The fight against compensation culture goes ever on

Industry news roundup: week ended 9 June 2014:

A new salvo has been fired by regulators against personal injury lawyers in an effort to combat so-called compensation culture, but will it really do anything?

If there’s one thing that gets the knickers of policymakers and insurance companies in a twist, it’s the idea that there’s some sort of compensation culture alive and well in the UK – as if personal injury solicitors are enticing injured Brits to make spurious accident claims in order to line their own pockets. Now, I’m not going to say that there aren’t those particularly vile ambulance chasers out there, but for the most part there’s very little activity like that going on. Nevertheless there’s a new spate of regulations going forward soon to limit this alleged activity.

The newest target of the anti-compensation culture crusade is the elimination of incentives to bring personal injury claims. In other words, Justice Secretary Chris Grayling recently went on record saying he’s going to stamp out legal firms from offering things like cash up front, shopping vouchers, or even high end electronics such as laptops or iPads as an incentive to bring a personal injury compensation claim. Mr Grayling has high hopes this will stamp out insurance fraud as a result.

Now I won’t lie – there are some firms that engage in this behaviour. Is it right? Absolutely not. Are the number of firms that do this materially contributing to fraud figures? If you ask me, not a bloody chance. In fact, there’s statistical data to back me up as well – the Association of Personal Injury Lawyers released data recently that found that over the course of an entire year the amount of claimants bring fraudulent claims was minuscule.

When it comes to the big bad guy of fraud – whiplash claims – the figures were particularly damning. Fraud figures for whiplash claims are laughably low – something like seven per cent according to Apil. Honestly this just gives the lie to the idea that fraud – particularly whiplash fraud – is so out of control that it’s beggaring the insurance industry. I don’t know what insurers are trying to pull by crying wolf like this, but if you ask me it’s probably a half-arsed attempt to justify their constantly climbing insurance premiums by blaming this myth of a compensation culture. Rather dastardly if you ask me!

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