Expert View: Let's combat fraud, but retain justice

Winter is coming. I’m not referring to Game of Thrones or even the change of seasons. I am talking about my growing sense of foreboding as it becomes clear that, while the Government’s personal injury proposals may have been delayed and are not a ministerial priority, they are still very much coming. The Ministry of Justice is still preparing to plot a course that will have far reaching implications for genuine claimants and all those who seek to protect their interests.

Fighting fraud should be the primary goal of the coming reforms, but I fear that it has morphed into something far more ambitious in scope, certainly more pervading, and in my view, deeply troubling, with an uncertain outcome. The reform programme will likely seek to end and prevent compensatory claims across the board for so called “lower value” and “non-serious injury claims”. Hurrah many of you will shout. The end of the compensation culture. The end of unnecessary claims. A dramatic reduction in costs.

The lessons of the past have clearly not been learnt and appear to be in danger of being repeated. LASPO was supposed to tackle the so-called compensation culture. The early operation of MedCo has been beset by problems. Both were rushed, ill-thought out and the unintended consequences were ignored. Reforms that fail to actively engage with all sides of the sector have a history of not achieving what they set out to achieve. The ABI, IFB, MIB, FOIL and the regulators are undoubtedly key players in solving some of the problems in the sector, but what about claimant lawyers, who deal with some of the problems day-in and day-out. There are undoubtedly some bad lawyers, but they are most definitely a minority, and should not be considered the norm.

The Department of Transport estimates that around 710,000 people are injured to some degree in RTAs each year. That is a lot of customers who currently expect their motor insurance to cover them for just such accidents. Under the prevailing wind of change, a large percentage of these will be told ‘no’, you are not entitled to the cover and compensation that you expected. I fear they will feel very let down by us and the system.

There is always scope for sharing data and intelligence better, improving MedCo and a host of other practical measures. Instead, we are in danger of opening the industry to the worst excesses of a US-style market and a range of other consequences. We need genuine discussion and consideration of the impacts of these proposals, not a two-dimensional consultation about a set of measures that have already been decided. For an insurance market that needs predictability and limiting uncertainty, I cannot think of a worse course of action.

It must be right that the ideal outcome of any reforms is less fraud, less cost, protection for genuine customers and shutting the bad enablers out of the market once and for all.