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Tue, 31 March 2020

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Government whiplash plans will 'feed fat cats' while reducing access to justice

Government whiplash plans will 'feed fat cats' while reducing access to justice

Tom Jones, Head of Policy | Thompsons Solicitors

2 min read Member content

The Government's proposed reforms on whiplash legal claims are set to starve citizens of justice and further line the pockets of the already "eye-wateringly lucrative" insurance industry, says Thompsons Solicitors' Head of Policy Tom Jones.


The Government apparently thinks it is acceptable to cost the NHS £13m a year and lose £135m coming into the Treasury at the same time as gifting at least £200m per annum to UK insurance companies whose chief executives are already on multi-million pound remuneration packages.
 
The Ministry of Justice has proposed reforms that are supposedly about addressing a ‘whiplash pandemic’ fuelled by ‘fraud’ and ‘compensation culture’.  In fact the changes will restrict access to justice for all injury victims, including those injured at work, and ignore some fundamental facts.

First, the Government has chosen to ignore Compensation Recovery Unit data which shows a significant decline in motor and workplace injury claims over the last five years.

Also ignored is Association of British Insurers data showing five consecutive years of falling claims costs, down 30% since 2010, which saved insurers over £7.83bn. And the fact insurers pocketed £4 out of every £5 of that windfall.

The MoJ skates over the fact that car insurers pay out in 99% of cases, which suggests that despite the alleged concerns about ‘fraud’, insurers aren’t actually challenging it – they simply pay out.

The salaries, benefits, bonuses and dividends of three insurance CEOs ranged from £4.82m to £11.55m in 2015. Consistent with a market in crisis? Or an eye-wateringly lucrative industry set only to gain further if the suggested changes are brought in?

This is a ‘big call’. You would have thought that a government who did not want to appear driven by the interests of the privileged, powerful few wouldn’t press ahead with policies that will:

- hinder access to justice for nearly a million people injured through no fault of their own each year;
- cost the NHS £13m and taxpayers £135m pa; while
- handing over £200m pa in additional profits to insurance companies, and their shareholders.

This isn’t about whiplash, fraud, or especially justice. This is about government feeding fat cats.

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