Comment on The Transport Committee Report - Susan Brown, Prolegal

14/02/12. The Transport Committee in its follow-up report published on 12th January shows that it has considered the issues, asked sensible questions, listened to the answers and thought about the issues again in the light of them. High levels of motor insurance premiums for young drivers in particular, but for all drivers in certain black-spots around the UK (including famously Jack Straw's Blackburn constituency) are a serious problem, although middle-aged drivers living in the south-east with comfortable no-claims bonuses may wonder what all the fuss is about. The Committee correctly concludes that the high levels of premium are the result of dysfunction within the motor insurance market itself. Insurers themselves seem to recognize that they have been incredibly stupid in allowing a situation to arise where, by accepting referral fees from solicitors, credit-hire companies and garages, they have created a monster that has grown too big and too strong for them to control. The Committee recommends that the ban on referral fees, to be implemented under the Legal Aid, Sentencing and Punishment of Offenders bill, be extended beyond personal injury claims to cover all referral fees, and that the focus be the prohibition on insurers receiving the referral fees. It also echoes the views that have been expressed by all who understand the industry, that a ban will be ineffectual now that non-lawyer ownership of law firms is permitted.

Uncontroversially, the report recommends action to control the insurance industry's flagrant disregard of data protection legislation, and the activities of some of those in the supply-chain in the use of cold-calling and unsolicited text-messaging.

The most difficult area they tackle, however, is whiplash injury. Like referral fees, this issue has been raised by Mr. Straw, and it has also been the focus of the insurance industry propaganda-machine in recent months. There is no doubt that whiplash is difficult for insurers. As with credit-hire, they tend to win a few battles along the way but on the whole are on the losing side in the war. Most claimants who have the determination to pursue whiplash injury claims all the way to trial are successful. The best insurers can hope for is that some will lose heart along the way, but for those claims that are fought all the way to trial, insurers are heavily punished in costs. The reality is that most of those who pursue whiplash injury claims are genuinely injured but some are not, and currently the test is a simple one: does the judge believe the claimant is telling the truth? Insurers can wheel out orthopaedic surgeons and experts in Delta V at as much expense as they choose, but if the judge believes the claimant, even if damage to the vehicles is minimal or non-existent, the judge will find in the claimant's favour. So insurers tend to settle these claims, and in their enthusiasm to settle them as cheaply as possible, particularly without incurring legal costs, some will approach accident victims offering them money before they have even produced any evidence at all that they have been injured. This practice has in fact probably done as much to spread the whiplash injury epidemic, if there is one, as anything else. Many of those who, three or four weeks after the accident, would have decided that as they had made a full recovery from some fairly minor discomfort they would not bother to claim, would if offered £1000 two weeks after the accident have been happy to accept the offer. However for the insurers who adopt this practice, it reduces settlement times and minimises outlay per claim. So they carry on doing it and look for someone else to blame for the rise in claims - their culprit of choice generally being greedy claimant lawyers despite these lawyers' entire non-involvement in this process.

The Transport Committee proposes, as many have done before them, that something be done about this. Like those before them, they are not too sure what. Take some of the money out of the system and hope for the best seems to be their primary suggestion. If there is less money to be made fewer people can be employed to make annoying phone calls, so it has some chance of having an impact. But the insurers' propaganda and Mr. Straw's rhetoric have had so much coverage in the mainstream press that there can be few people left unaware that it is easy to make a whiplash claim following a minor RTA. It may be that the claims won't go away. In which case, the Committee recommends, the government should legislate to require claimants to provide objective evidence of an injury that has had a significant effect on their lives. Excellent idea, but one that would probably set the bar too high for most genuinely injured claimants. For most whiplash injury there is no objective evidence. Doctors make the diagnosis on the basis of the patient's description of symptoms and on examination all that is found is some apparent restriction of movement and pain on extension, neither of which is objective. And how would one provide objective evidence of something affecting one's life, surely by definition a subjective measure? Alternative methods of excluding less serious whiplash claims have been suggested elsewhere, but all are problematic in formulating and measuring, and beg the question as to why a special test should be applied to whiplash beyond the standard test that the claimant needs to prove his case on the balance of probability.

Susan Brown is a Director and Head of Personal Injury and Professional Negligence at the law firm Prolegal.

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