Clarke vows crackdown over whiplash claims

Justice secretary Ken Clarke has vowed to crack down on whiplash claims ahead of a second ministerial summit this year with insurer bosses.

The meeting comes in the week that the Legal Aid Bill was given royal assent, although defendant lawyers want uncertainties cleared up over qualified one-way costs shifting (QOCS).

Roads minister Mike Penning, transport secretary Justine Greening, justice minister Jonathan Djanogly and minister of state Oliver Letwin were expected to meet insurer bosses and Biba on Wednesday. They were set to discuss plans to make it harder for whiplash claimants to get medical certificates while making it easier for genuine personal injury claims to be handled in small claims courts.

The ministers will report the results of the summit to Clarke, who is expected to lead the reforms.

The meeting follows up a summit in February, headed by prime minister David Cameron.

Insurers that were at the first summit, including Admiral, Direct Line, AXA and Aviva, are expected to attend the meeting.

Clarke said: “It is scandalous that we have a system where it is cheaper for insurers to settle a spurious whiplash claim out of court than defend it, creating rocketing insurance premiums for young drivers.

“Our common-sense reforms will put a stop to this. We will weed out fraudulent claims by tackling questionable medical evidence.”

Keoghs director of market affairs Steve Thomas urged the government to take strong action. “The government have really got to grasp the nettle on this, and look at fixed fees and drive them down.”

Meanwhile, lawyers have called on the government to clear up uncertainties surrounding QOCS, which was excluded from the Legal Aid Bill.

While most of Lord Jackson’s suggestions on whiplash and civil litigation costs were included in the bill, some will have to be brought in separately by the Ministry of Justice (MoJ).

One of those that will have to be brought in separately is QOCS, which would stop successful defendants recovering their costs from unsuccessful personal injury claimants, unless the claimant is very wealthy or misbehaved when they brought the original claim.

DAC Beachcroft partner Andrew Parker said that the unfinished parts of Jackson would affect insurers and lawyers, and also called for more urgency from the MoJ.
Thomas said he was concerned that the wording of the Legal Aid Bill and incoming alternative business structures (ABSs) could also give a loophole to the referral fee ban.

He gave the example of a law firm merging with a claims management company and a credit hire firm to make the payment of referral fees invisible.

But Parker said that this loophole was unlikely to work in practice, as ABSs are regulated by the Solicitors Regulation Authority, which is more interested in enforcing the underlying meaning of a ban on referral fees than sticking rigidly to the way the ban is worded and allowing firms to flout the ban.

The bill will introduce a ban on referral fees for personal injury cases and will stop success fees and after-the-event premiums being recoverable in no-win, no-fee cases.

It will also increase personal injury damages by 10% and ban cash payments for scrap metal.

A last-minute intervention by Clarke removed the recoverability of success fees from mesothelioma claimants from the bill.