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.  

  

 

Whiplash claims – the truth, the whole truth and nothing but the truth…

Whiplash claims - the truth, the whole truth and nothing but the truth...
My car was damaged recently. It was in a car park and I was somewhere else. I claimed on my own insurance, and  was directed by them to a repair garage who  took my mobile number, ostensibly to contact me when the car was ready. They did not. Instead they sold on my details to a claims management company . I know this because I received a text a week later telling me that I had been in an accident and was entitled to £2,750.00.  Coincidentally,   the insurance industry blamed a projected rise of 13% in  premiums on the rise in personal injury claims.

Whiplash claims now make up 70% of all motor accident claims. Typically neck and back  symptoms might last 3 – 6 months with the courts awarding damages of between £1,500 – £3,000, so the claims themselves are not large. However it is an injury which has few objective signs and there is a clear temptation for fraud and exaggeration.

Evidence was placed before the Transport Select Committee in 2011 that the insurance industry loses £2.1bn per annum to fraudulent claims,  whether by “cash for crash” staged accidents or invention of symptoms.  The industry presents a story of the honest citizen paying the price for a system milked by the  unscrupulous.

The first point to make is that the number of claims in Scotland is dwarfed by those of our English neighbours. Figures obtained from the Compensation Recovery Unit show that instead of a proportion of around one tenth based on population, the figure is one twenty fifth.

The  Commons Transport Committee Report “The Cost of Motor Insurance” noted that other countries without the whiplash problem included France, Germany, Spain and ………Scotland.

The reason is that Scotland has few claims management companies, and a minimal  referral market.

A brief tour round the road traffic claims industry might illuminate where the real opportunities are:-

1. Claims Management Companies
These are not lawyers. Their business model consists in the identification and encouragement of possible claimants.

Details are then sold on to solicitors  for amounts of between £250 to £600.  They operate customer friendly  24 hour helplines and have a ubiquitous online and TV presence. It is claimed that they fulfil a need in that people are  too intimidated to speak to a lawyer.  Whilst that may have been the case 20 years ago, is it really true of the current consumer? For anyone who can operate a mouse or turn the Yellow Pages, this is an introductory dating service which is wholly unnecessary.

2. Credit Hire Companies
These companies will provide a replacement vehicle whilst yours  is being repaired. They will have paid a referral fee generally of around £500, typically to a body shop.  Their hire costs greatly exceed the market rates.  These will then be transferred to the insurer of the  at fault driver.  An example of the business model in operation is the 2010  case of Clark v. City of Edinburgh Council . 

After examining the  credit hire arrangement the judge  concluded that the unwitting pursuer was effectively required to raise proceedings for the sole purpose of recovering his credit hire payments .  His 14 year old Toyota Celica (value of £1,000 with 91,000 miles) had been damaged and the Accident Exchange Company provided a replacement Honda Civic 2 litre GT  with 900 miles on the clock. The hapless Mr. Clark then racked up daily hire costs of £161.63. He sued for a total of £12, 857.13.  In a withering judgement Lord Turnbull held that a “new vehicle for old” hire approach was not appropriate and awarded him a total of £1,950.00.

3. Your own insurance company
Insurers frequently incorporate an  add-on which provides legal cover . The claimant is then referred to the insurer’s panel solicitor .  You may believe that this recommendation is of a badge of quality. In fact the insurer receives a referral fee for every claimant.  The industry is coy about the value of  these backhanders, but estimates vary between £2 – 4 billion per annum.  These payments never appear in the industry analysis of cost per claim against premium income. 

There may be further  conditions whereby the solicitor agrees to direct the client to specific medico-legal practices or car hire firms, generating more referral fees. Road traffic claims are not difficult. This is work which any no win, no fee lawyer will do for you without charge. 

The Transport Select Committee has recommended that insurers should publish on their website a list of the firms with which they have referral arrangements, an indication of the level of fees paid and a clear explanation of how referral arrangements work and their purpose.  They should make it clear  that claimants need not use the recommended  solicitor, vehicle repairer or credit hire firm .

As you read this someone is receiving a text from a claims management company encouraging a claim to be made.

This is a system which  provides profit opportunities for vendors of fresh air at every stage. The Transport Select Committee has described it as “a dysfunctional merry –go-round”.   The problem is currently being addressed in England under the  “ Legal Aid Sentencing and Punishment of Offenders Bill 2011”,   which amongst other things outlaws  referral fees. It remains to be seen whether this will cure the English patient.

So when you get your renewal premium don’t blame your fellow motorist, or at least those of us living in Scotland.

And has the time not come for concerted agitation for much more  significant postcode discounts?

‘Complete and utter Maudeness’ – Minister creates havoc at home with lethal ‘advice’ on fuel storage.

'Complete and utter Maudeness' - Minister creates havoc at home with lethal 'advice' on fuel storage.

The Telegraph

Before we vilify Francis Maude for truly mind-bogglingly staggering ineptitude, we should consider his pronouncement within the context of the government’s cavalier approach to health & safety legislation in the UK.

Firstly we had Lord Young of Gaffem’s report ‘Common Sense Common Safety’, wherein the noble peer delivered what was expected of him and proferred the idea that we could dispense with much of the UK’s current health & safety regulations.

David Cameron fell on the report like a hungry wolf spying the fatted calf and immediately announced a raft of cut backs and claw backs as he began the process of dismantling 178 years of hard fought progress in worker and public safety in this country.

So far, so bad.

The primary justification for this rush to deregulate is the much-vaunted yet fatally flawed theory that less onerous health & safety regulation means more profit for business.

Then we had Professor Ragnar Lofstedt’s report ‘Reclaiming Health & Safety For All’. Professor Lofstedt has clearly stated that he is not in favour of ‘radical’ reform, apparently contrary to prime minister David Cameron’s attack on the ‘monster’ of health and safety.

The PM referenced Lofstedt’s report from December as he blamed the ‘albatross’ of health and safety legislation for holding back British businesses but the King’s College academic, insisted he had never called for significant changes to legal policy and did not believe in a compensation culture.

When asked if he was worried his report could be hijacked for political purposes, he said: ‘I am concerned about it. I am concerned my review could be misused.’

So bad, so far…

‘The scores on the doors’ : Reports delivered – 2. ‘Common Sense’ health & safety strategy in the UK – 0.

The second assumption underpinning the current madness is the notion that most day to day activities and even most workplaces are intrinsically safe and thus we only require a light touch on the regulation tiller to ensure our safety as we go about our daily lives…

and this is where Francis Maude comes in.

MINISTER CREATES HAVOC AT HOME WITH LETHAL ADVICE ON FUEL STORAGE AS WOMAN SUFFERS 40% BURNS IN JERRY CAN FIRE.

Fire officers have warned the public not to store petrol in their home after a woman suffered 40 per cent burns in a fire started by petrol she was transferring between containers, following advice from government minister Francis Maude that motorists should consider storing fuel in anticipation of a tanker drivers’ strike.

The victim, 46-year-old Diane Hill, was badly injured after her clothes caught fire while decanting the fuel from one container into another at her home on York. A fire service spokesman said:

‘She was using her cooker at the same time as pouring petrol from one container to another using a jug after her daughter had asked for some petrol.’

The mother-of-two, from the Acomb area of York, was taken to Pinderfields Hospital in Wakefield, Yorks while two firefighters wearing breathing equipment dealt with the aftermath.

At the time of writing no apology has been received from Mr Maude…but the real bad news is that he probably doesn’t know what he and his government should be apologising for.  

2012 is ‘The Year of Living Dangerously’…if you live or work in Britain.

2012  is 'The Year of Living Dangerously'...if you live or work in Britain.

Photo:The Telegraph

The Mayans predicted 21st December 2012 as the end of days.

January 5th, 2012 comes a close second as David Cameron picked this day to get a head start on the Mayans and launch his government’s ‘Year of Living Dangerously’  – for you and me, that is.

Let us review recent events…because this government seems determined to keep reviewing health and safety legislation until it gets the answer it wants…

 

In October 2010, Lord Young’s report – ‘Common Sense, Common Safety’ stated on page 19 that:

‘Britain’s compensation culture is fuelled by media stories about individuals receiving large compensation pay outs for personal injury claims.

The problem of the compensation culture prevalent in society today is, however, one of perception rather than reality.’

Lord Young’s report was welcomed by the government.

 

In November 2011, Professor Ragnar Lofstedt concluded in his report – ‘Reclaiming health and safety for all. An independent review of health and safety legislation’ that: 

‘In general, there is no need for radically altering current health and safety legislation.‘ 

He went on to say that he wanted businesses to :

‘reclaim ownership of the management of health and safety and see it as a vital part of their operation rather than an unnecessary and bureaucratic paperwork exercise.’

Professor Lofstedt’s report was welcomed by the government. 

 

However, on 5th January 2012, the Prime Minister stood the core findings of these reports on their heads and launched a vitriolic assault on accident victims and their legal representatives as he endeavoured to sell the British public the idea that health and safety legislation is bad for business. 

He pledged to ‘slay the health and safety monster.’

He vowed to make 2012 the year we ‘kill off the health and safety culture for good.’

He fumed that ‘health and safety legislation has been an albatross around the neck of British business.’

He promised that ‘our plan will deter the speculative health and safety chancers who leech off good businesses.’   

Either he hasn’t read these reports;commissioned by his own government, or he has chosen to ignore their findings and twist their conclusions to suit his own agenda, which is quite remarkably in tune with the agenda promoted by the Association of British Insurers.

The ABI has been invited to a Number 10 ‘summit’ to discuss how to dismantle 178 years of progress in health and safety regulation designed to protect British workers and the British public.

Quite apart from the appallingly injudicious language employed by the PM and his tabloid-toadying populist sound bites, his policy makes no commercial sense whatsoever.    

Here’s the counter argument as proposed by a senior US government official, which we highlighted in our blog of 16th February last year…

David Michaels, Assistant Secretary for Labor in the US Department of Labor’s Occupational Safety and Health Administration had a lot to say on the subject of health and safety regulation and jobs:

‘Despite concerns about the effect of regulation on American business, there is clear evidence that OSHA’s common sense regulations have made working conditions in this country far safer than 40 year’s ago when this agency was created, while at the same time protecting American jobs.

 

The truth is that OSHA standards don’t kill jobs. They stop jobs from killing workers.

OSHA standards don’t just prevent worker injuries and illnesses, they also drive technological innovation, making industry more competitive.’

 

Despite the weight of evidence proving that robust health and safety legislation actually improves the health of the economy, the government is hell-bent on making its point in 2012.

 

Let’s hope that someone in the cabinet has enough spirit and common sense to speak up for our well-being before we revert back to the worst excesses of rogue factory owners and ‘laissez-faire’ employee exploitation that treated worker safety as an impediment to profit.

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This government seems determined to keep reviewing health and safety legislation until it gets the answer it wants

In October 2010, Lord Young’  

 

 

Britain’s ‘compensation culture’ is fuelled by media stories about individuals receiving large compensation payouts for personal injury claims…The problem of the compensation culture prevalent in society today is, however, one of perception rather than reality…(page 19). 

The Government welcomed the report.

 

In November 2011