This article first appeared in Insurance Post, 26th September 2016
Headlines continue to scream out – compensation culture, crash-for-cash, ambulance-chasing lawyers.
They certainly appear to have been effective if opinion polls are to be believed, with a majority believing, rightly or wrongly, that the UK has developed an unhealthy compensation culture.
An argument could be made that such headlines have themselves contributed to a culture where otherwise law-abiding citizens have been tempted to have-a-go. That it is easy money. That everyone is doing it. That big insurance companies can afford it. That it is legitimate comeback for paying an expensive compulsory premium. That it is not their fault if they do have a go. All such positions are, of course, very wrong, whether they are applicable to 3% or 13% of claims.
The government’s proposed limitations and banning of claims, particularly around whiplash, are about to make a similar mistake, tarring everyone with the same brush.
They will wrongly assign everyone who makes a claim is either fraudulent, frivolous or an unnecessary expense, regardless of the circumstances of the claim, irrespective of fault or no-fault, injury or non-injury.
The best solution
Does the sector really believe that this is the best solution? Whether those seeking compensation are considered claimants, customers or victims, the whole claims sector – insurers, defendant or claimant solicitors – surely want the same thing.
It wants to look after the interests of the majority who are legitimately seeking recompense and justice after misfortune has struck. Introducing a regulatory regime where the just majority are penalised for the actions of the unjust minority is surely not the right way to tackle the problem.
This debate can all too easily descend into tit for tat abuse. Profiteering scheming insurers. Greedy self-interested lawyers. It really doesn’t help anyone. Both sides become entrenched and the result may well be a new market that is less regulated and more – not less – open to abuse.
A disorderly market that is potentially more dysfunctional than the present one should be unwelcome to the government, the insurance industry, the legal sector but most importantly for the accident victim.
Not too late for an alternative
Although it is the eve of the publication of the government’s proposals, it is not too late to develop an alternative approach, without the known and unknown unintended consequences that would follow. Collectively we can make progress on the many good ideas recommended by the Insurance Fraud Taskforce.
We can work hard to develop MedCo into a structure that meets its objective of delivering quality medical reports. We can work through the portal to improve the data provided to the Insurance Fraud Bureau. We could possibly look at ideas around notification of claims and referrer data.
Insurers could resist further the temptation to make pre-med offers, and take a robust position on claims they believe to be fraudulent rather than settling because it is cheaper than fighting them. Insurers and solicitors can build trust to collaborate on further extending data sharing, building on the Ask Cue PI website.
Wherever this current round of reforms ends up, there will still be claims. Parts of the sector have proved in the past to be remarkably resilient to change and regrettably innovative in adapting business models to benefit in a new regulatory environment.
Insurers and solicitors will not agree on some things, but it will require our collective energies to shape the claims landscape in a way that is fair, legitimate and affordable. The sector must surely agree about that.