​The Civil Liability Bill Penalises the Innocent and Rewards the Insurers.

The Justice Committee this morning published the ‘Small claims limit for personal injury’ Report which makes very clear criticism of the Government’s Civil Liability Bill currently making its way through the House of Lords.

The Report makes strident criticism of the Bill and concludes that:
•    The Government should not proceed with it’s plans to increase small claims limit to £5000 for road traffic accidents and £2000 for employer’s liability and public liability claims.
•    Small claims limits should only rise in line with inflation since 1999 to £1500. The Government have not set out a compelling case for a further increase and the Committee is extremely concerned this could impede access to justice.
•    Proposed online claim systems should not be extended to employer’s liability and public liability cases due to their complex nature.

The Civil Liability Bill which, on the face of it seeks to tackle the issue of an increase in the number of whiplash claims in the UK, will actually take away the right to free legal advice from hundreds of thousands of people injured at work or on the roads every year whose claims have nothing to do with whiplash.

Currently, anyone in England and Wales who are injured in a workplace accident or on the road and whose injuries are worth more than £1,000 can claim back the cost of getting legal help to advise them on a possible claim. The rationale for injured people having their legal help funded by the guilty party is that the relationship between the injured and the defendant is ‘asymmetrical’; it isn’t one of equals. On the one hand, you have an injured person who has (hopefully for them) never made a claim before and on the other a well-funded insurer who knows the ropes.

The hidden agenda behind the Bill is for the Government to use powers that aren’t on the face of the Bill to increase the small claims limit by 400% from £1,000 to £5,000 for all road traffic accident cases and by 100% from £1,000 to £2,000 for all other cases, including accidents at work. Those powers lie completely outside of Parliament’s usual procedures for scrutinising changes to statutory rules and regulations.

£2,000 is a lot of money for most workers, let alone £5,000, yet the Government think it’s OK to leave people injured through no fault of their own to fight well-funded insurers by themselves. The Justice Committees Report begs to differ.

It is revealing that in Scotland the decision was made in 2014 to exclude personal injury claims from their equivalent of the small claims track altogether precisely because of concerns about inequality of arms between the parties. Noticeably Lord Keen of Elie QC Advocate General for Scotland who is steering the Bill through the Lords for the Government failed to answer direct questions on the Scottish exception that came from, amongst others, Baroness Berridge on his own backbench.

It is estimated that up to a million people every year would be left on their own and trade union legal services, which provide an important route to redressing wrongs for injured members, will be undermined if the Bill goes ahead. From the person injured at work who could have lost several months’ pay to cyclists, pedestrians and even children, the injured will be left to fight a legal battle they don’t understand, and financially cannot afford, against those who do and can.

The government is claiming the Bill will reduce ‘fraudulent’ claims. However, there is no independent evidence of a problem of fraud from people injured on the roads – in fact, the only statistics on fraud come from the insurers themselves. If there really was a problem with fraud why do insurers concede that they paid out in 99% of all road traffic claims last year? I simply don’t buy the weak line proffered by insurers (and parroted by the Government in the Bill’s Impact Assessment) that they must pay out because it would be un-economic to fight fraudulent claims.

The way society deals with those who break the law (in this case alleged fraud) is to prosecute and punish. This Bill doesn’t stop fraud, it allows potential fraudsters to continue whilst taking away free legal advice and introducing lower compensation for those who are law abiding.

Additionally, what have people injured at work who will be hugely affected by this got to do with fraud? The answer is nothing, as neither the Government nor the insurance industry suggests there is any problem with fraud by people injured at work.

The Government isn’t making a lot of noise about the admission in the Bill’s impact assessment that the changes will take £6m every year from the NHS and £140m every year from the taxpayer, while generously providing an extra £1.3 billion profit every year to the insurers.

The ‘sweetener’ the government is keen to talk about is premium savings for motorists. The ‘savings’ have fluctuated, first they were £50, then they were ‘about £40’ and in the latest Queen’s Speech they were ‘about £35’.

Interestingly we have been here before – insurers made promises to reduce premiums in 2012 when the Government delivered on changes the insurers lobbied for - and since then (on the Association British Insurers’ own figures) claims costs have fallen by 42%, the insurers have saved over £11 billion yet motor insurance premiums are higher now than ever (along with record profits and CEO salaries).

Insurers cannot be trusted to pass on savings to motorists. They have broken previous similar promises and the Government has gone on record in connection with this Bill to say that they won’t force insurers to do so.
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The Justice Committee Report expresses deep misgivings about where the Government is going with this Bill. To me this appears to be a stitch-up between the insurers and Government, ramping up fears of a “compensation culture” in whiplash injuries to distract people from the Government’s true intentions: to attack access to justice for all injured people, including workers and to pass billions onto the insurance industry.