Last week Scott Rees & Co asked the question “are insurers punishing blameless drivers?”, amid claims that savings made from the abolition of whiplash claims would be passed on. Now we ask the question, ‘are those savings being passed on at all?’, as new data suggests that insurers have merely pocketed the half billion pounds in savings, rather than rewarding motorists.
Restricting access to justice
In 2012 legal reforms were made by the Ministry of Justice (MoJ) that changed the way expenses were recovered in personal injury claims. The reforms were the first step on a plan to reducing the amount of claims made and save litigation costs. Known as LASPO (Legal Aid, Sentencing and Punishment of Offenders Act) the reforms limited recoverable costs when a claim was made.
The regulation attempted to reduce the spend on the £2.1 billion a year towards legal aid as well as combat fraudulent claims by reducing recoverable costs which heavily affected claims of lower values (including whiplash). Doing so however came under scrutiny from law firms as simply dissuading fraudulent claimants came at a cost to those with genuine whiplash injuries, restricting access to justice.
Passing on promise
Insurance firms attempted to quell some of the backlash by promising to pass on savings made as a result of the reforms, to drivers (particularly those with no claims bonuses).
With the more made and three years of LASPO now behind us, data has emerged that the insurance industry can boast savings of over £500 million. Yet none of the savings seems to be heading the way of the premium paying motorist. Recent research has found that premiums are still on the rise, even for those making no fault claims.
Louise Ellman (Chair of the Transport Select Committee) spoke on the imbalance between the savings made by insurers and premiums paid by drivers, stating “The bottom line is that the insurance industry promised that they would reduce premiums as whiplash claims fell, and if they haven’t done it, they’ve reneged on their promise. Fraud must be wiped out but the insurance industry must also honour its promises.”
Failing motorists
Motor insurers, despite not delivering on the promises, continue to push for further reforms. These include upping the legal aid limit for small claims from £1,000, to £5,000. The plans, which have currently been placed on hold due to the cabinet reshuffle, originally intended to prevent solicitors from representing clients on a no win no fee basis for injuries worth less than £5,000 (as a standard whiplash claim would be). This places large burdens on other injuries like broken bones which may also just fall under the £5,000 limit. It also represents a scattergun approach to dealing with fraud, punishing legitimate claimants as well as restricting fraudulent claims.
Protecting legitimate claimants must be a priority as everybody who suffers an injury should have the right to seek affordable legal aid. Thankfully for accident victims there are legal challenges currently underway, including the “access to justice” campaign.
The further reforms have also not yet been implemented which enables you to still have legal representation for injuries of less than £5,000. If you, a family member or a friend have unfortunately suffered an injury in the car, out and about or at work and need legal help, call the experienced team here at Scott Rees & Co on 01695 722 222 or begin your claim today by using our online form here.
Lines are open from 9am to 7pm weekdays and we also run a recommend a friend scheme allowing you to earn £250 by passing your friends or family onto Scott Rees & Co to help them receive the quality legal aid they need following an injury.