Time to weed out the bad – October 2016
Donna Scully, former Chair of MASS and Partner, Carpenters
tells us why it’s time to weed out the bad
We now have a pretty good idea that the victory celebrations in some quarters were premature. The Ministry of Justice has told at least one journalist that the “whiplash” consultation will still be published shortly, possibly before Christmas. It may not be a priority, but there are no signs that the government has yet been persuaded to steer away from its disastrous course.
At the heart of the matter are two fundamentally different views on the RTA sector. The Government, and of course the insurance industry, believe that there are too many claims and that this represents too high a cost for society. On the claimant side, we argue that the overwhelming majority of people who pay their compulsory insurance premium are genuine so that if they are unfortunate enough to be involved in a motor accident, they will receive adequate support, recompense and justice. The last thing we should want to see is them forced into the hands of bad CMCs and, even worse, ‘McKenzie Friends’ who are unqualified, uninsured, unqualified and driven solely by money.
We should, however, be considering how the legal sector can do more than protest and shout from the side-lines. The debate has frequently moved away from one on combating fraud, but we must continue to do all we can to drag the debate back to focus on solutions to this complex problem.
It has become vogue recently to refer to the dysfunctionality of the claims market, acknowledging that it is riven with problems, but all too often these problems are not outlined. We need to be unafraid to start spelling out these unwelcome characteristics. No matter how close to home they may be. There should be a zero tolerance to bad behaviour from any part of our industry.
Most lawyers and legal firms are honest and committed to providing the best possible professional service to their clients. There are clearly some however – and we have all heard the anecdotes – that are prepared to take on claims with few checks about their honesty and validity. This is troubling and highly corrosive for the legal sector, and we will all potentially suffer because of a few rotten apples. The Solicitors Regulation Authority’s record in identifying and pursuing the miscreants has been woeful and must improve. The Fraud Task Force has said it must improve and there is now a commitment from the SRA that it will.
Although there was a welcome fall in CMC PI turnover in 2015-16 to £215 million, that is still a lot of income for a sub-sector that is expressly not allowed to take referral fees or register with the Portal and pursue claims independently. The rushed and ill-considered LASPO regime may have forced a change in business models, but it has not prevented huge amounts of money passing through the hands of effectively middle-men/women. We know that CMC generated claims are more likely to be cases older than 12 months, and we know that these cases are more likely to be fraudulent or exaggerated. Complaints about automated cold calls and SMS may have fallen, but PI still vies for the top slot for the sector generating hundreds of thousands of unwanted communications.
We all know though from the Fraud Task Force that problems exist across the sector. From the insurers who are more likely to offer pre-medical offers to the deliberately inflated costs for credit hire and rehabilitation. The lack of effective and proactive regulation. The list goes on.
We are told that the cost to society is too high and motor insurance premiums are too high. It would though be dishonest and perverse to blame innocent accident victims seeking justice for all these faults. The Government and regulators need to take a long, hard look across the sector, before dispensing an arbitrary and misguided judgment upon genuine accident victims. As the professionals who still represent these people – unless the government gets its way – it is surely our duty to start trying to sort out some of these problems before it is too late.