When the government proposed and implemented the referral fee ban the main justification was that they believed it would reduce the amount of Road Traffic Accident claims (RTA claims). Well early figures are indicating that this couldn’t be further from the truth.
So far since the 1st of April the referral fee ban has had little to no impact on the amount of RTA claims being made, in fact the number of cases in the immediate aftermath has increased by 27% compared to last years total.
This has to make interesting reading bearing in mind the whiplash debate is to be held in the House of Commons next week and is bound to be a factor that the personal injury representatives in that debate use to press forward their concerns over the harsh reforms brought to the industry by the Legal Aid, Sentencing and Punishment Offenders (LASPO) Act.
So far since the implementation date of the referral fee ban there has been 79,483 claims reported in April this year which is around 17,000 more than last years total for the same month.
Association of British Insurers’ (ABI) Head of Motor Insurance James Dalton claims that this was expected explaining: “It is no surprise for me that April’s figure is high as claimant lawyers knew the gravy train was about to hit the buffers. Although we had the Jackson framework you still had people making £1,200 for cases before 30 April. The reforms will take time to bed in and behaviour will change over time.
“May is going to be the true test of what LASPO and the cost changes look like.”
The Association of Personal Injury Lawyers (APIL) has also had their say on the figures as well. A spokeswoman said: “We would expect the level to go up and down in some months as firms adapt their practices to the various reforms, but the number of claims registered for the year as a whole should remain steady as there is no reason to suggest that the number of injuries sustained has changed.”
She added that the proposed increase in the small claims court limit would not make much difference to the amount of claims made as claims management companies would seize on the opportunity to cash in on this and this would inevitably lead to what the government were looking to avoid, an increase in spam phone calls, texts and cold calls and more likely an increase in fraudulent claims.
Next week the whiplash debate begins and the Transport Select Committee has announced who will be representing each side. For the insurers it will be James Dalton (ABI), Dominic Claydon (Aviva UK), David Fisher (AXA) and Steve Maddock (Direct Line Group).
For the legal side it will be Desmond Hudson (The Law Society), Matthew Stockwell (APIL), Nigel Teasdale (Forum of Insurance Lawyers), Craig Budsworth (MASS) and Andrew Ritchie (QC).
All eyes will be on the debate as it is believed its outcome could play a large part in the government’s decision over whiplash reform.