The Government’s proposed radical reforms of the UK’s compensation culture could deny Access to Justice for the deserving, argues North Yorkshire lawyer Mike Willis
Is the compensation culture truly compensating – or compromising – our culture?
Is it so ethically, economically, or socially ruinous that its momentum must be dammed, or will the measures now being canvassed by Government lead to the loss of too many babies with the bath water?
At the end of the first week of the New Year on 6 January, before most businesses have had time to collect themselves after the Christmas Holiday, the Ministry of Justice’s consultation, Reforming the Soft Tissue Injury (“whiplash‟) Claims Process, will close. Its purported range of enquiry is broad, but its real vision and likely purpose is less so.
There is a heavy desire in the current political climate to curb the runaway excesses of the undeserving, exploitative or fat-cat-enriching injury claims industries. This desire hangs like pre-monsoon humidity over the legal profession and a wide variety of attendant enterprises. These businesses are purportedly professional, but are really just out to make some bucks.
For supporters of reform, the moral indignation is dressed in more censorious clothes. Statistics reflecting the cost to the insurance industry and resulting inflation of policy premiums; the profits of claims management companies; and the economic and social consequences for young drivers.
But for every statistic put up by proposers, there are plenty of others available to opponents. And the real likely consequences of a reduction of small injury claims, in strictly economic terms, are hard to predict and may, in fact, not be significant.
The current process
A familiar pattern typifies many injury cases. Following a minor shunt in a car park or city, street addresses are exchanged after a cursory examination of the respective vehicles reveals no obvious damage.
But within days, the motor insurer of at least one of them is presented with a claim by the other, followed in due course by engineers’ reports describing damage and repair costs beyond the value of the vehicle. These are accompanied by weeks of hire charges for an alternative vehicle pending repair and medical reports using well trammelled phrases to describe a range of physical and psychological injuries, not just to the driver but also to their front seat passenger and maybe one, two or more others – who may or may not in fact have been present – in the back.
The challenges and costs of disproving these claims are such that insurers all too often prefer to settle them, putting money into the undeserving pockets of parasitical claimants, claims management companies, lawyers, engineers and doctors. Oh … and in addition, the virtuous – or subversive – circle supercharges the insurance industry itself, whose brokers, underwriters, loss adjusters and claims assessors all make a better living from the economic growth.
Minor injury disputes of this kind, generating easy money for claimants and often lucrative returns for the adjunct service businesses, inevitably provoke dismay and sometimes disgust among defendants. Real anger surfaces if they are uninsured, or an overblown insured dispute leads directly to a substantial premium hike on renewal of their cover.
It can be a fruitful source of work for professional risk lawyers like me to defend insurance brokers or lawyers facing claims and complaints from aggrieved clients on the wrong end of an inflated action.
The Law Society, under its current energetic CEO Catherine Dixon, and this year’s President Robert Bourns (who between them seem genuinely to be trying to call the tunes which solicitors have wanted to hear from their Union for a generation), is focused primarily on opposing two of the most prominent proposals:
– Stopping or radically reducing compensation payments for minor soft tissue injuries, including whiplash, arising from road traffic accidents
– Raising the value of small claim civil court actions, for which winning claimants can’t recover their legal costs from losing defendants, from £1000 to £5,000, thereby cutting claimants’ access to legal representation unless they can pay for it from their own pockets
Solicitors have been encouraged to write to their MPs and participate actively in responses to the consultation.
Undeserving or exaggerated claims constitute only a minority of all small injury claims and most are genuine entitlements to compensatory damages for real injuries, albeit not of particularly high value. True, the symptoms of many whiplash injuries are no worse than an inconveniently stiff neck. But many can, and do, become a long-term chronic discomfort or physical weakness. What’s more, minor scarring from a wound to a leg or arm is unlikely to impact many lifestyles, but on a person’s face it can be life-changing.
There is also a much more profound effect on Access to Justice from a radical constriction of minor injury claims.
Once the many painful redundancies and coerced career changes have been worked through, there will be a shift of balance between claimants and defendants. For the former, professional representation or advice will become unobtainable or unaffordable, while the latter will continue to be represented by experienced professionals, courtesy of their insurers.
Once the coherent and authentic systems of justice are taken away, ad hoc or self-help measures will replace them.
Access to Justice will be replaced by Access to Process, which may produce legal results. But there will be no justice at – or in – its heart.
Mike Willis is the managing director of law firm F Mike Willis, of Thormanby, near Thirsk, North Yorkshire