Public back reform to whiplash compensation

Research-shows-that-public-supports-reform-of-whiplash-compensation

Majority of the public positive about measures to fix the UK’s broken personal injury compensation system

Overwhelming view that legal costs are too high

Most people back Government plans to overhaul the personal injury compensation system, with nearly 9 in 10 thinking that legal costs in the current system are too high, according to an independent survey commissioned by the Association of British Insurers (ABI).

The ABI commissioned the survey as MPs prepare to debate the Civil Liability Bill that aims to simplify and streamline personal injury compensation for low value road accident claims, and reduce legal costs in the system.

Key findings from the survey conducted by Consumer Intelligence highlighted that:

  • Nearly 9 in 10 (87%) felt that legal costs were too high. For every £1 paid in compensation, on average an extra 50p is paid out in legal fees.
  • Two-thirds feel positive about the proposals to simplify personal injury compensation, including setting up an online process to make a low value claim.
  • 71% would be comfortable about making a claim online, rather than seeking legal representation.
  • A simple claims process was cited as the most important factor when making a low value personal injury claim by 37%. Ability to claim back legal costs was the least important – ranked first by only 7%.
  • Two-thirds surveyed cited a compensation culture environment as the main factor behind the trend of rising motor personal injury claims, despite a fall in the number of road accidents since 2005. This was followed by the activities of claimant lawyers (59%) and claims management companies (58%).

The reforms include increasing the Small Claims Track Limit from £1,000 to £5,000 for road accident personal injury claims; introducing a tariff of fixed compensation for pain and suffering for whiplash claims and developing a simple online process to register a claim.

Leaders of insurance companies representing 93% of the motor insurance market underwritten by ABI members have publicly committed to passing on cost benefits to customers if the reforms are implemented in full.

James Dalton, ABI’s Director, General Insurance Policy, said:

“This survey highlights significant public support for the Government’s plans to reform the personal injury compensation system. There is overwhelming recognition that legal costs are too high and need to be reduced. Most people recognise the benefits of a simple, streamlined system for dealing with low value personal injury claims, that preserves access to justice, and would be confident to use it.

“Reforms in the Civil Liability Bill will mean a fairer system for claimants, motorists and compensators. This is why the Bill’s provisions must be implemented in full, and not watered down.”