Secrets and lies – The dysfunctional car insurance meerkat (and other animals)

Secrets and lies - The dysfunctional car insurance meerkat (and other animals)

BBC Images

Monday’s Dispatches investigation on Channel 4, presented by Harry Wallop certainly packed a punch and was a welcome riposte to the insurance lobby’s PR deluge of misinformation, miscreancy and mendacity.

We hope it is the first of many broadsides in the fight to redress the balance in favour of the British public’s entirely reasonable expectation to be treated fairly by some of the world’s largest corporations.

Not much to ask you would think but these guys have had it their own way for so long now and have so successfully weasled their way into government circles that they are setting the insurance agenda for all of us. A concerted effort by the concerned is required NOW to identify the real villains of the piece and the true insurance scammers operating in this dysfunctional market.

In our opinion this documentary was a good first step because it exploded the myth that insurance companies are primarily concerned about us, their customers.

The film absolutely nailed the point that the insurance companies and accident management firms are only concerned about maximising their profit margins as they pressurise motorists to deal with their ‘approved’ body shops and pressurise the garages to carry out work at minimal cost., often using non-standard parts.

Now this would not in itself be such a problem if savings were shared between insurance companies and policy holders and work was carried out to a high standard but this does not happen…and our premiums go up and up.

Evidence from experienced people in the trade confirmed that the pressure insurance companies put on body shops to cut costs compromises the integrity of the damaged vehicle and the safety of the driver and their family.

The story gets worse.

If a driver is involved in a no-fault accident his/her insurance company will seek to max out the ‘value’ of the claim by shamelessly inflating the cost of the repairs and hitting the other side for all they are worth….and who pays for this?

Correct. We do every day.

Whilst the insurance companies are busy portraying themselves as ‘holier than thou’ and the nation’s protectors of the vulnerable, they are busily scamming the market for every penny they can extract from supplier rebates and other kickbacks and exploiting their customers without any regard to the principles of good business practice, far less business ethics.

The insurance companies then have the bare-faced audacity to stuff their own pockets with all this extra ‘bunce’ and then claim that innocent accident victims who have the temerity to claim compensation are responsible for the hike in premiums which the Office of Fair Trading (OFT) states are inflated to the tune of at least £250m per annum by the industry’s own malpractices.

Their underhand tactics have thankfully not gone completely unnoticed. The OFT has announced that it will be investigating the insurance market, despite the best efforts of a toadying government to foster the myth of a compensation culture and agree to virtually everything the Association of British Insurers (ABI) has demanded in recent years.

In typical weasel word fashion, as befits its modus operandi, the ABI claims that it welcomes an investigation. Aye right, we’ll see…as we live in hope.

Meanwhile, we are still waiting for the ABI to explain why its members are paying out on claims known to be fraudulent.

If a claim is known to be fraudulent why does the industry not take action to prosecute the fradusters? The conclusion must be that the insurance companies are spending a hefty chunk of our car insurance premiums on fraudulent claims. Perhaps the ABI’s Nick Starling can explain why this SCANDAL is allowed to go on unchecked.

Could it be that there are far fewer fraudulent claims than suits the ABI position and that the creation of the ‘bogeyman’ of an insurance fraudster is a very useful whipping boy when it comes to peddling lies about whiplash claims and the impact on premiums?

We will be asking the OFT to look at this matter very closely…and checking with Harry Wallop to see if he is planning to look at the government’s and the insurance industry’s perverse approach to dealing with personal injury claims.

Written by Andy Thorogood, Business Development Manager, Bonnar Accident Law. 

Black Monday Part 2: ‘Think-tank blames compensation culture for EVERYTHING

Black Monday Part 2: 'Think-tank blames compensation culture for EVERYTHING

Photograph: BBC

Chiming nicely with this Government’s anti-health and safety mantra, a new ‘think tank’ report claims that “an ingrained compensation culture is bleeding health and education services dry,”…

Independent study? Oh really?

Well at last the Government has unearthed somebody who thinks hurt and injured people seeking compensation are the cause of all that’s wrong with the NHS and the education system… 

Glib tabloid sound bite – 1, reasoned debate – 0.

Payouts by the NHS Litigation Authority (NHSLA) have trebled in the past decade, standing at £911m in 2010/11, according to the report by the Centre for Policy Studies at Kent University.

Of this, £863m was paid in connection with clinical negligence claims, the report says.

OUR QUESTION: Did those claiming compensation not have to PROVE negligence?

ANSWER:   Yes.

Are we expected to believe that insurance companies just simply pay out on spurious claims? Don’t think so. If that was the case we would be blaming the insurance companies for the myth of the ‘compensation culture…wait a minute…

So what is the real issue here? Is it the cost of compensation claims or falling standards of care and education?

The report adds that as of March last year, the NHSLA estimated its potential liabilities at £16.8bn, though a large proportion of cases do not reach court.

Out of 63,804 medical negligence claims received by the NHSLA, 38% were abandoned by the claimant, 45% were settled out of court 3% had damages approved or set by a court and 14% have yet to settle.

Tim Knox, director of the Centre for Policy Studies, said: “This rise in the compensation culture has huge – if largely hidden – costs. In particular, it has created a climate in which professionals will prioritise litigation avoidance above what is best for their pupils or patients.”

This is an outrageous and unsupported claim. Mr Knox is asserting that NHS clinicians and school teachers are putting patients and pupils a poor second behind financial considerations.

By the way, why is the HSE silent when reports like this are churned out? Isn’t the HSE keen to dispel health and safety myths? There is a section on the HSE website dedicated to this very topic… 

Meanwhile, back in the Twilight Zone, Mr Knox, at a stroke, has just RUBBISHED the ethical standards of hundreds of thousands of highly paid, highly qualified and highly respected professional people throughout the UK.

WELL DONE…

The report goes on to warn that instead of improving safety and accountability, it (the oft-quoted ‘compensation culture’, has resulted in “significant costs to the quality of services and the experiences of those who use them”.

Lest the dead horse has not been flogged enough, it continues: “The combination of an ingrained compensation culture and litigation avoidance is bleeding the health and education services dry, both financially, and in terms of their public sector ethos and professional role.”

Report author Professor Frank Furedi said fear of legal action can hold back progress and creativity. “It erodes professional autonomy, stifles innovation, leads to defensive practices in both hospitals and schools and encourages greater bureaucracy,” he said.

Wow, we say, Professor Frank. That’s quite a lot to lay at the door of the non-existent compensation culture. It’s not us saying it’s non existent; it’s the two recent Government sponsored reports on the subject that rubbished the notion of a compensation culture:

‘Common Sense – Common Safety’ – Lord Young, 2010.

‘Reclaiming Health and Safety for all’ – Professor Ragnar Lofstedt, 2011.

However, according to Frank Furedi, “‘Best practice’ is now defined as having checked all the boxes in a quality assurance form rather than doing what is best for the patient or pupil.”

About all we can say for this study is that it checks the box for finding a study to support the ill-founded notion of a compensation culture and thus the Government can happily push on with its Crusade against the legitmate rights of its citizens to seek justice and fair compensation.

What must Lord Young and Professor Lofstedt think?   

 

Weasel Words from the ‘Wronged’ as car insurers try to shift blame for inflated premiums

Weasel Words from the 'Wronged' as car insurers try to shift blame for inflated premiums

A weasel.

Finally, we hope, insurance companies are to face the government’s competition watchdog over their oft-quoted claims that inflated motor premiums have nothing whatsoever to do with their business practices.

Really? Do they think we are THAT stupid?

At last a government department has blown their cover and published what everyone, barring Jack Straw and chums, knows to be true:

Insurance companies ARE taking advantage of the system to inflate premiums for drivers by £225m a year, the Office of Fair Trading (OFT) reports today.

The competition watchdog says that after a road traffic accident, insurers of the not-at-fault driver and others, such as brokers, credit hire organisations and repairers, exploit a lack of control in the current system. They charge referral fees for using expensive hire organisations and then add to the cost by replacing the car for longer than is necessary.

The OFT has provisionally decided to refer the private motor insurance market to the Competition Commission after finding evidence that firms are competing in a ‘dysfunctional way’.

The report states that the government has focused its attention on reducing the cost of personal injury claims, but without intervention in the cost of replacement vehicles and repairs, artificially-inflated premiums are ‘likely to persist’.

Exactly. Three cheers and due credit for a chink of light in a tunnel of darkness and despond…

John Fingleton, chief executive of the OFT, said:

‘Competition in this market does not appear to work well for drivers. We believe the focus that insurers have on gaining the competitive edge through raising their rivals’ costs means that drivers pay more than they need to for their motor insurance policies.

‘Because insurers are distracted from competing primarily on the quality and value of service provided to insured drivers, incentives for greater efficiency may be reduced.’

Donna Scully, chairman of the Motor Accident Solicitors’ Society (MASS), said the scale of the problem could be ‘immense’ once it is fully investigated.

‘Money is clearly being made from consumers behind their backs and MASS would welcome full disclosure of specific fee income on every case so that the consumer is fully informed,’ she said.

It is no wonder the whole sector has fallen into disrepute and that consumers are so wary of everyone who operates in it, and frustrated by exploitative practices they are likely to encounter when they make a claim.’

The Association of British Insurers welcomed the report – hmm, doubt that – but declined to address the accusations over its members receiving referral fees from credit hire companies.

Now THAT we believe…

Nick Starling, director general of the ABI, said: ‘For too long insurers have faced inflated rates for credit hire cars and excessive hire periods which have led to higher insurance premiums for customers.

AND THERE WE HAVE IT.

WEASEL WORDS FROM THE ‘WRONGED’.  

INCREDIBLE AS IT MAY SEEM, AFTER YEARS OF VILIFYING ROAD TRAFFIC ACCIDENT VICTIMS AND PERSONAL INJURY SOLICITORS, THE INSURERS ARE NOW SEEKING TO BLAME THE CREDIT HIRE AGENCIES AND VEHICLE REPAIR COMPANIES FOR THE RISE IN PREMIUMS.

Soon there will be nobody else left to blame and what then Nick?

Karl Tonks, president of the Association of Persosanl Injury Lawyers (APIL) commented:

‘For years the insurance industry has sought to blame anyone and anything but itself and its own sharp practices for high insurance premiums. Legal costs for compensation claims were slashed two years ago for this very reason, but premiums remained sky high.’

The OFT expects to reach a final decision by October 2012.

In our opinion it can’t come soon enough.

Outrageous claims by insurers go unchallenged by supine MoJ

Outrageous claims by insurers go unchallenged by supine MoJ

The most outrageous claims pertaining to the debate on whiplash injuries are those being made by the insurance industry and government ministers seemingly hell-bent on creating a benign regulatory environment for businesses coupled with a full-frontal assault on the mythical compensation culture.

We say mythical because the two major studies carried out by this administration to examine the so-called compensation culture have both concluded that that the very notion of a compensation culture in the UK was misguided, erroneous and intrinsically flawed. 

Lord Young of Graffam’s ‘Common Sense, Common Safety’ and Professor Ragnar Lofstedt’s aptly named ‘Reclaiming health and safety’, independently concluded that the problem was more a figment of the media’s imagination and there was no evidence to suggest otherwise. Professor Lofstedt went so far as to publicly declare he was very uneasy and dismayed that his report was being misused to prop up government policy on health and safety in the UK.  

However, rather than let the independently researched facts get in the way of a good populist crusade, Prime Minister David Cameron has vowed to take on the ‘compensation culture.’       

Echoing the PM’s call to arms against accident victims seeking justice, none have risen to the challenge more enthusiastically than the nation’s insurance companies who have been invited to Number 10 twice already this year (most recently on 2nd May) to discuss how the government can help them reduce their costs and increase their profits. Incidentally, the government refused a request from The Law Society to be represented at these meetings and we can only wonder why…

Take a bow gentlemen and ladies of the insurance lobby for verily your occupation of the moral high ground on the matter of car insurance premiums is truly mind-boggling.   

For example, Head of Motor and Liability at the Association of British Insurers (ABI) James Dalton commented recently that:

‘If whiplash were an olympic sport, the UK would be gold medallists. The fact that whiplash is virtually impossible to disprove means that for too many it has become the fraud of choice, often aided and abetted by ambulance-chasing lawyers and claims management firms.’ 

Nick Starling,ABI Director General welcomed the PM’s intervention and claimed that:

‘Insurers are being swamped with exaggerated or even fraudulent claims. There is no medical diagnosis for whiplash and if an insurance company wants to challenge a whiplash claim it has to effectively say someone is lying to them.’ 

Well my goodness me. Imagine a world where an insurance company pays out on an insurance claim because it doesn’t want to upset the claimant. It might happen someday…you think?

Is Nick Starling actually saying that the insurance companies are simply paying up on whiplash claims? If so what does this tell us about:

a) the current profit margins in the insurance industry if it can afford to cough up on the simple ‘say so’ of the claimant.

b) the level of sheer unadulterated laziness and lack of attention to proper procedure in the insurance industry if it allows fraudulent claims to go unchallenged.

IF NICK STARLING KNOWS THE CLAIMS ARE FRAUDULENT WHY ON EARTH ARE THE INSURANCE COMPANIES PAYING OUT?   

It’s our money THEY are wasting!

Not to be outdone in the ‘heaping opprobium on the heads of accident victims and their families stakes’, government ministers have been lining up to place a well-aimed boot in the soft tissue of Access to Justice in the UK. 

Justice Secretary Ken Clarke has stated 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.’

Dear Ken,

Ask the ABI why it settles spurious claims.While you’re at it, why not ask how the insurance companies know which claims are spurious.

Last year, it was disclosed that Justice Minister Johnathan Djanogly’s two children each held shares in the claims management companies Going Legal and Legal Link Introductory Services, which solicit people who might have a compensation claim and then sell their details to lawyers.

Mr Djanogly had admitted that his brother-in-law, Ben Silk, owned the companies, but had not disclosed his children’s shareholdings.

Dear Johnathan,

Why are you still driving changes that will disadvantage the British public whilst benefitting your family? 

Last week Mr. Djanogly admitted the government would promote ‘Before The Event’ (BTE) insurance as a way of funding legal expenses and predicted the cost of such cover would come down.

Labour says annual premiums could be £150, amounting to a tax on justice that would reap big profits for the insurance industry. An internal industry analysis shows insurers stand to gain £1 in profits for every £2 of premium payments.

 

Our concerns:

We now have a situation in this country that the government of the day refuses to pay heed to the findings of its own reports on health and safety and chooses to listen exclusively to the jaundiced views of the vested interest that is the insurance industry.

Genuine accident victims are being actively discouraged from making compensation claims by concerted and ill-founded media coverage coupled with government action on Legal Aid and access to justice.

Hurt and injured people are being bullied by well-funded and powerful insurance companies to accept low offers before they have had a chance to seek independent legal and medical advice in the erroneous belief that they will be out of pocket if they lose their case.

The public are being spoon fed a diet of misinformation about the impact of the so-called ‘compensation culture’ by the government and the insurance lobby.

The government is determined to reduce the ‘legislative burden’ on industry by reducing the scope of existing health and safety regulations.

The government wants us to buy MORE INSURANCE to fund potential claims.

The insurance industry wants to kill off ‘no win no fee’ legal firms because they help claimants fight for justice and fair compensation.

Insurance companies would prefer to see no claims – EVER, but given that some claims must get through their net, they would like to decide on the level of compensation themselves and pay whatever sum they see  fit. 

So, don’t get injured.

If you do get injured get independent legal advice – while you can.

 

…and remember insurance companies , like bookies, never lose.  

  

“Pieces of eight…pieces of eight…” – Pirate ship or flag of convenience as Admiral ponders legal launch?

Photo: The Telegraph

Is it now any port in a storm for under-pressure insurer Admiral?

Saturday’s Telegraph reported that Admiral, the FTSE 100 motor insurer, is considering branching into the legal sector as it “faces up to the loss of the lucrative referral fees that generate millions of pounds in profits each year.”
 
According to industry insiders, Admiral must move quickly to replace the loss of income from the fees paid to insurers for information of potential personal injury claimants. 

The Cardiff-based group is exploring plans either to set up its own personal injury law firm where it could potentially direct customers with claims or become a majority backer in one, following the implementation of the Legal Services Act in October this year., when the implementation of “Tesco law” widened the provision of legal services to new investors including retailers, banks, insurers and outsourcing companies – The Four Horsemen of the Apocalypse as far as independent legal advice in the UK is concerned. 

However, as the story of Britain’s over-hyped, and mythical so-called compensation culture rumbles on, insurance companies are becoming increasingly uncomfortable when quizzed about their involvement in various referral fee schemes…and Admiral seems to be no different. We wonder why.

Despite periodic denials that it sells client information, according to official Admiral sources, about 5.6% of its overall profits come from these fees. So who are we to believe when Admiral contradicts its own statements?

Speaking after the referral fee ban was announced in September, the company said: “Admiral does not sell customer data; if one of our policyholders has a non-fault accident, suffers a bodily injury and they require assistance, we will put them in touch with a personal injury lawyer.” So what about the income from referral fees then?

Admiral would not be the first insurer to push into the legal industry. Axa owns Knight Legal Services, a defendant law firm. It has always denied it refers its customers to Knight Legal Services and says it has no plans to start doing so…but what will happen if insuers own law firms?

How can injured people be confident that their accident compensation claims will be handled fairly and with their best interests at heart? It might be tricky to find independent legal advice when the representatives of those causing injury are also investors in law firms that pursue claimants’ rights, or even worse perhaps, set up theit own personal injury law firms…

It would appear that Admiral’s plans are at an early stage and are one of several being considered. However, the news is likely to raise eyebrows across the City with Admiral’s shares having fallen heavily in recent months. A case of who’s next?

So me hearties, let’s observe this “rum do” as they set sail on a steady course for berating personal injury lawyers, stigmatising their clients, perpetuating the myth of a compensation culture and,

oh yes,    …becoming personal injury lawyers themselves??

Can all this be about profit and an attempt to make a flawed business model work? Well, it’s not quite “Neverland”, but you can see it on the horizon, allegedly…