The Ministry of Justice will reduce the rights of genuine claimants further if they repeat the mistakes of recent flawed reforms, a leading UK injury lawyers group has warned.
Simon Stanfield, Partner at Simpson Millar Solicitors and Chairman of the Motor Accident Solicitors Society, told the body’s annual conference yesterday, the MOJ must not allow “one sided debate” and “misguided objectives” to influence the pending Civil Liability Bill. He declared that its predecessor, The Legal Aid, Sentencing and Punishment of Offenders Act (LASPO) had caused significant detriment to ordinary claimants.
He said: “I fear that the MoJ has not learnt from the errors of LASPO and indeed the launch of MedCo. Driven by one side in the debate, Part 2 of LASPO was misguided in its objectives, flawed in its rationale and poorly executed.
“The absence of the costs of success fees and ATE have benefited insurers at the expense of accident victims, from whose damages they are deducted.”
Stanfield who is also Head of Road Traffic Accidents at Simpson Millar, condemned what he called a ‘dramatic rise in premiums’. He accepted that rising insurance premium tax was playing its part but reminded insurers that prices have increased in spite of their receiving every reform under LASPO the industry had ever wanted: “One thing is clear; it cannot be blamed on increased legal costs. After a brief drop, insurance premiums are right back to pre-LASPO levels and accident victims rarely benefit from the 10% uplift in damages,” he said, adding: “Third party capture remains unregulated and is still a significant problem. The related ‘fundamental dishonesty’ change has led to many genuine claimants coming under unfair pressure to cease a legitimate claim ahead of going to court.
“Five years on and it looks as if the mistakes of the past are about to be repeated in the form of the Civil Liability Bill. Although the next few months and years will undoubtedly be testing for the sector, MASS will continue to actively campaign against the Government’s whiplash proposals in Parliament and elsewhere.”
Simon added that MASS’ efforts with the insurance industry to help tackle fraud had produced some excellent results. “Clearly a great deal has happened in the claims sector, and the wider political landscape, since the Insurance Fraud Taskforce published its twenty-six recommendations back in January 2016. Some good progress has been made on many of the sensible recommendations from the IFT,” he said.
However, problems continued to exist. “Action on claims management companies has been painfully slow. The transfer of CMC regulation to the FCA and the prospect of tougher regulatory action against CMCs, is meeting resistance. We have yet to see the promised consultation on Part 2 of the changes, when abuse in medical reporting and rehabilitation costs need tackling. The government continues to struggle with credit hire and with the technology in cars getting ever more sophisticated, there remain unanswered questions around credit repair and total loss claims.”
Stanfield said the industry needs “strengthened powers for the SRA”, to enable them to respond robustly to the “fringe elements in the legal sector who facilitate fraudulent behaviour.
“The sector has changed since the landscape was surveyed by the IFT back in 2015. The number of whiplash claims has continued to fall. The number of CMCs and the revenue they make from encouraging personal injury claims has fallen.
“Fraudulent behaviour – which never was at a level suggested by the newspaper headlines – appears to be on the wane, with many cash-for-crash gangs busted by the combined efforts of the various intelligence and investigative bodies.
“All of this begs the question, what are the current proposed changes to the claims environment really for?”