You would have thought after all the campaigning and success in convincing the government to slash legal fees, that the insurers would think their work was done. Well according to a leading figure at one of the biggest car insurers in Britain, this is not the case, as he revealed that the next step was to reduce the damages whiplash claimants receive from road traffic accidents.
Direct Lines Managing Director of Personal Lines, Tom Woolgrave, told the Association of British Insurers (ABI) conference that the government needed to take a look at whiplash rewards if they wanted to sustain the drop in car insurance premiums that had already taken place since the legal cost reforms.
He said: “The big element still is the general damages we pay for claims – there is a genuine public policy debate about the rights of the claimant to damages versus the cost to everybody paying for premiums.
“We can take out all the exaggerated and fraudulent claims but (further premium cuts) will not happen unless damages come down.”
The claim from Mr Woolgrave is bound to aggravate those who represent the personal injury industry and misses the point of the reforms in the first place.
Yes the government acted on the promise of lower insurance premiums but their main motive for the legal cuts was to cut back on the number of fraudulent claims such as some whiplash claims. Reducing the damages is not a way to resolve this and serves only to increase the profit margins of the insurers themselves.
Scott Rees Partner and the Merseyside Coordinator of Motor Accident Solicitors Society (MASS), David Byrne (pictured) has criticised the proposal saying: “The damages for a victim of whiplash are important in most cases to aid recovery, as well as cover the losses incurred from their period of injury, which it is important to remember, happened because of the negligence of another road user.
“Proposals like this, combined with the campaign to increase the small claims limit are not about stamping out fraud from the industry as the insurers would have people believe, but instead about needlessly attacking the rights of the genuine accident victim’s access to justice.”
It is perhaps ironic that Direct Line are the company that would make this suggestion as they announced last month of their intention to extend their own cost cutting plan and pledged they wanted to slash 2000 jobs to help them reach their cost savings programme target, which was up from £100m last year.
It would seem that their plan to achieve this target includes stripping the genuine whiplash victim of the damages that they have a right to receive in order to aid a full recovery.