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

December 12, 2011/0 Comments/in , , , , , /by

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…

 

 

Lord Young of ‘Gaffem’ back in favour at Number 10

October 31, 2011/0 Comments/in , , , , /by

Good news and bad news for worker safety in the UK

Bad news: Lord Young is back

Good news: there is no good news, well not much anyway… 

Getty Images

‘Never had it so good’ peer Lord Young of Graffam returned to Downing Street last week on Prime Minister’s Mates’ Service or PIMMS… 

His mission, having chosen to accept it, is to help businesses thrive by ridding them of red tape and stifling health and safety regulations.

Thus a fundamentally flawed premise is enshrined in the noble Lord’s brief – Health & Safety costs money and costs jobs.   

In stark contrast to the UK’s government’s stance on health and safety in the workplace, David Michaels, assistant secretary of labor for the US Department of Labor’s Occupational Safety and Health Administration (OSHA), said on 15th February this year:

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

Unfazed by the irony in resurrecting Lord Young’s career in the run up to Halloween, Number 10 officials have set up a new office for the 79-year-old peer who will spearhead a new push to remove barriers to growth for small and medium size companies.

His focus will be on working to ensure businesses are not stifled by regulation and he will look closely at the way health and safety rules impact on firms.

No agenda there then?

Last year his report Common sense, Common Safety, was welcomed by Mr. Cameron who has asked the Conservative peer to cut through the rule book and see where ministers can help businesses.

Unfortunately neither Mr. Cameron, the insurance industry lobby nor the bulk of commentators who regularly line up to vilify accident victims actually noticed that Lord Young didn’t agree with them…

For the record, this is what he said on page 19 of ‘Common Sense, Common Safety’:

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…

The public believes that the number of claims and the amount paid out in damages have also risen significantly.

The really unfortunate thing however is that Lord Young singularly failed to get this ‘common sense’ message across.

He wrote that the compensation culture is more myth than reality yet he remained mute and supine on the core issue when the report’s findings were made public. Perhaps this is why he is so suited to the task of fixing the non-problem of the ‘burden’ of Health & Safety legislation? 

Last November Lord Young of Gaffem pronounced:

For the vast majority of people in the country today, they have never had it so good ever since this recession – this so-called recession – started…”

We await with baited breath, his magisterial musings on the tiresome burden imposed by laws designed to keep people safe and well at work in the UK.

However, Mr. Cameron has clearly decided Lord Young has served his time and will welcome him back…just when we thought he had gone for good last October…  

 So farewell then Lord Young of Gaffem. 

 You resigned after you made a gaffe.

 You claimed that most people had ‘never had it so good.’ 

 Unfortunately this just isn’t true,

 Like much of your ‘Common Sense Common Safety’ review.

 Adieu.

But not so fast, the prodigal returns.

Expect many more workplace cuts, crushes, crashes and burns.  

Jack Straw aimed a kick at the wrong target when he bemoaned activities of claims companies and lawyers in referral fee investigation.

October 17, 2011/0 Comments/in , , , , , /by

 

Thus, at a stroke, Djanogly kicked into touch the key finding of Lord Young’s 2010 report on the Compensation Culture (see our other blog posts) i.e. that there is no compensation culture (page 26 of the report) – it is the figment of the popular press’ imagination, aided and abetted by the insurance industry. 

 

 

Mr. Straw, the Labour MP for Blackburn, said the scandal was hitting ‘perfectly law-abiding people’ with sky-high insurance costs…

 

and what about the perfectly law-abiding people who will find their access to justice cut off?

 

Mr. Straw, whose own investigation (bit of a ‘cult of Jack’ going on here) into how even the police are taking tip-fees, prompted the select committee to re-open its earlier enquiry, said: ‘What I am clear about is that of a total of about £9billion premium income, £2billion is costs caused by people who can be accurately be classed as the parasites in the system.

 

How is he clear about this again? Didn’t HE read Lord Young’s report?

 

Mr. Straw told MPs that the previous night, while he was preparing his evidence to the committee, he had been phoned at home by a claims accident company seeking to represent him over an alleged accident  in the last three years: ’I’d not had an accident in the last three years,’ he told MPs.

‘But it shows the relentless pressure inside these very dodgy firms.’

 

Yes Jack, but you like countless others did not claim, nay COULD NOT CLAIM BECAUSE YOU HADN’T HAD AN ACCIDENT – GEDDITT?

 

Mr. Straw added: ‘Claims management companies are parasitic. In any other walk of life, we would describe this racket by referral companies as bribery.

‘These practices are leading to very substantial (insurance) increases on law-abiding motorists.’

 

Jonathan Djanogly said the Government intended to band the ‘merry-go-round’ of referral fees which have sent premiums rocketing.

 

He noted: ‘You only have to turn on daytime TV to see lots of dodgy solicitors’ firms which are part of this racket.’ He said there were two firms of solicitors within 100 yards of his own front door offering ‘£600 for a referral.’

 

Memo to Justice Secretary:

If dodgy solicitors are advertising on tv, then bring them to justice now!! Haven’t you heard about the Advertising Standards Authority?

 

Justice Minister Jonathan Djanogly told the committee the Government’s decision to ban the ‘merry-go-round’ of referral fees was ‘appropriate’ and had been ‘generally welcomed’.

 

Referral fees were part of the ‘sick, suing culture’ that was keeping premiums artificially high: ‘We want the benefit to feed through to the consumer in the form of lower premiums.’…and fair compensation settlements!!! 

 

He believed the Government’s reforms would bring commons sense to the system by weeding out greedy claims, noting how under the current system: ‘If you are a claimant and have no chance of losing, you are almost crazy not to sue. Why wouldn’t you? That’s what we propose to reverse.’ 

 

This is getting rather tiresome. Will somebody PLEASE tell the UK Justice Minister that an injured person wishing to make a claim has to actually prove negligence? Ye gods – does he think that people claiming compensation just have to ask the insurance companies nicely?

 

Keen to get in on the act, or is it the feeding frenzy, roads Minister Mike Penning condemned the claims firms as ‘ambulance chasers’ noting: ‘As a human being I find it very difficult that any organisation would seek to profit from others’ injury. Yet fifty per cent of claims are personal injury claims.’ 

 

This comment is about as crass and unthinking as it is possible to get, even for a government minister.

 

Critics say soaring premiums are tempting some to drive uninsured – with an estimated 1.3 million drivers now on the road without insurance.

 

A word anyone about insurance company profit margins or their active participation in and encouragement of referral payment schemes?

 

MPs on the Transport select committee report have already condemned the current system as ‘dysfunctional’. We take it they mean the claiming ‘thing’ and not Mr. Djanogly’s department…although that story isn’t over yet, not by a long way.

 

Paul Evans, chief executive of insurance company AXA UK, said increases had slowed to about a 1 to 2% rise a month but added:’ we shall continue to see continuing increases in the months to come …

 

aye right enough, as he squeezes every ounce of profit out of claimants before his game is rumbled by a myopic government and an enraged public who aren’t as gullible as he thinks.

Claiming compensation for personal injury. Myth v Reality -Take 2

October 5, 2011/0 Comments/in , , , /by

Another insurance industry ‘compensation culture’ myth.

 

 

Myth  

 

Most people who claim compensation for personal injury are just looking for a source of extra money in a recession – they should just ‘grin and bear it.’  For people read ‘the undeserving injured…’ 

 

 

Reality  

 

The key issue for the injured person and their family is whether they can afford not to seek damages, particularly if they are unable to continue working or have to change jobs as a result of their accident.

 

In any event, the amount of money awarded is far from being a ‘lottery’ win. In the UK damages in personal injury cases are based on very precise calculations, refined over many years, which reflect the extent of the injury and the earning capacity of the victim.

 

The process is designed with one aim in mind – to put the injured party back to where they were before the accident. Thus a twisted ankle claim will not attract a multi-million pound sum, whereas a brain-injured survivor of a road traffic accident might well receive a very large sum of money to pay for a lifetime of medical care.

 

Insurance companies know this very well and they are not about to sanction overly generous compensation claim payouts under any circumstances. The idea that hurt and injured people are scamming the system and receiving ‘over the odds’ payouts is absolutely ludicrous – but that doesn’t stop The Daily Mail reporting it as fact…

 

We welcome your thoughts on the ‘compensation culture’ and would like to know if you agree with us that the vast majority of accident compensation claims in the UK are made by trustworthy people seeking justice and fairness for themselves and their families.

Claiming compensation for personal injury – Myth v Reality

October 5, 2011/0 Comments/in , , , /by

There has been a lot of recent press coverage aimed at perpetuating the myth of a compensation culture. Much of this PR effort has been orchestrated by the insurance industry and swallowed ‘hook, link and sinker’ by the government .

 

We would like to redress the balance and provide a reasoned argument in support of the right of hurt and injured people to seek fair compensation.

 

    

Myth 

 

We live in a compensation culture where people sue at the drop of a hat for even the most trivial injuries.

 

Reality

  

In order to make a successful claim for personal injury compensation an accident victim has to prove that they have been hurt or injured. Unless the evidence supports the claim the case has no chance of success, ever, period. Spurious damages claims may grab the headlines but they will never see the light of day in court. Anyone can claim compensation but it’s the follow-through that counts and the papers never report on the half-baked claims that never succeed.

 

We are only concerned here about real people who have suffered real injuries.

 

The fact is that many people still don’t realise that they have a right to claim compensation if they have been hurt or injured in an accident that wasn’t their fault.

 

We know from research carried out by the Citizens Advice Bureau that over 60% of people entitled to make a claim for compensation fail to do so. From our own experience, we find that many people who go on to become clients of the firm are unsure about making a claim for a variety of reasons. It’s our job to help accident victims and their families understand their rights and guide them through the legal process.

 

We understand that some people are affected by the myth of a ‘compensation culture’ and may be concerned about what family, friends and even collagues at work will think if they make a claim.

 

For instance, passengers injured in a car driven by a family member or a friend can become distressed by the very thought of seeking damages and workers can be unwilling to claim against their employers for fear of reprisals or victimisation.

 

The reality is that hurt and injured people have a hard enough challenge coming to terms with the effects of their accident without having to deal with the added and unnecessary stress of worrying about paying their bills and coping with their rehabilitation. 

 

We would like to know what you think about the ‘compensaton culture’. We believe that accident victims are coming under increased pressure not to claim compensation and that many are being bullied into accepting low-value, unfair offers from insurance companies. Do you agree?