litigation has developed in Britain – and the way it is heading. Recent years have seen successive reforms which, put together, make it harder and harder for British solicitors to represent clients to the best of their ability. There is a sense, here, that lawyers who make a decent living are somehow ‘evil’, that they fuel the ‘compensation culture’ which is so hated by the government.  This also leads to a very worrying knock-on effect for clients potentially, in creating an environment in which early settlement, at a fraction of what a client could have obtained in damages, will be become difficult to resist. There is some statistical  evidence of this which has recently been presented to the Ministry of Justice by Professor Fenn.

The emphasis, here, is on getting rid of claims quickly, at low cost. In America, the focus is on getting the right result. Here, the beneficiaries of the system can be insurers; in the States, the client’s case is the main thing, and is never or at least rarely sacrificed..

Doubtless there are issues with the American personal injury system. As I say, the point I am making is a general one. Likewise, the way we do things here is not all bad. But my trip to America reminded me of the real role of the personal injury lawyer: to serve injured people. I think we would all do well to remember this rather than uncritically accept governmental  soundings off about the ‘compensation culture’.

Or, put another way, if you were the victim of a serious accident, through no fault of your own, would you rather obtain the maximum compensation to which you were entitled – or settle the case early so that the insurers didn’t have to make a hefty payout?

Pain: all in the mind?

The Supreme Court’s recent judgment in Fairclough Homes Ltd v Summers has been described as “disappointing” to insurers. See, for example, this article from Insurance Insight. The ruling in the Summers case is being billed as a blow to the insurance industry’s fight against insurance fraud.

But before the usual suspects clamber aboard the bandwagon and start lamenting Britain’s ‘compensation culture’, it’s worth taking a look at the facts of the case and generating debate about a key facet of personal injury law: the nature of pain.

Mr Summers suffered an injury at work in May 2003. It was a serious injury, described in the Supreme Court’s summary as being “serious fractures which required at least two operations”. Summers sued, and submitted a schedule of loss. It claimed damages of £838,616 including a claim for loss of earnings up to October 2008.

However, between October 2007 and September 2008 the Appellant subjected Summers to undercover surveillance. The result was to reveal that he was exaggerating the effect of his injuries and his incapacity for work.

Ultimately, the court held that Summers was entitled to compensation for loss of earnings for the period from the date of the accident to 30 June 2007. The judge also awarded general damages of £18,500 and damages for additional care and assistance. The total award was £88,716.76.

Fairclough Homes’ insurer (Zurich) appealed, contending that the entire claim should be struck out because it was “substantially fraudulent”. Ultimately, the matter came before the Supreme Court in April, and judgment was handed down at the end of June. The Supreme Court allowed Summers to hold onto the £88,716.76, albeit that it concluded that it did have jurisdiction to strike out the claim as an abuse of process.

This issue, as a matter of law, was delicate, given the authority of the Court of Appeal case Ul-Haq v Shah. This case established that there is an invariable rule that a person cannot be deprived of a judgment for damages to which he is otherwise entitled on the ground that he is guilty of an abuse of process. The principles in Ul-Haq were restated by the Court of Appeal in Widlake v BAA. However, the Supreme Court found that the Civil Procedure Rules countervailed this, albeit that “as a matter of principle the court should only exercise this power [to strike out as an abuse of process] in very exceptional circumstances”.

Those circumstances were evidently not met in Fairclough v Summers, but the case raises an important tangential issue, namely: how do we measure pain? I make no comment on the facts of Summers, but I have encountered many cases over the years in which the claimant’s perception of pain differs widely from that which objective analysis might conclude to be reasonable.

The point, when it comes to assessing compensation for pain and suffering, is that a range of factors need to be considered. There is the question of physical trauma and its extent, which the medical profession describes as ‘biomedicial’ or ‘biophysical’ factors. Then there are psychological factors. These may include a person’s character, past experience, mood, attitude to life and beliefs.

Then there is what is known as ‘pain behaviour’. This is what a person does in response to pain. Some people take themselves to a doctor if they twist an ankle; others ignore it and soldier on. Pain behaviour is also a product of psychological and environmental conditioning.

There are so many complex variables when it comes to pain and trauma that it is impossible to adopt a ‘one size fits all’ remedy. What is crucial is that the courts and insurers understand that a claimant may appear to exaggerate symptoms, when compared to someone else who suffered the same injury, but that the exaggeration may be wholly honest. In other words, it is the individual claimant’s response to the accident that matters.

In the Summers case there was clearly an element of malingering and dishonest exaggeration. But rather than lamenting the Supreme Court’s ruling as injurious to the insurance industry, we should instead take the opportunity to debate how best to ensure that each victim is compensated for pain – remembering that one person’s stiff upper lip is another’s trip to hospital. 

Praise Be: the OFT has a go at Backhander Britain

At last, a breath of fresh air in the debate about the insurance industry. It came last week in the form of the Office of Fair Trading’s report on private motor insurance. Make no mistake: for those of us who have been banging the drum for reform, the OFT’s report was just what the doctor ordered, all the more so because it came in the midst of a barrage of spin about supposedly bogus whiplash claims and their dire effect on motorists’ premiums.

But the OFT report is not merely welcome because of its timing. Its clarity and sense are as impressive as its provisional decision to refer what it describes as the “dysfunctional” UK market in private motor insurance to the Competition Commission for full investigation. Transport Committee chair Louise Ellman applauded the report, describing it as “a major step forward” and declaring that the Committee ought to engage in the ensuing consultation process with a view to making “the strongest possible case for the referral”.

It is to be hoped that referral duly comes to pass. The insurance industry has mutated into an industry where profiteering sometimes seems to be the insurers’ sole motivation. Karl Tonks, the chairman of the Association of Personal Injury Lawyers (APIL) summed up this highly regrettable state of affairs:  “What the OFT calls ‘dysfunctional’ and ‘inefficient’ actually reveals a host of grubby practices to line insurers’ own pockets, to the tune of an extra £225 million on car insurance premiums last year.”

This is the truth that the insurance industry dare not allow to be uttered. Premiums keep rising and insurers blame everyone but themselves for what is happening. The reality is that real change – to the consumer’s benefit – entails a root and branch reappraisal of how the insurance industry operates. This, in turn, entails confronting the unpalatable fact that here, in a core service sector which affects us all, backhander Britain is alive and well.

Thankfully, the OFT report begins the process of tackling this. It reveals the shoddy practices that those of us who practise in this area see all too often, including the ramping up of repair costs and the charge of hiring replacement vehicles. In effect, insurers collude with vehicle hire companies and repairers (for example, paint and car parts suppliers) to inflate charges, and why? Because they’re in for kickbacks – and because higher costs for a claim will help to dent a rival’s profitability.

The OFT report is welcome, but any investigation by the Competition Commission won’t begin until autumn and may then take up to two years. Why not, in the interim, a voluntary abolition across the board of the insurer practices uncovered by the OFT?

We can be justly proud of Queen Elizabeth II and last weekend’s Royal Jubilee, but Backhander Britain is not something to proud of. Hats off to the OFT for lending significant authority to those of us who’ve had enough.

Time for compromise and understanding

Yesterday I chaired a conference entitled ‘Whiplash: The Evidence’. It was hosted by the Association of Personal Injury Lawyers (APIL), of which I am a Fellow, and took place at the Grange City Hotel, near the Tower of London.

The Tower is well-known for having a bloodthirsty history, but I was surprised to learn that the Grange City Hotel has also hosted amateur boxing events. Perhaps some of the bouts even happened in the same room set aside for APIL yesterday – a strange thought.

But then again, perhaps a sense of conflict lurking in the margins was appropriate, for when it comes to the ongoing debate about whiplash it seems that polarised views have been taken and battle engaged. Or, to use a boxing metaphor, the two sides have not only laced up their gloves but have climbed through the ropes and now find themselves bloodied but still standing in the mid-point of a particularly savage fight.

My hope, after yesterday’s conference, is that the hostilities cease. The two sides – insurers and government on one side, with claimant solicitors and medical experts on the other – need to forge a dialogue and start working together to resolve the problems of a system that has become dysfunctional. Nothing is ever gained by rushing through reform; change needs to be holistic and sensibly considered. It is not too late for this to happen even in an area as controversial as whiplash.

In the hope that compromise between the two combatants can be found I suggested yesterday that solicitors should hold their hands up and acknowledge that there are problems in our profession. That there are problems is, after all, no secret. Some solicitors have forgotten the standards they should adhere to, others think more of their profits than their clients. We need to commit to the Benson principles – about which I have written here before – and agree to robust regulation by a regulator which enforces professional standards and has the tools and inclination to punish those who transgress. A robust regulator will help to stamp out the various other maladies which dog our profession – cold calling, advertising which incites litigation, and conflicts of interest.

If the legal profession is prepared to hold out an olive branch, I hope it will be reciprocated by the insurance industry – and prove to be a prompt for a united approach to reform in this sector. This, of course, would entail the insurance industry accepting that it needs to put its house in order, too. Many practices need to change, not least calling injured parties and convincing them to settle (with no medical assessment and no legal representation), then chalking up the resulting under-settled cases as ‘whiplash’ claims. We then need to ensure that the drive to ‘reform’ is slowed down and properly managed. At present, the bandwagon is pushing for the introduction of insurer-driven changes to the RTA portal and small claims court by April 2013. This is clearly wrong.

Reforms that I would like to see the insurers accept can be succinctly summarised. No personal injury claim should ever be settled without supporting medical evidence – or legal representation. If this were agreed I have a strong suspicion that the ‘whiplash epidemic’ would soon start to abate. Next, we need to upskill our understanding of whiplash as an injury. There needs to be consistency across all cases, informed by the necessary biopsychosocial model. There also needs to be better data sharing. Insurers need to share IFB data with claimant representatives. By sharing this information we can identify patterns of claiming and ensure improved fraud prevention.

Add to this a commitment by insurers to pass on costs to motor policy purchasers via a simple percentage mechanism where claims costs reduction equate to reduced premiums and we will have a system with less fraud, less costs and increased fairness.

Isn’t that worth striving for?

I hope so. Here’s to less by way of pugilism by the opposing sides and more consensus, understanding and compromise.

Whiplash reform: slanted to the insurance industry’s benefit

I was delighted to see that The Lawyer published my blog from last week, in which I criticised the bandwagon to dismiss whiplash. Delighted, yes, but despite some welcome extra publicity I do not feel that it is right to leave this issue alone.

The fact is that the government’s drive to ‘reform’ the way that whiplash claims are dealt with will leave anyone who has suffered a genuine injury feeling guilty if they make a claim, or, worse, unable even to make a claim in the first place. But what is even more worrying is the way in which the statements like that of Jack Straw, writing in The Times last week, are uncritically accepted.

Do a google search of ‘whiplash reforms’ and the newspaper headlines that come up are almost all slanted in favour of insurers, as if to accept, without any analysis, Straw’s statement in his Times piece: “Everyone I’ve met in the whiplash industry knows that they’ve been rumbled; that the game is nearly up.” The Labour MP for Blackburn wrote of his pleasure at “ministers’ determination tackle this issue”, in terms that were as pejorative as they were wrong. Whiplash claims apparently depend on “very flaky medical evidence submitted by practitioners with a vested interest”. It is supposedly “too easy to establish liability in whiplash claims”. All in all, they amount to “scandal” which only Parliament can put right. No surprise, then, that Mr Straw cites a book whose very title shows that it is likely to be biased rather than objective: Whiplash and Other Useful Injuries, by Andrew Malleson.

But talk to informed claimant solicitors, GPs and medico-legal experts who deal regularly with whiplash caused injury and you will find a very different view. For those of us at the coalface – for those of us who deal with the reality of the person whose neck has suffered real trauma in a road accident, through no fault of their own – whiplash is a real and debilitating condition. What surprises me, in newspaper coverage of the issue, is the way that journalists seem to accept that whiplash is inevitably ‘bogus’. Why is this? And do the journalists promoting  this line not understand that in doing so they are championing big business rather than the man in the street?

It is all very well for the likes of Jack Straw and other opponents of whiplash to say that it is driving up the cost of motor insurance premiums. But does anyone really think that insurers will suddenly drop the cost of those premiums if and when the government makes it all but impossible to bring a claim for low velocity whiplash incidents?

An oft-ignored fact gives the lie to this: since the introduction of the road traffic accident portal in 2010, insurance premiums have, according to the insurers analysis, been increasing above the rate of inflation. This is despite some  estimate  £500m in legal costs being  saved by the insurance industry since the establishment of the portal. That being the case, how can we seriously believe that insurers will pass on costs savings to motorists as a consequence of so-called ‘reforms’ to whiplash claims?

Past experience tells us its not guaranteed. The real scandal is not that people make claims for whiplash but that so few people (and certainly, no one in government) are prepared to peel away the layers in this debate and confront the truth: reforms to whiplash are geared to insurers’ benefit.

The whiplash bandwagon is careening out of control

Once again the whiplash bandwagon has rolled into town – and once again plenty of people have hopped aboard. As Transport Secretary Justice Greening and Justice Secretary Kenneth Clarke are expected to announce whiplash claims reforms today, at what is the second summit of motor insurers in Whitehall (the first was held on 14 February, with no less a host than David Cameron), the great, the good and the not-especially-well-informed have sought to make their views on whiplash known.

Speaking before the summit, Justice Minister Jonathan Djanogly told the Radio 4’s Today programme: “I think that people do suffer from neck injuries and that it’s important to have a compensation system that allows valid claims to go through. But I do think, when we hear that there is an average of 2.7 whiplash claims for every accident in this country, that the system is being misused.”

Mr Djanogly went on to articulate the government’s view: that all claims for whiplash should go before independent panels of doctors. “At the moment they are normally referred to the claims managers’ panels of doctors,” he said. “We also think we need to have tougher guidelines over doctors’ diagnosis of whiplash in the first place.”

The AA was quick to wade into the debate. It declared that reform of the injury claim system “cannot come soon enough”. Simon Douglas, director of AA Insurance, said: "I hope that today's Government announcement will see a tight timescale applied to reform of the civil litigation which, at present, encourages people to make a claim regardless of how serious their injury is or even if they have not suffered injury at all."

While Douglas also called for a clamp down on cold-call claims management and personal injury firms (and, into the bargain, noted that the present system was “dysfunctional”) the essential thrust of his comments was to echo the government’s oft-enunciated, always unthinking line about “compensation culture”. Clarke himself happily took up the baton, to declaim that: “It is scandalous that we have a system where it is cheaper for insurers to settle a spurious whiplash claim out of court than defend it, creating rocketing insurance premiums for honest drivers.”

In fact, what is truly scandalous is the absence of any will on behalf of the government to entertain a serious debate about whiplash. The received wisdom is to assume that whiplash is fabricated, that anyone making a claim for compensation is inevitably a fraudster. This is a grave slur on the majority of people who are unfortunate enough to suffer whiplash in a motor accident. It could be scotched if the government were to invite solicitors who represent whiplash victims to attend today’s summit, and others like it, but instead the government seeks only to discuss the matter with those who have a vested interest in annulling, as much as possible, the chance of anyone bringing a claim.

More to the point, there are those on the government’s badly piloted bandwagon who contend that whiplash claims should be barred where the impact occurs below a certain velocity. This again is wrong. Although the person experiencing whiplash in such circumstances – for example, when stationary in traffic and ‘rear-ended’ by another vehicle – may not have overt signs of injury, the possibility of soft tissue damage to the overstretched ligaments of the neck has been well documented. So, too, is there an increasing array of cutting edge medical analysis to the effect that the psychological effect of such an accident may be sufficient to create the symptoms of whiplash.

But from a lawyer’s perspective, there is a fundamental issue of basic negligence law. At law school we learn of the ‘eggshell skull principle’. This means that a person committing a wrong must take his or her victim as they’re found. If, then, a victim is extra vulnerable – perhaps because of a pre-existing medical condition, such as an operation to the cervical spine which sees fusion of miscreant discs – then the wrongdoer has to account for harm that might not ordinarily have been foreseen. 

The government’s endeavours to introduce a velocity threshold would do away with the eggshell skull principle – itself a legal doctrine that has held water for over a century. The idea is emblematic of the wrong-headed approach currently being taken to the issue of whiplash, and it is yet more evident when we stop and remember that the current system already allows for the appointment of independent medical experts to assess the veracity of whiplash claims.

The whiplash bandwagon is in danger of being driven so badly that accident victims have little or no chance of redress. That may be good news for the insurance industry – and the many government ministers who have a financial stake in it – but it’s a poor return for the man in the street.

Out of focus over Autofocus

The Autofocus story is remarkable – and salutary. For the best part of a decade the motoring consultancy was riding high, retained by insurance companies to challenge the cost of replacement hire cars for accident and crash victims. Then, in 2010, the Autofocus bubble burst. The business collapsed, going into administration in the wake of serious claims about serial wrongdoing.

It was alleged that reports produced by Autofocus were skewed in favour of insurers. The company’s ‘rate surveyors’, whose task it was to compare hire rates to assess whether a specific charge was fair and reasonable, are said to have routinely fabricated and manipulated their reports.

The reports were used successfully in more than 4,000 contested court cases, and also formed the basis for thousands of out-of-court settlements. But now, less than two years after the demise as a going concern of Autofocus, the Attorney-General has reportedly referred the matter to the Crown Prosecution Service. According to a piece in The Times this week, it is now expected that the City of London Police’s fraud unit will be notified of the case – and that fraud charges may well ensue.

A case of contempt?

That’s not all. It transpires that the Attorney General’s office is also considering charges of contempt of court against seven former Autofocus staff. No wonder, then, that Lord Justice Moses announced that he was “flabbergasted” by the allegations, which, if proven, he said represented “industrial-scale perjury” and a “serious conspiracy”.

His Lordship is absolutely right. There are indications that the alleged corruption at Autofocus may have been on an industrial scale and that it involved numerous industry players from nearly every facet of the motor accident system. If true, the case would be indicative of the widespread and systemic moral decay which has been facilitated by the departure from the professional principles articulated by Lord Benson and a perpetual drive towards profit to the detriment of everyone else – including consumers and those involved in accidents.

What, though, can be done? How do we right the wrongs that proliferate in the motor accident system?

LASPO doesn’t go far enough

A glance at the Legal Aid Sentencing and Punishment of Offenders Bill (LASPO), which is currently wending its way to legislative approval, reveals that it offers little in the way of regulation or control of ancillary services in the personal injury sector. Autofocus, of course, was an example of one such ancillary service, and a great many of them have sprung up. The worrying fact is, therefore, that Autofocus represents the tip of the iceberg in relation to unethical and even illegal practices, precisely because it, like all the others, is unregulated. A robust but fair and appropriate regulatory authority which adopts a practical approach, backed by legislation designed to close the various loopholes which are exploited by these companies, is needed to improve the current system. LASPO needs to be rethought with this in mind.

Another example of systemic failure is the unregulated insurer practice of ‘third party capture’ which seeks to settle claims directly with motor accident victims without any mandatory protection for the motorist around their access to independent legal advice. This is another example of the dysfunction in the motor accident system. There is strong circumstantial evidence that this has led to claims being made which would never have been brought had the insurers not made an unsolicited offer.

To return to Autofocus, we should recall that among the insurance companies relying upon its reports are household names. There is no suggestion that they colluded with Autofocus, and we should recall that Autofocus has yet to put its side of the story. But nevertheless, whatever the truth of the Autofocus allegations, the clamour for holistic change rather than a piecemeal approach to the ills of the motor accident system is deafening. We ignore it at our peril. 

Technology is not a panacea for whiplash claims

Last week a press release from ‘pay-as-you-drive telematics-based car insurer Coverbox’ landed in my inbox. Its first line gave me pause for thought:

Technology which can measure the level of impact in traffic accidents – and help determine the likelihood of whiplash injuries – is already installed in thousands of vehicles insured by pay-as-you-drive telematics-based car insurers.

The press release was issued on behalf of Coverbox, a company at the vanguard of what is known as ‘telematics insurance technology’ because it installs equipment in vehicles which track their every move. As Coverbox’s managing director, Johan van de Merwe, puts it: “When a driver takes out an insurance policy with a telematics insurer, we install a small box which records the distance the vehicle covers, and charge accordingly. But the equipment also records many more parameters – including acceleration, deceleration, speed, and so on – which helps us determine driving standards.”

According to van de Merwe, telematics insurance is of more benefit to careful drivers because of the accuracy of the information about driver behaviour acquired by Coverbox. This, in turn, “allows us to be far more discerning in terms of who we insure”.

That’s all well and good – so far as it goes. Insurers need to be certain of their technology and, moreover, to remember its limitations. But it seems doubtful that they do so when they contend that telematics insurance can assist in determining the extent of whiplash injuries. This was argued by van de Merwe in the Coverbox press release as follows: “Telematic insurers can also use the equipment to measure the magnitude of an impact ... [this] can serve as a very useful guide in distinguishing claims needing investigation from those where a high probability of whiplash exists.”

Really? I am not so sure. There is a massive amount of hype about whiplash and a bandwagon of ever louder import which maintains that it doesn’t even exist. As I have previously written, members of the Association of British Insurers (ABI) have started using software privately dubbed as a ‘whiplash lie detector test’ to expose what the ABI believes are almost always bogus claims. This, despite the cutting edge research and findings of a clinical psychologist such as Dr Jannie van der Merwe to the effect that even if physically verifiable trauma does not accompany whiplash, it is no less debilitating for its sufferer.

Indeed, from my perspective as a solicitor, it is hard to imagine quite how anyone would maintain that whiplash is a fiction. My practice has seen many clients whose experience of whiplash is every bit as real as the accident that caused it. They are in genuine pain and have every right to claim for compensation. I cannot, therefore, but be concerned when I read of what seems to be a technology-based approach to determining whiplash claims. The whole point about pain is that it is subjective. Symptoms will vary from person to person. Each person’s physiology is different, too. What has happened to age-old principle, in tort law, that one must take one’s victim as one finds him?

My worry, if something like telematics insurance is taken too far, is that we will forget the human dimension. Insurers may not always like it but the people they insure are just that – people. They need to be treated as such.

I am delighted to be chairing a conference on May 15 at the Grange City Hotel on Cooper’s Row, London that will explore these and other issues. Dr Van de Merwe is one of the speakers; who knows, perhaps the other van de Merwe (Coverbox’s MD) will be in the audience. I hope so. There are many issues surrounding whiplash and the wider ranging the debate, the better. Ultimately, we should all be pulling together to create a system which compensates its insured victims fairly – and acknowledges that there is more to an injury than the visceral evidence of a broken bone.

Whiplash: The Evidence takes place on May 15 at the Grange City Hotel, 8-14 Cooper’s Row, London EC3N 2BQ. Registration starts at 08.45. Contact John via john.spencer@spencerssolicitors.com for more information. 

The insurance industry might not like it, but whiplash is a genuine condition

Whiplash is controversial. On the one hand, there is the injured person – the individual suffering varying degrees of neck pain, usually as a consequence of his or her car being shunted in the rear. On the other, there is the insurance industry. From its vantage point on high – a long, impact-free way from the scene of the accident – it tends to lament the number of whiplash claims made by British citizens. In fact, it doesn’t always just lament them: if it had its way, some parts of the insurance industry would prefer whiplash to be clinically diagnosed as a wholly fabricated condition for which no compensation is ever payable.

Certainly, there are examples that some whiplash claimants exaggerate the extent of their suffering. It is also undeniable that whiplash claims represent a high number of motor accident claims. But before we jump on the bandwagon which is being piloted by the Association of British Insurers (ABI) – members of which have  started using software privately dubbed as a ‘whiplash lie detector test’ to expose what it believes are almost always bogus claims – we should pause and consider the latest thinking on the nature of pain.

I recently attended a presentation to the Association of Personal Injury Lawyers (APIL) by Dr Jannie van der Merwe, a consultant clinical psychologist who specialises in cognitive-behavioural therapy. Dr van der Merwe’s talk, on emotional responses to pain, was fascinating. Among many interesting observations – not least, that the brain of a person with chronic pain shows functional, structural and molecular findings which suggest that pain can be understood as a disease state – Dr van der Merwe tackled whiplash. Insurers won’t like what he said: namely that whiplash, albeit that it may not be accompanied by physiological evidence, is a tangible condition.

This contention was illustrated by some remarkable case studies of people who either should have been in terrible pain (for example, a street performer from Pakistan who habitually put knives through parts of his body, exhibiting no discernible pain) or should not have experienced any pain at all. In the latter category, there was a man whose boot had been pierced by a six-inch nail. Unsurprisingly, he exhibited the kind of pain that one would expect, were a nail to be driven through one’s foot. However, upon examination it was revealed that the nail had missed his foot entirely, travelling through the boot and between his toes. Nevertheless, the man’s experience of pain was real, his symptoms identical to those that would be expected had the nail pierced his foot.

I believe that we need to be cognisant of cutting-edge psychological research such as that presented by Dr van der Merwe. His findings show that even if physically verifiable trauma does not accompany whiplash, it is no less debilitating for its sufferer.

Instead, then, of devising a system whose very title betrays the insurance industry’s attitude to whiplash (viz, its ‘lie detector test’), the ABI would do well to halt its bandwagon and enter into a genuine debate about whiplash. For those at the sharp end, knowing that those to whom they pay their premiums treat their pain and suffering seriously, rather than with contempt, would be a source of some comfort – if not an end to the pain they are unfortunate enough to experience.

In tackling fraud, we must be careful not to deny access to justice to genuine accident victims

First the news on referral fees: it looks as if the wheels of the law won’t be grinding as slowly as usual.  There is a discernible following wind behind the September announcement by the Ministry of Justice that referral fees in personal injury claims are to be banned, with plenty of media coverage driving on the calls for reform.

Indeed, referral fees in other sectors of the law are now being questioned, with the Sunday Times recently exposing the payment of referral fees in socialite divorces. One divorce lawyer is alleged to have paid fees of up to £100,000 to friends and acquaintances for sending unhappy couples her way. If true, no doubt she has been complying with the Solicitors’ Code of Conduct, but surely the payment of such bounties cannot but add to what is claimed to be the ‘compensation culture’ which ails contemporary society.

On, then, to what continues to concern me about reform in this sector. My thoughts are prompted by the fact that tomorrow I will be attending an annual conference on fraud at the Millennium Hotel in Mayfair, London. The majority of individuals present will be claims managers and fraud specialists from insurance companies, and the aim of the conference is to discuss “the industry's ongoing collaboration to achieve its fraud prevention goals”.

As vice-chair of the Motor Accident Solicitors Society, it is important that I am at the conference, both to learn more about current concerns in the insurance industry but also so that I can monitor the extent to which government reforms could have unintended consequences for injured people and road accident victims. Put simply: everyone agrees that fraud is wrong, but in combating it we must be wary of creating an environment in which genuine victims are denied justice.

Tomorrow’s conference will probably see discussion of the practice of ‘fronting’ on motor insurance policies. This scam occurs when an older, more experienced and lower risk motorist is insured as the ‘main driver’ of a vehicle. In truth, the vehicle is driven and often even owned by a younger driver, who is then added to the policy as a ‘named driver’, bringing down the cost of their insurance cover. The main culprits are parents – some 36,000 of them, according to the Motor Insurers’ Bureau. Some even pass off the younger driver as their spouse or partner, which reduce insurance costs yet further.

There is no doubt that ‘fronting’ is a valid topic of debate, and something that the insurance industry is fully entitled to tackle. But returning to referral fees, whilst the debate and appetite for reform continues apace, one senses that the government is now grappling with the huge and multifaceted problem of condensing to law the appropriate changes. This is not easy, and nor is it something that should be rushed. It is very clear that a holistic and thorough approach is appropriate: without it, change may cause more harm than good.