On 20.03.2018 the MoJ unveiled sweeping PI reform in an expanded Civil Liability Bill, including fixed amounts (tariffs) for compensating whiplash claims, and a ban on seeking or offering to settle whiplash claims without medical evidence.

The Lord Chancellor, David Gauke, stated that the government were putting forward the legislation to ensure “whiplash claims are no longer an easy payday and that money can be put back in the pockets of millions of law-abiding motorists’, pledging that motorists will save an average of £35 from their car insurance premiums as the ‘unacceptably high’ number of whiplash claims is reduced.

A comparison of the tariffs previously mooted, and the levels of compensation you may secure at present for a whiplash claim are:

As can be seen there is a huge reduction, for a debilitating and painful condition (especially when you consider that you are now entitled to claim £500 and more for a missed flight!)

An unusual amount of government energy has been devoted to dealing with the apparently ubiquitous “problem” of “compensation culture”, the existence of which now appears to have been universally accepted as an undeniable fact by the media, and the Lord Chancellor, despite there being no evidence in support of it whatsoever.

It is interesting to note that, for example, Lord Young in 2010 when commissioned by David Cameron to expose the “compensation culture” wrote in his report Common Sense, Common Safety that “The problem of the compensation culture prevalent in society today is, however, one of perception rather than reality.”

In 2013 Lord Dyson, then Master of the Rolls, in his Holdsworth Club Lecture entitled”Compensation Culture: Fact or Fiction?” said that “this may also require a substantive educative effort on the part of government, the courts and the legal profession to counter-act the media-created perception that we are in the grips of a compensation culture.”

Despite a fall in claims levels since both of these observations, the Lord Chancellor David Gauke cites compensation culture again as justification for the government’s proposed measures.

Clearly it is the insurance companies who stand to benefit most from the government’s “war” on road traffic accident claims, and it is perhaps not that surprising that the government  first raised issue with “compensation culture” after an insurance summit in 2012. A list of the attendees comprised a who’s who of insurance bigwigs:

Attendees at the Downing Street Insurance Summit 14.02.2012:

The Rt Hon David Cameron MP, Prime Minister

The Rt Hon Oliver Letwin, Minister of State, Cabinet office

The Rt Hon Justine Greening, Secretary of State for Transport

Nick Herbert, Minister of State for Justice

Otto Thoresen, Director General, ABI

David Stevens, COO, Admiral

John Cridland, Director General, CBI

David Neave, Director of General Insurance, Co-operative Insurance

Judith Hackitt, Chair, Health and Safety Executive

Paul Geddes, Chief Executive, RBS Insurance

Ann Robinson, Uswitch

Stephen Lewis, CEO, Zurich UK

The fact that the government is and always was in league with the insurance companies is made very clear by the fact that no representatives of claimant organisations were asked to attend, and all out war was declared on the mythical “compensation culture” by the Prime Minister thereafter.

Unfortunately, it serves the government (the Conservative party has had a long-standing financial relationship with insurance companies) to support the insurance companies’ claims that it is a rise in road traffic accident claims that has accounted for the rise in premiums, despite the fact that the figures show there has actually been a huge drop in the costs involved with such claims (the vast majority of which are actually fair and equitable, and the details for which were often sold on by insurance companies in the first place). The phantom of “compensation culture” has provided an expedient political scapegoat for the government to loudly whip.

However, the public are being sold a lie. Not only is there no “compensation culture” which requires a remedy, it is highly unlikely that premiums will go down. Although the insurers have signed a letter “promising” to pass on any savings, the truth is they have made millions of pounds of savings over the past few years due to previous reforms, and yet premiums have continued to rise. Therefore while the loss of victims’ rights seems certain, consumers gaining any savings from these reforms looks very unlikely. What is for sure is that insurance companies’ profits will continue to rise stratospherically, and the cosy relationship with the Conservative party will continue.

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