The Law Commission has said that lack of support from the Ministry of Justice was behind its decision not to include the law on fraud by personal injury victims in its latest reform programme.
David Hertzell, Law Commissioner for commercial law and a former managing partner of Davies Arnold Cooper, said the commission believed that law reform in this area was a “worthwhile and suitable” project.
“While agreeing the contents of the 12th programme, we held discussions with the Ministry of Justice in order to ascertain whether there was the required level of support for the project,” Mr Hertzell told Legal Futures.
“At the point at which entry to the programme was finalised, we had not received any indication of that and our understanding was that the government was still considering how the issue should be addressed.
“This would be a controversial project; it elicited strong views even at the early stages of the selection process. While controversy in itself is not a sufficient reason for the commission to reject a project, it is an important factor.
“We consider that it underscores the need for clear governmental support before we should proceed any further with a proposed project.”
The Law Commission said it hoped the Lord Chancellor would approve the 10 projects it had selected for inclusion in the reform programme early next month.
David Johnson, president of the Forum of Insurance Lawyers, said his disappointment at the news from the Law Commission had been “significantly tempered” by the justice secretary’s announcement on measures aimed at tackling insurance fraud this weekend.
Mr Johnson called on exaggerated personal injury claims to be dismissed by the courts “as a matter of course”.
He said that, where claims had been “dishonestly exaggerated”, there had “historically been an absence of any real sanction or penalty”.
However, he said the justice secretary’s clampdown on “fundamentally dishonest” claims would only work if it also covered exaggerated claims, and the courts followed the approach taken in Gosling v Screwfix .
In Gosling, an unreported county court judgment, Judge Moloney held that a claimant who exaggerated his symptoms should be denied the protection of qualified one-way costs-shifting and pay indemnity costs.
Mr Johnson described the proposal to restrict the use of ‘pre-med’ offers in whiplash claims as “understandable and sensible”, provided that it was introduced “as a part of an interlinking set of reforms”.
He said the practice had arisen because of a perception among insurers that medical evidence was “often less than robust” and improvements to whiplash medical evidence “would, in all likelihood, bring about an end to the practice in any event”.
The Association of Personal Injury Lawyers (APIL) said the situation was “anything but clear” on what was meant by fraud and exaggeration.
“If it can be proved to a criminal standard that an entire claim is fraudulent, there is no doubt that it should be thrown out,” a spokeswoman said.
“But what is considered exaggeration by an insurer can, to a claimant, be a very valid argument which the claimant has simply been unable to prove at a particular stage of the case.
“The law is rarely black and white, which is why the courts already have the power to use discretion to deal with alleged exaggeration.”
The spokeswoman said that introducing a power of “blanket dismissal” would lead to an increase in spurious allegations of fraud and exaggeration, an increase in satellite litigation and an increase in genuine claimants “who either underplay their symptoms or who fail to bring valid cases at all”.
She added that the government’s plan to restrict settling whiplash claims without confirmation of injury did not go far enough and an outright ban was needed.