Holding the whip hand

Whiplash: the fight goes on

Posted by Neil Rose, Editor, Litigation Futures

Just when claimant personal injury lawyers thought they were all but out for the count in the battle over whiplash reform, the transport select committee has offered an unexpected hand up from the canvas.

Today’s whiplash report could not have read much better for them; it might also come as a nasty surprise to the insurance industry, which has very much held the, shall we say, whip hand to date.

To me, the report identifies the key issues with admirable clarity and nails what I consider the main problem: the lack of proper evidence to underpin the government’s proposals. As I wrote when the consultation was launched last December, there are no reliable figures that show the extent of the problem. That is as true today.

I suspect many of us would instinctively agree with the general sense that there has been an increase in fraudulent claims thanks to all the activities of claims management companies and some solicitors in recent times (although is that just the propaganda talking?) but I don’t see how the government can turn the system upside down on the basis of a feeling in its collective water.

There may be times when government should act on a moral basis irrespective of the evidence, but this isn’t one of them.

On balance I would personally agree with the committee’s position against raising the small claims limit – I just don’t think the general public is ready to self-represent en masse in PI claims. And the committee highlights the obvious fallacy that using the small claims track will make it easier to challenge fraudulent claims, given that a fraud allegation will lead to the case being transferred to the fast-track anyway.

A more convincing argument is that fraudsters may not fancy the hassle and risk of having to go to the small claims court, but the danger that the majority of honest claimants could be similarly deterred surely outweighs that.

But it is important to stress that the MPs did not express an unequivocal, ‘no, never’ type of opposition to raising the small claims limit and in fact they made recommendations that would make the system work better if such a change happened.

So, what next? Sadly it doesn’t seem like we will see an end to the claim that the UK is the whiplash capital of Europe, even though the committee said the evidence did not prove (or disprove) this. That didn’t stop the Association of British Insurers trotting it out once more in the statement released in response to the committee’s report.

It is as if the ABI has its hands over its ears saying ‘I can’t hear you’ repeatedly because for once somebody who isn’t a claimant lawyer (they don’t count) has dared to contradict it.

More important, of course, is whether the Ministry of Justice is listening. Certainly the voices of MPs will be harder for the government to dismiss than those of claimant lawyers, but the committee notes that some of its previous recommendations in this area have been ignored.

Claimant lawyers can enjoy a rare good day, but one successful battle still leaves them a long way from victory in the whiplash war.