Insurance Premiums – Law Society Defends Compensation Claims
In a recent high-profile row over rising insurance premiums, the Law Society has said the insurance industry must shoulder some of the blame and take responsibility for increasing motor insurance premiums.
Last week, The Commons Transport Select Committee said the rising number of personal injury claims was the ‘main reason’ why motor insurance premiums have become so high.
Following a hard-hitting report from The Committee, recommending stricter rules on the diagnosis of whiplash injuries, requiring objective evidence from an expert and proof of a ‘significant’ effect on the claimant’s life before compensation is paid out; Law Society Chief Executive Desmond Hudson defended such insinuations.
He said: “Claimants should not be scapegoats for an insurance industy that has ‘failed to sort itself out’.
“The motor insurance industry is profiting from providing what is in effect a public service, as it is a legal requirement to have motor insurance. It is up to insurers to fight cases that they feel are inappropriate.
If the insurance industry simply pays out when it sees the word “whiplash”, whether the case is justifiable or not, is it any wonder these claims are rising?”
Mr Hudson also said that the Society is willing to work in conjunction with the government, which is yet to reply to the report.
It is believed that the Ministry of Justice will see the report as justification for the civil litigation reforms, but the Committee explained that banning referral fees will have little to no effect, as insurance companies will only merge with law firms in order to appear under a different business structure.
The Forum of Lawyers and The Assocations of British Insurers both welcomed The Committee’s report, with The Forum stating that ‘legal costs attached to whiplash claims have been a defining factor in the inflation of claim costs’. The Association has also called for the rising price of solicitor fees to be looked into.
In opposition to this, the Association of Personal Injury Lawyers said that whiplash and similar injuries ‘can be extremely painful and often linger’, and The Access to Justice Action Group has expressed it’s ‘grave concerns’ over parliament’s plans to reduce personal injury claim numbers.