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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.  

  

‘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.

“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…