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Friday, 4 July 2014

Cracking Whiplash - the latest instalment

There is mixed news today for victims of motor accidents and their advisers, in the fourth report of the transport select committee on the cost of motor insurance.

It is disturbing that the committee express concern that lawyers are commissioning unnecessary medical reports to maximise their own income. This refers in particular to the obtaining of psychiatric evidence. It is not surprising that the Association of British Insurers has weighed in and alleged that unqualified individuals are assessing psychological injury. If any lawyers are sending clients to unqualified experts then they deserve all they get. But it is hard to envisage any circumstance in which this would be worthwhile. Insurers and/or the courts would be quick to reject any such unreliable evidence.

I suspect that this is a tactic by the ABI to try and get any psychiatric evidence barred in whiplash cases.

Solicitors actually have no choice here. The Solicitors’ Code of Practice has 10 Core Principles one of which is to act in the best interests of each client. If a client describes symptoms consistent with a psychological injury then the solicitor has a professional duty to investigate. If a solicitor fails to do that and it later turns out that there is such injury then they are likely to be sued by their client and possibly disciplined. This is not a matter that can be dictated by the ABI.

The committee has suggested extending the idea of accredited panels of experts beyond whiplash. Apart from very minor injuries it is hard to see how this can work. In the case of serious or complex injury there can be a range of opinion with wide disagreement between experts. It is hard to see either side in such cases wanting to commit to a single opinion. It is the job of the court to weigh the evidence in those cases. This is something which courts in this country have done for centuries.

The committee supports the proposed ban on solicitors owning medical agencies and from offering inducements to their clients. I think the first is inevitable and the MOJ seem committed to this. As far as inducements go I am far from convinced that they encourage dishonest claims. If a criminal is of a mind to cheat a few thousand pounds from the system, the inducement is the money not the iPad. But if it helps restore credibility for victims then a ban may not be a bad thing.

The committee's criticism of the insurance industry focuses on their continued practice of making offers without medical evidence. They call for these to be banned. I would suggest that this goes to the core of the problem. The likelihood of getting a settlement with no scrutiny by way of evidence, presents a huge temptation to fraudsters.

Anyone involved in these cases has to be committed to eliminating fraudulent claims. They add to the cost of insurance and undermine the credibility of the overwhelming majority of genuine victims. These proposals are an interesting contribution to that process.

But there are still concerns that there is a presumption that there is a compensation culture and also that most claims are not genuine.

The other concern is that lawyers are accused of being in it to make money for themselves. At a time when record numbers of firms are closing or quitting this area of work that is a fantasy.

The full report is available here –

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