If claimant lawyers are so keen to end insurers making pre-medical offers, then they should stop requesting them, the Association of British Insurers (ABI) said yesterday.
Speaking at the Claims Magazine Conference in Manchester, senior policy adviser Rob Cummings also suggested that claimant law firms continued to make good money despite reduced fees.
Though expressing scepticism about the value of a medical report on an injury “which has no objective test, which has little chance of coming back with a diagnosis other than for whiplash and which will add over 10% to the cost of the claim”, Mr Cummings said insurers recognised “that we need to play our part in helping to tackle the UK’s whiplash epidemic”.
As such, the industry would consider stopping pre-med offers depending on the rigour of the planned reforms to the medico-legal system, and if the fee for the report incorporated into the Civil Procedure Rules – a position the ABI set out last November.
He continued: “It is also important to note that claimant lawyers can play a role too. It is usually represented claimants, not unrepresented claimants, that pre-med offers are made to and more often than not directly at the request of the claimant lawyer. So if claimant lawyers are so keen to end the practice, it would be helpful if they stopped requesting them.”
Mr Cummings revealed that in a further step to combat fraud, the ABI has agreed, in principle, to share with claimant solicitors data from CUE PI, a central database of personal injury incidents reported to insurance companies, whether or not a claim follows.
“We are now working to define how that can happen in practice and will make announcements in due course,” he said.
Turning to other issues, Mr Cummings noted the “obsession” some on the claimant side have with the profitability of insurance companies. He pointed to Competition Commission research that showed the leading insurers actually an overall made a loss on their motor books in the five years to 2012.
“It is very easy to throw accusations at insurers, who are mainly publicly listed companies and need to comply with listing rules. It would be interesting to see what would happen if claimant law firms were required to be as transparent, whether people might see that even with the reductions in fixed fees, there are plenty of firms doing very nicely.”
He added that the feared impact on access to justice of the Legal Aid, Sentencing and Punishment of Offenders Act (LASPO) had not transpired.
“Although too early to tell its full impact, it appears that there continues to be sufficient capacity in the claimant lawyer market to ensure that access to justice for genuinely injured claimants has not been impeded.
“While a few law firms have ceased operations, others have merged which has led to greater economies of scale in the market. It is more likely that law firm closures are to do with firms failing to adapt sufficiently quickly in the evolving legal market. This is reinforced by the fact that there seems to have been no lack of willing buyers for the PI book of business of those firms that are looking to sell.
“As a result, the negative impact on access to justice that many claimant solicitors predicted has simply not happened.”