The government and insurance companies would have us believe that compensation claims are spiralling out of control.  They indicate that more and more people are making claims and  winning huge sums from their employer, the NHS and motor insurers, and that this is contributing substantially to the increasing the cost of motor and other insurance, and adversely affecting the economy.  This simply isn’t true.

The Compensation Recovery Unit’s figures show that the number of compensation claims is actually falling significantly.  In 2017/2018, for example, motor claims fell to the lowest since 2010/2011 at just over 650,000: a drop of over 17% from around 800,000.  Employer claims also dropped in 2017/2018 to just over 69,000 from almost 81,500: a drop of 15%.  It is clear that earlier ‘reforms’ introduced by the government have already had the effect of restricting access to justice and, despite the figures above, which are produced by the government itself, it is ploughing ahead with implementation of the Civil Liability Bill, which had its second reading in the House of Lords on 25.4.18.  This bill plans to make changes to personal injury claims, limiting road traffic accident claims and increasing the small claims limit to £5,000.

Lords show some opposition to the bill

In debating the Civil Liability Bill recently, not all of the peers agree with the principles within it.  Baroness Berridge, for example, has reservations about the whiplash tariff and said that it is sad that the term

“compensation culture has come to be seen only as derogatory.  It is an important plank of any mature justice system.” 

She also asked the government why insurance companies, and not claimants, should get the compensation.

Lord Cromwell cautioned that not all claims should be viewed as excessive or fraudulent.

Peers will propose changes to the bill next month.

APIL discredits compensation myth

The drop in the number of claims prompted Brett Dixon, president of the Association of Personal Injury Lawyers (APIL) to say:

“This discredits the principles behind the Civil Liability Bill and “Injury claims are not behind the rising premiums.  The mischief clearly lies elsewhere.”

APIL is currently drafting amendments for consideration.

In its 2014 report, prepared in conjunction with the TUC, APIL discussed, and discredited, the myth that compensation claims were spiralling out of control, along with other popular compensation myths.  These are that:

• Workers are too ready to claim compensation

Not true!

Of around 600,000 people who become ill or are injured at work each year, six out of seven of them receive no compensation whatsoever.  The report says that work-based claims have halved since 2002/2003.

• Compensation payments are too high

Not true!

The report shows that 75% of people who claim for workplace accidents receive less than £10,000 and the majority actually receive less than £5,000.  Claims are very carefully calculated and are based on actual loss, such as loss of earnings and future earnings, care costs, medical treatment and pain and suffering.  Only those with the most serious injuries are able to win higher compensation.

Access to Justice, the group lobbying to protect injured people against government reforms, recently commissioned a report based on over 171,000 road traffic accident claims settled by 58 law firms.  The results showed that almost 80% of these cases settled for less than £5,000.   This means that, if the government’s increase in the small claims limit goes ahead, all of those cases would have to be handled by the Small Claims Court, with the claimant unable to benefit from a solicitor’s help – unless they pay the fees themselves.

• You can claim compensation for anything

Not true!

People who want to claim compensation for an accident have to be able to prove that the accident was due to someone else’s negligence and this negligence was foreseeable and led to the actual accident or illness.  This includes people making claims against their employers.

• Insurance companies shouldn’t have to pay out for occupational illnesses as they didn’t know about the risks

Not true!

When it comes to claims for mesothelioma and other asbestos related diseases, the risks relating to working with asbestos have been known since the 1940s, with some controls coming as early as 1931.  However, some employers continued to use asbestos and failed to provide warnings or protective equipment to workers.  Many of the claims that are now being made could have been avoided if employers had taken proper protective measures.  Companies that insure these employers knew what the risks were, but still provided insurance, collecting high premiums, so it is fair that they should have to pay out in successful cases.

• Many claims would not be made if unions did not encourage them

Unfair!

This is probably true, but unfair, as one of a union’s obligations is to prevent its members being injured or getting ill at work.  It is their duty to advise their members of their rights when it comes to claiming compensation.

• Lawyers keep their costs up by dragging out cases

Not true!

Graysons, and all other solicitors must act in the best interest of clients.  If solicitors were to drag out cases simply to increase costs, it would breach their duty to their regulatory body.  In addition to this, most claims are now ruled by new procedures that limit what a solicitor’s costs can be. Solicitors have no interest in prolonging matters.  APIL’s report also says that insurers could help reduce fees even more, and improve the rehabilitation of claimants, if they were to admit liability early in appropriate cases.

No legal help if government imposes changes

The Civil Liability Bill proposes changes to claiming personal injury compensation. These are to:

• raise the small claims limit for personal injury claims from £1,000 to £5,000, which means that claims of less than £5,000 will be transferred to the Small Claims Court and solicitor fees will not be recoverable – leaving some injured people with no legal advice or representation
• limit the right to compensation for ‘minor’ soft tissue injuries (includes whiplash) and making payment on a sliding scale, starting at £225

At Graysons, we think that these changes are unfair and will restrict people’s right to proper redress if they have an accident or sustain injury. Whilst we await the government’s decision on the proposed changes, we will continue to represent clients who have been injured through no fault of their own, so if you would like to discuss your accident or injury, please contact our experts now.  We will arrange a free of charge meeting in which we can discuss your case and advise on your prospects of success.  We offer a no win – no fee service on all claims and a straightforward, hassle free claims process.  You can find out more about making a claim for personal injury on our web pages.