Time flies and it is a fortnight today since I was sitting in a crowd at Stamford Bridge. Not a football in sight that day. Instead, stars from the premier league of the litigation world kicking around opinions and ideas at the Modern Claims Conference 2014.
These are harrowing times for many litigation lawyers, particularly in the personal injury world, being shot at from all sides and paid progressively less for the privilege.For many, a large part of the problem is in actually securing work in the face of a ban on referral fees, the slashing of portal and fixed fees in relation to many claims and the bar on recovery now of additional liabilities from the losing party.
Meanwhile, the numbers of ABS grow and insurers happily carry on with whatever they are doing behind closed doors with their claims managers, their panel lawyers and their friends in the world of rehab.
In the midst of it all, up pops the relatively new public face of the Association of British Insurers (ABI) James Dalton with his latest idea.
He put it in terms that it is time for a public debate about whether people should be awarded any compensation for low value, very minor injury claims. The suggestion is that victims of such accidents should be provided with rehabilitation, but no cash. Dalton says that is a “legitimate public policy debate for society to have and for politicians to decide on”. He added that he is not offering the answer to the question, simply suggesting that it should be raised and discussed.
I ran the concept past my teenage son at the weekend. I explained to him that what this means is that if you have an accident and you are injured then insurers will (in theory) organize physiotherapy or whatever is required to sort out your minor injury but there will be no compensation for loss of earnings, pain and suffering, disability etc.
My lad looked genuinely startled and asked me “what – is the man on drugs?”.
Well, no, he isn’t as far as I am aware and I wouldn't begin to suggest it but I agree with the spirit of my son’s spontaneous reaction. It made me think of the words of Elvis Costello:
“Men come screaming, dressed in white coats
Shake you very gently by the throat
One’s named Gus, one’s named Alfie
I don’t want to go to Chelsea”
This is madness. Even relatively minor injuries can result in a month or two off work. The effects of that for a self-employed person or someone whose employer only pays SSP can be devastating, especially on top of all the other expenses and hassle that go with it.
Are we seriously going to contemplate a society and culture where people are not required to compensate others for the damage and loss that their carelessness inflicts?
We are only here because insurers say it is too easy for people to obtain compensation by fraudulent claims. In fact, it is only made simple because insurers find it cheaper to pay up and then use the statistics generated by their own perverse behaviour to try and convince us that virtually all small claims are fraudulent.
In the same way, insurers have historically stirred up the myth of compensation culture by creation of an entire industry that profits from the sale of people’s information without their knowledge or consent, taking at every opportunity payments that many consider contrary to the as yet under used 2010 Bribery Act. See How it works - car insurance
The ABI, through Mr Dalton, tell us that they deal in statistics rather than anecdotes. The problem with statistics .....ok, enough said. The parliamentary Transport Sub-committee made that one clear enough last summer - Hey diddle diddle
The repugnance of anecdotes, so far as insurers are concerned, is that they are real stories and obviously so - Foxes and chickens, Livin’ Aviva loca
What’s more, they demonstrate behaviours of, in corporate and ideological terms, of a fairly small cross section of business which expects to wield enough integrity to put its feet under the table at 10 Downing Street and make its views known.
Is this truly a debate that we should have? Why?
Perhaps it is suggested now because of expectations that a lot of people might be willing to take a short-sighted view of anything like this, as long as they are told it might save them money and they are not injured today.
Added to that, there is a government which has proved itself willing in the past to do insurers’ bidding, and is looking for support in the run up now to the next general election. A government that cares very little for people with ‘low value’ claims.
We can easily foresee what the ABI and HMG will classify as ‘small’, can’t we? Five grand.
For all those people who think that they might save a few quid by putting their hands up for something like this, look back at what has or has not happened even in recent times. Note again the criticisms of the parliamentary sub-committee.
Have regard also to what David Williams of AXA said at the same conference – that premia would be rising again soon because the assumptions on which reductions had been made during the last twelve months had not turned to reality.
Well, the cuts in legal costs became reality and the ban on referral fees – at least for claimant firms doing their business out in the open – also happened so what went wrong with the plan?
It‘s quite simple. It did not produce enough extra profit for the insurers. It never will. The lions share - no, they don't and they won't.
I suggested a few weeks ago that the lunatics were taking over the asylum - Fun boy three From what I heard at Stamford Bridge a fortnight ago, that process is ongoing.