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12th January 2012
It's good to see debate about referral fees in personal injury claims which result from road accidents, although I do take issue with The Transport Select Committee’s latest findings.
The Committee, it’s reported, has today said that the cost of car insurance could probably be cut if the government restricted the huge number of subjective whiplash injury claims and if claimants had to provide more proof that they have suffered a whiplash injury.
There’s no doubt that insurers make vast amounts of money from selling customer data and in referral fees, so the industry must accept that they are complicit in creating the current unsatisfactory situation. I am all in favour of a restriction on referral fees and tighter regulation on unsolicited and speculative advertisements. There is a world of difference between that approach and ours which is about raising awareness and giving people the choice about pursuing their rights.
However, I don’t hold The Transport Select Committee’s view that insurance premium costs could be cut if claim numbers for whiplash injuries were reduced.
I am sceptical that if measures were brought to reduce the number of whiplash claims that there would be any decrease in insurance premium levels. There is no evidence that the costs of buying claims and data is then passed on by insurance companies to the consumer. Nor is there any valid evidence that premium costs have been driven up by claim numbers. Equally, however, it’s worth pointing out that insurers campaigned for fixed legal costs to reduce their outlay yet insurance premiums have increased by something like 20% since fixed costs were brought in. Insures must be saving money, they just don’t pass those savings onto their customers.
We also need to be careful not to bias the system unfairly against people who have legitimate claims for whiplash injury. The problem often with whiplash claims is that the diagnosis of injury is based on an assessment of symptoms by a doctor or consultant which, while informed, expert and professional, to some extent must always be subjective. To require further evidence in all instances may be overly stringent, may not be reasonable or achievable and could strike out a fair proportion of legitimate claims. That equally cannot be right.
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