Number of motor claims stays low over last three months

Maxwell Scott: Is now the time for radical change?

The collapse in new motor injury claims seen during lockdown continued in the following three months, despite more cars returning to the road.

The latest figures from the Compensation Recovery Unit (CRU) recorded a 38% fall in new claims registered between July and September 2020.

Although in numerical terms there was a 10.5% increase in the number of claims compared to April to June (105,000 against 95,000), the percentage fall year on year was the same. In July to September 2019, 169,000 new claims were registered.

The figures were obtained by the Association of Consumer Support Organisations, whose executive director, Matthew Maxwell Scott, said: “The reduction in compensation for injury and vehicle repair costs is good news for insurers and we hope this will be reflected in reduced premiums for Britain’s motorists in the year ahead.”

Mr Maxwell Scott noted that claims incidence for employer’s liability (EL), public liability (PL) and clinical negligence was broadly flat on the previous quarter, but again well down compared to the same period last year.

“There has been very little increase in EL and PL claims since the lockdown, which may be because many people are still working from home.”

He suggested that, while it was early days, “this could be the start of a very different claims environment for the UK, which is seeing a long-term contraction in injury claims from a peak of 1,048,000 annual claims in 2012/13 to 829,000 claims in 2019/20, a 21% reduction.”

Though there are growing doubts in the market about whether the much-delayed whiplash reforms will actually go live in April 2021 as planned, the government at the moment remains committed to that date.

Mr Maxwell Scott said: “It’s reasonable to ask whether it is the right time to be delivering radical change when the claims market and general environment is so volatile and the new small claims portal still faces many operational challenges.”

Lord Keen, who resigned last month over the Internal Markets Bill, previously had responsibility for civil justice reform and he has yet to be replaced as the Ministry of Justice’s spokesman in the House of Lords, while the portfolio has not been reallocated either.

Mr Maxwell Scott said: “The new minster will have some rapid decisions to make when they arrive at their desk, because there are still no rules and many fundamental safeguards remain unresolved.

“Moreover, the current backlog of cases in the civil justice system will only increase with an upsurge in litigants in person through the new regime.”

Figures last month from the Association of British Insurers showed that while the number of motor insurance claims notified to insurers in the second quarter of 2020 fell by nearly half, their value leapt by 31%.

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