Insurers accused of ‘rank hypocrisy’ over pre-medical settlements

The chair of the Motor Accident Solicitors Society (MASS), has accused the Association of British Insurers of “rank hypocrisy” over the issue of pre-medical settlements.

Speaking at the Society’s annual conference Paul Nicholls said that despite the use of pre-medical settlement offers set to be outlawed in April 2020 insurers were still using the system in an effort to reduce compensation payments.

“One of the key sections of the Civil Liability Act is the banning of pre-medical settlements, which we strongly supported,” he said. “Why then is it that some insurers are still offering significant numbers of pre-medical settlements?

“We’re constantly hearing that lawyers are gaming the system for their own advantage. Why is the ABI not getting its own house in order? It is rank hypocrisy.

“The practice is going to be banned, so why continue to do it.

Spirit and letter of the legislation

“I call upon all insurers to stop making pre-medical offers now. There is no need to wait for the legislation to be implemented. You should adhere to the spirit and letter of the legislation.”

He said that the speech came at a time when the legal system is increasingly under pressure across multiple fronts.

“Without wanting to sound too gloomy, we have the threat of fixed costs, online courts, the presence of stubbornly high court fees, a lack of judges and longer judicial waiting time, and the sale of half of the court stock leaving an insufficient court infrastructure.

“The legal aid budget has undergone an unprecedented period of shrinkage. And some deride the judiciary as ‘enemies of the people’ rather than just disagreeing.”

Nicholls added the threat to access to justice is very real and I can assure you that MASS will continue to campaign at every opportunity to protect the right of victims to pursue justice following injury claims – particularly road users.

“Above all else though, we want an orderly claims market for the RTA victims,” he added. “If the reforms are to be implemented, we want them to be introduced with minimal disruption to the claims process.”

Morphing claims process

On plans for the new portal to handle RTA claims that are valued at £5,000 or under he said the original aim had now been lost and the proposal looked nothing like it had been intended to do.

“The proposed new claims process has morphed into something far removed from the original intention of combating fraud to a process where claimants are supposed to represent themselves, professional legal advice is squeezed, and the savings are not passed on consumers but retained by insurers,” he explained. “George Osborne said in 2015 that his government was ‘determined to crack down on the fraud and claims culture in motor insurance’.

“The 2017 Conservative manifesto said, ‘we will reduce insurance costs for ordinary motorists by cracking down on exaggerated and fraudulent whiplash claims’.

“So, what are we going to have? A new Portal with no automatic ID checks, searches and fraud searches.”

It issued “an open invitation to claims farmers, both domestic and international, to directly pursue claims for the first time”.

Nicholls added that the planned implementation in April 2020 needed to be delayed given the amount of work that was still to be done.

“As Ministers have stressed, they will not rush the process and want a quality system that is ready. We could not agree more. Don’t rush it – continue to engage with us, but don’t press on for the sake of meeting an illusory target date,” he said.

“We have all heard talk of a ‘minimum viable product’ being sufficient. That does not safeguard accident victims and fully support litigants in person. We still don’t even know what that minimum viable product is. The new Portal must be fully fit-for-purpose and properly tested ahead of launch.”