Practice at the Bar provides an interesting perspective of the country’s economic ups and downs. I think many of us would cite anecdotal evidence that as soon as the economy begins to contract, claims where fraud is an issue begin to spike. Whether this is due to defendants becoming more aware of the pennies and looking more closely at claims, or whether it is due to a genuine increase in dishonesty, is a question I couldn’t begin to answer. My suspicion is that it is most likely a combination of the two.
Trivial and fraudulent claims in the motor industry are one of the most publicised areas of criticism. Following on from its pledge to ban referral fees the government announced yesterday an intention to “act” to stop “trivial claims”. This issue is one that vexes many lawyers practising in the sphere of personal injury. Whether a claimant or a defendant practitioner (or both) most of us believe that a genuine victim with a genuine loss should be compensated. It seems unfair to introduce wholesale bans on certain types or levels of claim that will punish the innocent because of the sins of the guilty. Equally, anyone with a passing understanding of the motor claim world must agree that there is a pernicious and rotten problem that must be addressed. The statistics cited by the BBC yesterday in its coverage of this issue made for some sobering reading:
“Insurers say whiplash claims cost their industry £2bn a year and add £90 to the average annual bill.
Number 10 said Britain had become “the whiplash capital of Europe”, with 1,500 claims a day for even the most minor accidents.…
The MPs said there had been a 70% rise in motor insurance injury claims in the past six years – despite a 23% drop in the number of casualties actually caused by road accidents – and whiplash accounted for 70% of the total.
That amounted to roughly 554,000 whiplash claims in 2010-11.”
The proposal put forward by the Commons Transport Select Committee is that “the government should bring forward primary legislation to require objective evidence – both of a whiplash injury and of it having a significant effect on the claimant’s life – before compensation is paid.”
It is difficult to know what objective evidence there can be of an “injury” that cannot be verified by medical tests and relies on self-reporting. If the answer was this easy we might be deploying it in practice already.
David Cameron concedes that there is “no silver bullet” that can address this problem. It will be interesting to see whether anything in fact happens, or whether the courts are left continuing to wade through the detritus, trying (often unsuccessfully I suspect) to sort the genuine from the fraudulent.