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Thoughts and Musings On The Battle Between Injured Claimants And Insurance-Backed Defendants

For donkey’s years lawyers representing Claimants in personal injury and medical negligence claims have, quite justifiably, held a deep-seated and healthy mistrust of insurance companies.

The law has been changed again and again by successive Governments who dance to the tune of the insurance lobby.

First it was the removal of Legal Aid to fund the bringing these claims.

That was, to all intents and purposes, replaced by the introduction of no win /no fee agreements which meant that the lawyer would receive no payment whatsoever if the claim failed, but would force the insurance-backed Defendant to pay a success fee on top of paying the costs of running the claim.

Alas, the insurance lobby did not like that, so the Government changed the rules again so that the success fee was paid out of the client’s damages.

But the insurance lobby did not stop there.

They then decided that the costs they did have to pay were too high, so the Government imposed fixed costs for all types of personal injury case apart from medical negligence cases.

Guess what? The insurance mob are now wanting to fix costs for medical negligence cases!

The piece de resistance was the introduction of a brand-new set of rules for road accidents occurring after May 2021 which slashes the compensation injured persons receive and does not provide for any legal costs at all!

Ah, but were there any sweeteners and promises on offer from the insurance companies?

In terms of road traffic accidents, which, understandably, is the most common type of claim given the sheer number of road accidents, the insurance industry promised that car insurance premiums would be lowered. They promised this before each of the above changes came into force.

Surprise, surprise, they haven’t.

The following is an article which appeared in the Law Society Gazette in late January 2022:

Annual figures show motor PI claims falling sharply in 2021

Annual figures published by the government have shown that the number of motor claims fell dramatically in 2021.

Motor injury claims reported to the Compensation Recovery Unit – considered to be one of the most accurate reflections of the claims sector – fell by almost 20% last year to 398,051.

In the same year the Civil Liability Act came in to force, reducing the damages available to successful claimants and requiring them to use a new portal, Official Injury Claim, for all claims worth less than £5,000.

The CRU figures were revealed after a freedom of information request by the Association of Consumer Support Organisations (ACSO) and show the full-year statistics for the first time.

Between October and December 2021, motor claims fell by almost 30% compared with the same period in 2020. The figures will be affected by Covid-related restrictions on travel, but overall, there has been an annual drop of almost 40% in three years.

Matthew Maxwell Scott, executive director of ACSO, said the government had succeeded through the portal and new tariff levels in placing motor injury claims in a ‘state of permanent lockdown’.

Maxwell Scott: Government is succeeding in placing PI sector into ‘permanent lockdown’

‘From the pre-pandemic mark of 653,893 claims in 2019, the incidence of motor injury claims has plummeted by a quarter of a million since, a drop of just under 40 per cent in three years,’ he said. ‘That is an astonishing reduction and will have had a significant impact on the amount of injury claims costs paid out by insurers.’

Maxwell Scott said the falling claims numbers were not reflected by any reduction in motorists’ car insurance premiums, with many consumers saying their insurance costs have gone up this year. He added: ‘As the cost of living soars, it is a nonsense that insurers should hold onto these excess profits without giving hard-pressed motorists a financial break, especially as the government’s own figures confirm a big drop in claims last year.’

The Association of British Insurers responded by saying figures show that the average private motor insurance premium paid is currently at its lowest in five years, as motorists benefit from a competitive motor insurance market.

Am ABI spokesman said: ‘This in part reflected fewer claims during lockdowns, and despite cost pressures around rising average repair costs. Throughout the pandemic, motor insurers gave added support to their customers, including in some cases adjusting premiums to reflect lower mileage.

‘The industry regulator the FCA has confirmed motor insurance premiums for some new customers could rise as a result of the recent motor and home insurance pricing reforms. The FCA also acknowledged that ‘overall firms providing home and motor insurance are profitable, although there is no evidence that these profits are excessive’.’

The CRU figures also show that clinical negligence claims leaped 37% during 2021 to 17,425. It is not clear what caused this increase, but the first lockdown appears to have been a factor.

So, number of claims have plummeted and premiums seemingly going up, despite the squeals of discontent from the insurers.

Confused.com says premiums increased by 5% in the last quarter of 2021.

MoneySuperMarket put the increase at 7% during the same period.

Compare The Market says the average premium rose by £42.00.

Who to believe?

Royal & Sun Alliance’s latest declared gross profits?  £718 MILLION.

Aviva’s latest declared operating profits? £3.16 BILLION

You can draw your own conclusions.

Richard Whitaker
Solicitor
Din Solicitors