Claims go down but the price goes up!

I recently raised the issue about who is really making money from compensation claims –

http://thestevecornforthblog.blogspot.co.uk/2012/10/motor-claims-whos-making-and-whos-paying.html

This is against the background of concerted attacks on victims, and their lawyers, who are blamed for creating a compensation culture.  It is worth repeating here that the so called ‘compensation culture’ is widely accepted to be a myth. The myth is put out by the insurance industry and repeated by the media and politicians.

There is no evidence to support the existence of such a culture. Indeed according to recent research by the Association of Personal Injury Lawyers, there has been a significant drop in the number of whiplash claims –

http://www.newlawjournal.co.uk/nlj/content/whiplash-claims-fall
I
t is clear that significant number of victims do not actually claim at all. Many of those who do claim are encouraged to do so by insurance companies who have made huge profits from referral fees by to them for claims that they generate. It is notable that the reduction in claims has not led to a reduction in premiums.

Direct Line is a major player in this field and owns the well known Churchill brand. They have recently announced an intention to move in the provision of legal services and openly admit to having received over £100m in referral fees over the last three years –

http://www.legalfutures.co.uk/latest-news/direct-line-set-abs-reveals-110m-referral-fee-income-since-2009

That is a staggering sum by anyone’s standards, and still the finger is pointed at victims.

It is good news that the industry has been referred to the OFT because of their practices.

It is true that there a tiny minority of false or exaggerated claims. But the vast majority of victims suffer genuine and significant injuries and are vilified in the media for pursuing fair compensation. Nobody can deny the need for reform here.

But that needs to be focussed on where it is needed – and it is not the genuine victims who are at fault.

http://www.eadsolicitors.co.uk/personal-services/road-traffic-accidents/