ABI: "PI lawyers’ gravy train of excessive fees heading towards the buffers"

Dalton: inconceivable that every whiplash claim is genuine


There is growing recognition “that the claimant’s interest and the interests of the claimant’s lawyer are not the same thing”, the Association of British Insurers (ABI) has said.

Writing on the ABI website in the wake of giving evidence to the transport select committee investigation into whiplash reform, head of motor and liability James Dalton said that “naturally there has been a howl of protest from the personal injury lawyers who can see that the gravy train of excessive fees may soon hit the buffers”.

He dismissed the argument that raising the small claims limit for personal injury to £5,000 would undermine access to justice and that lawyers are needed to represent the interests of the claimant.

He said: “Yes, work will be need to be done to make sure claimants understand their rights in a new system and how they can file a claim. And yes, consumers will need to be able to put a value on the injury they have suffered, which is why we have argued in favour of a transparent, independently controlled and regulated, software-based system to assess general damages awards. But, given time and willing, that shouldn’t be too difficult to deliver.”

“People are starting to recognise that the claimant’s interest and the interests of the claimant’s lawyer are not the same thing. And more fundamentally, there are questions being asked about the role of personal injury lawyers and when legal advice is most useful to a claimant, in an environment where the policy settings and legal framework strike the right balance, there are no disputes about liability and claimants understand their rights.”

Mr Dalton said it was “easy” to make the case for reform of the compensation system – it is “simply inconceivable” that the 500,000-plus whiplash claims made every year are genuine.

“Insurers cannot prove someone does not have whiplash any more than a claimant can prove that they do. So whiplash has become the UK’s fraud of choice for the opportunistic few ready to exploit our compensation culture.”

He said the select committee understood that “high compensation awards added to the high cost of getting that compensation to claimants equals high car insurance premiums. Insurers don’t create the society in which we live. They price the risks that society presents.

“So it is time we had an open and honest public debate about whether a minor, low-speed shunt in a supermarket car park resulting in a sore neck for a couple of days justifies thousands of pounds in compensation. But it needs to be a grown-up debate: with analysis rather than anecdotes and evidence rather than emotion. Whatever the outcome, insurers will provide the agreed level of compensation to claimants and build that into car insurance premiums.”