Know How: Justice Works

Know How: Justice Works?

Personal injury claims have been in the news this week after prison sentences were given to three individuals who had been found to have brought false claims for whiplash.

Oh dear. Organised gangs involved in “crash for cash” are a blight to insurance companies and genuinely injured victims involved in road accident. A common complaint is that the cost of these fraudulent claims are causing an increase in the annual premiums of ordinary motorists as it investigating these claims takes substantial resources and money. Money, we might add, that the insurance industry has in abundance as they lobby the government on all matters that affect their massive returns.

So how has the government been dealing with this?

In a nutshell, to cut the costs that the lawyers make.

There have been several changes in the rules over the years:

• Firstly, when the insurance company had to pay the solicitor a Success Fee (a percentage increase on the lawyers costs for pursuing a claim on a “No Win, No Fee basis”), the government capped the Success Fee at 12.5%.

• Thereafter came Predictive Costs for the solicitor if the claim settled by negotiation without Court proceedings. Predictive Costs were costs calculated on the basis that the solicitor would be paid £800 + an amount equal to 20% of the amount of damages.

• Then came the Fixed Costs that applied to all claims where the value of the compensation was under £10,000. Here the solicitor would earn £1,200 for cases that settled quickly.

• Those costs were then reduced to £500.

• Then came costs that applied to compensation over £10,000 but less than £25,000. Here the solicitor would earn £800 for cases that settled quickly.

• The court rules were radically overhauled and fixed costs applied to all personal injury cases under £25,000 where court proceedings were issued.

• And finally, and more recently, the fee that a medical expert can charge for a medical report has been capped (It was £225 but is now £180).

So what has this got to do with fraudulent claims? Nothing. How can reducing the fees that the solicitor earns affect the fraudulent claims of the sophisticated gangs? How is paying a doctor less going to increase the protection against fraudsters? Answers on a postcard.

The government has more in store for personal injury claims too. New rules relating to fundamental dishonesty could be used to strike out claims. There have been proposals to raise the limit that an injured person can make a claim for personal injury and abolish compensation for minor injuries or prevent a person claiming personal injury unless they have a “loss of function” of 15% or above. Quite how loss of function would have been measured we can only guess.

The fact is the government and the insurance industry has got its sights set on injured people. We promise however to fight for your corner should you ever need us.

If you wish to discuss this article then please contact us.