One of the UK’s leading insurance companies, Aviva, have suggested in a new report named ‘Road to Reform’, that a care rather than cash approach to compensating victims of whiplash injury is the best way to bring an end to the mythical compensation culture. Whilst a great headline, what does this latest wheeze mean really?
The report, which has been met with fierce criticism by claimant solicitors, suggests that by just providing rehabilitation for those who suffer a whiplash injury on the road and no financial damages, £1.4 billion could be saved in motor insurance costs. Insurers stand to make a handsome return for themselves and their backers if they can get the Government to ban whiplash and only allow physiotherapy costs.
However, if the Government so limits claims as to exclude injury, we may as well scrap insurance and save the insurers the cost of issuing policies. Motor insurers are on a slippery slope of arguing for their own abolition. What is insurance for if not for meeting claims? It may as well be scrapped if we eliminate claims altogether in practical terms.
The report ignores completely how a Claimant will cope with the financial impact of an injury or how a Claimant will even access the care that the insurers want to replace money with. Law firms won’t be doing it. CMCs won’t be doing it. Are insurers going to do it? Really? Are these the same insurers who fight every head of claim as it stands? Yes it is.
In a self serving statement, Chairman for Global Insurance/CEO UK & Ireland General Insurance, Aviva, Maurice Tulloch said in the report: “Motor insurance premiums are at the heart of the focus on the cost of living. If the UK is serious about reducing the cost of motor insurance for the long term, then it is clear we have to address the way we compensate minor whiplash, using rehabilitation only to treat genuine, minor injuries.”
Once again, the insurers trotted out their usual line about “fraud” as they define it, with not a shred of real evidence to back it. Tulloch ploughed on with his tendentious remarks claiming: “We believe that the current system offers financial incentives for personal injury lawyers, claims management companies and fraudsters, which inflates the cost of motor insurance.”
He does not say how this happens at all. Given that costs are fixed, it can not be the costs themselves that “inflate” claims. Parliament set them Mr Tulloch. So is he saying that it is fraud? No, he isn’t. He sticks the “F” word in like a magician waves his magic wand to distract you from his sleight of hand. He is pinning it all on the fact that claims themselves make insurance costs go up.
But hang on! Isn’t that what insurance is FOR? We don’t need any cover if we can’t be claimed off. Maybe insurers believe that they should be paid and there should be no claims at all.
Yet again the allegation of a compensation culture is given another outing. Government itself proved that this is a media spin and not a fact at all. This does not stop Mr Tulloch as he crusades against a culture that does not exist in a war to make bigger profits for the insurers. He continues with: “It’s time to put the brake on the UK’s compensation culture. Should we continue to compensate minor, short-term injuries with cash, which drives up the cost of insurance for all of us?”
How can anyone take this seriously when such remarks are the platform for change? Remarks that the Government unmasked as being utterly wrong.
Warming to his theme, Mr Tulloch then reaches a conclusion that beggars belief: “Although premiums have dropped since last year’s civil litigation reforms were introduced, it is clear that if we do not address the excessive numbers of minor injury claims and the escalating costs surrounding these, then premiums will have nowhere to go but up.”
Follow that crazy logic? Claims are down. Costs are fixed. But insurance costs are escalating. How does that happen? If insurance costs are escalating, maybe insurers should economise on the spending on reports like this one.
Obviously claimant lawyers disagree strongly with Aviva’s findings. Scott Rees & Co Managing Partner Royston Smith responded to the suggestions made in the report by saying: “To suggest such a scheme is showing complete ignorance of the wider impact a whiplash injury can have on a victim’s day-to-day life.”
“It is just not logical then to expect someone to cover the potential loss of earnings amassed from having to take such long periods of time off work and more importantly, it isn’t fair to genuine victims, who lets not forget didn’t ask to be in an accident in the first place…”
“I fear that Aviva once more have their own profit margins in mind when rolling out this latest report and are not interested in the needs of the genuine accident victim. Yes, it is important for everyone to work together to stamp out fraud within the profession, but using fraud to justify such a change as this is to mix together oil and water. Fraud is immaterial to the point at issue. Rehabilitation of injured people means that they are indeed injured and need that treatment. This is a shameful attempt to seek a change in the law in a way that is detrimental to access to justice and punishes genuine claimants. It is so wrong headed and is definitely not the way to go about it.”
“Their suggestion to raise the small claims limit is ludicrous on its own. How can you expect accident victims to enter a courtroom without legal representation to take on the insurers and their qualified lawyers and hope to get anywhere near the compensation they deserve? Again, this is simply not in the real world. The sooner the insurance industry work this out, the quicker we can all move forward and focus on settling claims more quickly and efficiently.”
The Association of Personal Injury Lawyers also responded to the report in a similar vein with the Chief Executive, Deborah Evans, saying: “Car insurance should help people when things go wrong – that is the point in having cover. And Compensation exists to help injured people put their lives back on track as much as possible. One in five people with whiplash still suffer symptoms a year later, and they will certainly find that the eight pence a day on their premium to cover them is worth it.”
“It’s worth remembering that more than half of the cost of the average premium is spent on repairs, staffing and overheads, according to the Association of British Insurers. The Office of Fair Trading found the insurance industry’s approach to car repair and replacement is “dysfunctional”, and adds an unnecessary £225 million a year to the bill for consumers.”
You can read the full Aviva report here.
Image source(s)
1. Aviva; https://www.aviva.co.uk/