There are fears that the Government’s planned crackdown on whiplash-related personal injury claims will be too bureaucratic, according to Jonathan Willett, director for the Teeside office of Henderson Insurance Brokers.
The Government’s plans include setting up an independent medical expert panel in order to investigate injuries that could be suspect. These injuries have blossomed into a serious problem for the insurance industry, especially under the influence of no win no fee lawyers and claims management companies looking to drum up business, experts say.
Kenneth Clarke, the Justice Secretary, is also rumoured to want to encourage insurers to challenge claims that may be suspect by taking steps to have more cases heard in small claims court. This will reduce larger legal bills since the lower courts have fixed costs, legal experts say, and would work towards the aims of the Government to weed out fraudulent claims that have forced insurers to raise their rates to astronomical levels in order to recover their costs, with some experts estimating that these claims can raise insurance premiums by ten per cent on average.
Mr Willett commented that while the sentiment on the part of the Government to eliminate the number of bogus claims that plague the industry is laudable, he had worries that the system being replaced is just as bureaucratic as some of the proposed alternative measures. It can add costs to the bottom line of an insurer to prepare costs to be heard in small claims court, Mr Willett said, indicating that doing so could be a very time-consuming process.
The director said that it is indeed true that the current civil compensation system is in dire need of reform, but any new framework that is used in it place needs to overcome the issue instead of simply replacing one form of bureaucracy with another.