Earlier this month, the government revealed that it is to ban lawyers from “encouraging” the public to make compensation claims by promoting initial incentives, like cash or iPads. Lord Young proposed as much in the 2010 report Common Sense Common Safety, which was backed by the Prime Minister. Enticements to claim, it is argued, contaminate the entire claims system. Indeed, incentives to make a claim have added such expressions as “ambulance chaser”, “compensation culture”, and “cash for crash” to the vocabulary of regular life in the UK.
This has come about after the Ministry of Justice [MoJ] consultation which encompassed common ground, suggesting the raise of the small claims limit in the County Court, from £1000-£5000, for whiplash claims. The current proposals are a renewed trend of reform in the personal injury sector, directed at insurance fraud that will also call for courts to toss out any claims for compensation “in full” where the claimant has been “fundamentally dishonest”. The Ministry of Justice (MoJ) added to the whiplash reforms a ban on lawyers giving pre-medical promotions or enticements, and the launch of new impartial medical panels.
The MoJ has said that its’ actions to date had made a “major contribution” to decreasing motor insurance premiums over the recent year, although at the same time, recent figures from the Association of British Insurers quote that the number of false motor claims actually shot up by 34% to a record 59,900 (with a total value of £811m) in 2013. The insurance industry have pledged to transmit any savings these reforms generate “straight to customers”, but don’t expect this any time soon. A number of insurers are suggesting that yet more reforms are required before they can lower their premiums further, which is not all that surprising.
The Solicitors Regulation Authority (SRA) has surprisingly resisted a ban on enticements, irrespective of the calls from substantial numbers of injury claims solicitors. Having said that, the objective is to ban all forms of enticements for issuing a claim, a spokeswoman from the MoJ claimed. Enticements can take the form of welcome payments, cash advances, discounted services or free gifts. The proposal for a court to toss out any compensation applications where the claimant has basically been dishonest will apply unless it would bring about significant injustice to do so. The MoJ spokeswoman stated that whether a claimant has been essentially dishonest will be a question for the courts to ascertain, based on all the conditions of the individual case.
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