“ Curious the referral ”
Reduced fees on MoJ cases - the proposal is to halve the fees, but there does not seem to be any rationale for this, other than that if there is no longer the need for a solicitor to incur an outlay of £600 in referral fees to secure a case, then his profit will be boosted by that amount. Thus the halving of the fees he could expect to receive in an MoJ case would have little, if any effect on his net profit.
Of course a bigger problem with MoJ cases is the number of cases presented where the first fee of £400 is collected and nothing further is heard. I have heard it suggested that this could be as high as 40% of all cases.
injury is based on the account of the victim, which may or may not be true. There is also the uneasy feeling that, even if whiplash can be removed from the category of symptoms that can only be identified by the claimant, there are plenty of other opportunities which may then arise. What about, for example, psychological injuries? Surely it is not sufficient to just target one category of “injury” but to require independent objective evidence in all cases. Perhaps he is concerned at the impartiality of claimant’s doctors, given his comment about injuries being “...undiagnosable other than by third rate doctors in the pay of accident management companies or personal injury lawyers...”
If so, maybe we will be looking at court appointed experts, but will that necessarily be any better? Would restriction of medical opinion to one court appointed doctor be practical or just? Will insurers or indeed claimants accept a court expert without instructing their own doctors? Might we just introduce another layer of cost?
ban relates only to road accident claims
“ Many have been disgusted
by the unethical nature of the business of acquiring and selling claimants
”
Post code rating - having proposed measures which will assist insurers, we now come to pay-back time. This proposal seeks to remove rating by post code and to limit underwriters’ freedom to assess risk to no area smaller than a region, of which Wales, or a “standard English Region” are given as examples. However, this is hardly likely to help policyholders with impeccable records who happen to reside in, say, the North West, where there are numerous hot spots of insurance fraud, as well as uninsured driving.
Are we in danger of seeing a continental approach here where rating of policies has moved away from the driver and is based largely on the vehicle? I dare say that is unlikely but as Mr Straw is the Member for Blackburn, one may appreciate the motivation behind the suggestion.
Data protection - it is proposed to prevent the sale of accident victims’ details. Arguably that is already a breach of data protection, so one wonders what further protections would be proposed and why, if the Information Commissioner is already aware that the claims industry is regularly breaking data protection laws, something has not already been done?
There are of course provisions on the statute book for tougher penalties for trading in data and the Bar Council has suggested that the Bribery Act could be called into play in some cases, but no suggestion yet as to what else may appear in this bill in due course.
All in all the bill is an interesting opening gambit and no doubt we will all be watching progress and responding to consultations accordingly. It is only by participating in the debate that we will see sensible changes made.
The Bill
Jack Straw’s Motor Insurance Regulation Bill should reach its second reading in January 2012. One might say this is sponsorship from a surprising source, but Mr Straw waxed lyrical when presenting the bill for its first reading on 13th September.
The motivation behind the bill is, in Mr Straw’s words “
...in the past year alone there has been a 40% increase in the average premiums paid by Britain’s motorists...”
Further, “
...increase in claims has been artificially generated by a new industry, unheard of 20 years ago - a ‘claims industry’ with, I am afraid, the complicity of the insurance companies themselves.” (my emphasis).
Yes, he continued that “Claims management companies, personal injury lawyers, credit hire companies and repair and recovery firms have built a lucrative and self-serving merry-go-round in which personal information is traded like a commodity...”.
Roger Snook NOVEMBER 2011 insurancepeople 17
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