Number of Personal Injury Claims Continues to Fall

The number of personal injury claims being made has continued its downward trend, further undermining the claim that the UK is in the grip of a 'compensation culture'.

Data from the Compensation Recovery Unit (the CRU) is regarded as the most reliable on the actual numbers of claims being made. Whenever a personal injury claim is made, the defending insurer has to register the case with the CRU, which is part of the Department for Work and Pensions.

The CRU's data, published this week, shows that the total number of claims being made for personal injuries fell nearly 4% last year, and is down 26% from its peak in 2013.

The continuing fall comes against a background of repeated efforts by the government, urged on by the insurance companies who pay out claims, to make harder for accident victims to pursue claims for compensation. Significant moves to reduce the number and cost of compensation for insurers were made in 2010 and 2013, and further restrictions were due this year, although they have now been put back to 2021.

The Ministry of Justice has said it remains "firmly committed" to implementing measures to tackle the high number and cost of whiplash claims, including plans to relieve insurers of the need to pay for claimant's solicitors' costs in most cases (leaving the injured party to foot the bill) and to introduce fixed, lower damages for whiplash.

Doesn't the decline in claims since 2013 show this approach is working?

Well, yes and no, and the yes isn't for particularly attractive reasons. Insurance companies are big organisations, spending a lot of money. They can afford to lobby politicians and run effective PR campaigns to make sure their take on issues like injury claims is fully aired in the media. Typically they promote stories about dodgy claims and dodgy lawyers, with "no win, no fee" arrangements meaning people feel free to claim for anything and everything - a compensation culture.

But looking at the CRU figures, since conditional fee agreements (no win, no fee agreements with solicitors) started to become widely adopted from 2000, claims for road traffic accidents have certainly gone up, only to drift down again since their peak. However, non-RTAs such as accidents at work and public liability claims (things like trips and slips and claims against the owners of premises) have remained pretty steady, and have even declined a little.

If it was all the fault of dodgy claimants making up dodgy claims, or disreputable lawyers encouraging them, why wouldn't claims be up across the board? In fact, solicitors' fees for other types of claim tend to be higher than for road accidents, so why haven't solicitors been able to increase the number of those more profitable claims?

The answer is that the growth in RTA claims wasn't driven by any sort of compensation culture, it was driven by information harvesting, and driven in the main by the insurers themselves. If someone has an accident at work, they generally report it to their employer who reports it to their insurer, who has no interest in encouraging the employee to make a claim. On the other hand, after a road accident, the drivers will often report the crash to their own insurer, who might well have a cosy relationship with a solicitor's firm based miles away which takes on claims in bulk from the insurer, and doesn't mind at all if a competitor insurance company is sued. If you haven't ticked the 'don't contact me' box when you took out the insurance, you might find you suddenly start getting a lot of calls asking if you have considered making a claim.

There has been a decline in the number of road accident claims being made. However, this is simply because the government's reforms over the years have made it less and less attractive for solicitors to take on perfectly good cases, and for clients to bother when their compensation is being knocked down, bit by bit. Accident claims are discouraged by taking money away from accident victims.

#compensation #lawreform #law #cru #insurance