piBlawg

the personal injury and clinical negligence blog

A collaboration between Rebmark Legal Solutions and 1 Chancery Lane

Government Whiplash Reforms - On Hold?

The Law Society Gazette is reporting that the Justice Secretary is not intending to proceed with the personal injury reforms set out in last year’s Autumn Statement “at the moment”. We blogged on those proposals at the time here which, as a reminder, were that the small claims track limit should be raised to £5,000 and the removal of the right to general damages for minor soft tissue injuries. Apparently the MOJ has stressed that it is still committed to tackling the high cost of whiplash claims. The Gazette reports that fresh proposals are in the works and could be introduced by the end of the year. It seems the original proposals came very much from the Treasury rather than the MOJ so it will be interesting to see what the MOJ’s solution is. Hopefully they will find a formula which will satisfy everyone by effectively tackling fraud while maintaining access to justice. As ever, watch this space for updates.

BBC Expose of 'Crash for Cash' Ring

For some light relief (this is being posted on a Friday afternoon after all!) any practitioner involved in PI cases where fraud is alleged could be advised as to look no further than the detailed article published on the BBC Wales’ website about a successful prosecution of a so-called ‘crash for cash’ ring, in this case an extended family. This would appear to be something of an extreme case, the publicisation of which will no doubt be pleasing to insurance companies seeking to highlight what they suggest is the prevalence of such behaviour, albeit on a less industrial scale.   The modus operandi of the Yandell family from south Wales was to submit claims for entirely fraudulent road traffic accidents replete with bogus repair invoices, hire car charge invoices and other bogus evidence as well as various friends and relatives roped in as phantom passengers. Police suspected they made in excess of £2 million over the years.   A particularly (though soberly unsurprising for anyone concerned with such claims, such as the author) runs:   “ ‘Originally they'd tried a couple of collisions to get a bit of extra cash,’ said DC Jon Parkinson. ‘They realised there was a lot of money to be made.’   The Yandells also realised that insurance companies would soon become suspicious if the same names kept cropping up on claims.To get around this, they began roping in friends and other family members. The more names and addresses involved, the less risk there was of insurance company fraud investigators smelling a rat.   It worked something like this: 1) The Yandells and their associates would invent car accidents in which one party would pose as the non-fault driver 2) The at-fault vehicle would either have high mileage or be mechanically problematic. No loss as it was worth more as a write-off and money could be made by removing parts, headlamps, gearboxes 3) The non-fault party then submits an insurance claim for damage to their car, personal injury, courtesy car, crash repairs and so on 4) The Yandells would submit fraudulent courtesy car and repair invoices to insurers 5) Other family members and friends or friends-of-friends would then be roped into the deal. They agreed to lie and say they were in the car at the time 6) A flurry of cheques follow ranging from £10,000 to £40,000 per accident - new cars, personal injury payouts, courtesy car charges and bogus repair bills   But the accident had never happened. So, before any inspectors arrived from insurance companies, the Yandells had to make sure the cars looked suitably smashed up.   The gang would damage cars with hammers, or drive cars into one another ... ”   The extensive article includes photographs and excerpts from BBC Wales' Week In Week Out current affairs programme, including footage of cars being deliberately damaged to bolster claims – to repeat, it’s really worth a read/watch!   The good news is that the report states that the Yandells have been stopped. Prosecutions were buoyed by the availability of CCTV footage as well as intelligence gleaned from social media. The BBC suggested that in total over the past five years some 83 people have been found guilty in the criminal courts for this fraud, specifically: 81 on conspiracy to defraud and two for theft. It is said that they received sentences ranging from six years in jail to suspended prison terms. Next week the final five people involved are due to be sentenced.   The article is available at http://www.bbc.co.uk/news/uk-wales-35357195.  

Autumn Statement for PI Lawyers

The government has released a summary of the Autumn Statement with 20 Key Announcements, the last of which will be of great interest to personal injury lawyers. It reads as follows: “20. People will no longer be able to get cash compensation for minor whiplash claims To make it harder for people to claim compensation for exaggerated or fraudulent whiplash claims, the government is ending the right to cash compensation. More injuries will also be able to go to the small claims court as the upper limit for these claims will be increased from £1,000 to £5,000. This means that annual insurance costs for drivers could fall by between £40 to £50 a year.” George Osbourne anticipates these changes “will remove over £1bn from the cost of providing motor insurance” and expects insurers to pass on that saving to consumers. There had already been speculation over the last week that the government was going to introduce its previously shelved plan to increase the small claims limit for personal injury claims when the insurance fraud taskforce reported next month. What is surprising though is the reference to “ending the right to cash compensation”. It is as yet unclear what it meant by this. Footnote 55 to the Autumn Statement gives some clarification by explaining that “Claimants will still be entitled to claim for ‘special damages’ (including treatment for any injury if required and any loss of earnings) but entitlements for general damages will be removed.” It will be interesting to see though how it will be decided that a case falls into the category in which there is no entitlement to general damages. Elsewhere in the Autumn Statement is a statement that the government will reduce the excessive costs to insurers of whiplash claims by “removing the right to general damages for minor soft tissue injuries”. This would seem to cover more than just whiplash injuries. There may also be interesting arguments where multiple injuries are involved. These problems are unlikely to be straightforward and may result in substantial argument, inevitably using court time. It seems likely we will have to wait for the report of the insurance fraud taskforce, due before the end of the year, for further details.  Keen readers who can’t wait until then might be interested in the research briefing published in advance of last Wednesday’s debate in Parliament. Otherwise, watch this space!

Personal Injury practices safe 'at this stage'

“Will they or won’t they?” has been the question for many personal injury lawyers wondering whether their practices were about to disappear into oblivion with the raising of the small claims limit. The question has now been answered: “not at this stage”. The government clearly thinks that it would be good to raise it. However it does not intend to do so ‘at this stage’ because it might have an adverse effect on victims of RTAs with genuine injuries. It wants to develop safeguards before an increase in the limit is considered. The government has also responded to the consultation on its proposal to set up panels of independent medical experts. It intends to go ahead with this with the intention of having experts who give better advice on whiplash injuries. The view is that only reports from accredited medical experts would be accepted in evidence in whiplash claims. Reports will be in a standardised format and the government intends to stop experts being paid by those who favour a certain outcome. Further work is to be done before a proposal is published. You may or may not have been aware that the transport select committee had recommended reducing the limitation period for road traffic cases involving personal injury from three years. The government has made it clear it does not intend to do so. Such a move would make the law of limitation more complicated and would cause a massive surge in litigation – at a point when the court system is struggling in any event. The government has also suggested measures to challenge fraudulent or exaggerated claims. These include better data collection in order to establish the extent of the problem, prohibiting settlement without a medical report and the sharing of data by insurance companies with claimant solicitors to help claimant lawyers carry out ‘know your client checks’. Whether this will really make any difference is open to doubt – one school of thought is that vehicle technology (dashboard cameras, speed recording devices etc) will only really make a difference.

Backlash to whiplash? Consultation on Whiplash Claims

The MOJ yesterday opened consultation on proposals aimed at reducing the number and cost of whiplash claims. In terms of the number of claims, the MOJ has cited research indicating that 70% of road traffic accident personal injury claims in the UK were related to whiplash, whereas the equivalent figures were 47% in Germany, 32% in Spain and 3% in France (http://www.justice.gov.uk/news/press-releases/moj/government-action-on-whiplash-claims).   Moreover, in terms of costs, the MOJ has noted research suggesting that Britain is the only country in Europe which has paid out as much in costs as it has in compensation for neck injuries in car accidents. One should query, however, whether this finding alone is indicative of a problem – is it not just as likely that higher costs were incurred because we have an adversarial, rather than an inquisitorial system? The proposals the Government is consulting on are: •Creating new independent medical panels to diagnose whiplash injuries. •Increasing the small claims threshold for personal injury road traffic accident claims to £5,000, thereby reducing costs.   The consultation is now open until 8 March 2013 and can be found at https://consult.justice.gov.uk/digital-communications/reducing-number-cost-whiplash