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Are Personal Injury claims a force for good?

Consideration was given for the editing and publication of this post.

In posing this question, we do so aware that the public perception of the area of law that is personal injury compensation is very much shaped by the views that the National Press has on the subject. To say that the majority of the mainstream press isn’t favourable towards personal injury claims, personal injury claimants  and personal injury lawyers, would be a very large understatement. 

The Insurance Industry’s PR machine has, for years, been very effective in producing compelling soundbites, such as “compensation culture”, “crash for cash scams”, ‘whiplash capital of the world” (the UK apparently has that title) to go with the existing American-bred insult that’s levelled at injury lawyers of, “ambulance chasers.” 

As a result of this effective PR spin, friendly news editors have been only too pleased to fire the insurance industry’s bullets. Headlines such as,

"Ridiculous compensation culture pay-outs burden tourist attractions" (Daily Mail) and, “Crackdown on whiplash epidemic could save £40 a year” (Yourmoney.com)

are designed to present a very jaundiced view of what drives injured people to make accident compensation claims and to give a very poor, money-grabbing, opportunistic impression of personal injury solicitors and their motives in pursuing accident claims on behalf of their clients with the tenacity that they do. 

“They’re just in it for the money.” 

As someone who has been qualified for over 30 years as a solicitor and who has practised in, this much maligned field of law, for even longer, I can tell you that is simply not true. It is certainly not the profession that I recognise, nor an accurate representation of what drives the vast majority of people who decide to make personal injury claims, after being involved in accidents at work, road traffic accidents, public liability accidents, or any other accident in which they suffered injury and which was the fault of another party.

But what about all these fraudulent claims that we hear about?

There’s no denying that some people make fraudulent personal injury claims. Yes, there are such things as ‘cash for crash’ schemes i.e. accidents that are staged. These often involve an innocent motorist, who by use of a carefully orchestrated plan, ends up being framed as the guilty party to an accident. Invariably, the accident causes ‘injuries’ to multiple passengers in the other vehicle, the one that our unwitting victim, through force of circumstances, had no choice but to collide with.

Some people too, are genuinely involved in accidents that weren’t their fault, but then exaggerate or make up altogether the nature and severity of the injury that they allege that they have suffered.

Yes, fraudulent  personal injury claims do happen. When they do and the perpetrators are caught and sentenced they often receive lengthy jail sentences. Quite rightly so too. No personal injury lawyer worth his or her salt, wants anything to do with fraudulent claimants. 

Are we really in the middle of an explosion of fraudulent claims? 

The insurers want the public to believe that we are. However, the evidence in support of their contention has always been rather fuzzy. Some of the most recent evidence that the ABI (Association of British Insurers) has released, at first sight seems rather damning, revealing there to be ‘1300 insurance scams uncovered every day.’ However when the Law Gazette’s reporter delved a little further into the web of statistics, they found that the figure of 1300 fraudulent cases, included cases which at first glance, had been suspected to be a little dubious by insurance company staff members. Many of these cases, were entirely free of any taint of fraudulent activity. 

How do we know so many were not actually fraudulent claims? That’s because the insurers, as part of the same briefing, also revealed that the actual number of people convicted of insurance fraud each week in the UK, is two. Given that there are 16,500,000 people with driving licences in this country, it hardly suggests that we are experiencing an epidemic of fraudulent claims. Not even a trickle.

Ok. If personal injury claims aren’t the ‘devil in disguise’ that some would have us believe after all, isn’t it still a fair leap to take suggest that they are actually a good thing?

We are not saying that they are a good thing, per se. Of course, someone suffering an injury, often serious, sometimes fatal as a result of a non-fault accident, isn’t a good thing. 

However, if someone is unfortunate enough to get injured in this way, then the process of a successful personal injury claim being made on their behalf, can produce a number of outcomes, which can be described as a force for good.

Almost all people who have ever made a claim for personal injury, and have been successful in that respect, would say, if asked, that personal injury claims are a force for good. Just ask someone who has finally settled or won their case. 

Ask, for example, an amputee who has lost his leg in a road traffic accident or as a result of an accident at work, how grateful he is that he found a specialist serious personal injury solicitor who won sufficient compensation to cover his client’s pain and suffering, but also enough to ensure that he could buy the best prosthetic limb available, to pay for the client to have help at home and generally  to make his life as comfortable as it can be given his new circumstances.

If personal injury claims aren’t seen as a force for good, it’s only likely to be by those who have never had the need to make a claim.

In what other ways can the making of a personal injury claim be said to be a good thing?

1.       The NICR Scheme

If a claim for personal injury compensation claim is successful, the insurers of those responsible for causing injury to an innocent party to an accident, are obliged to make a contribution to the cost of any NHS treatment received by the person that was injured. This is made, under the terms of the NHS Injury Cost Recovery scheme or ‘NICR’.

When a claim for personal injury is made, the representatives of the negligent party to the accident, have a duty to inform the CRU or Compensation Recovery Unit which operates within the Department for Work and Pensions. The relevant section of the NHS will inform the CRU of any form of inpatient, outpatient or ambulance charges that it has incurred in treating the person who is making a claim for personal injury compensation. Fixed tariffs apply to the individual services that can be charged back to the insurance company or solicitors acting for the negligent party, up to an overall cap of just over £53,000.

Once the claim for injury compensation has been settled, the paying insurance company have 14 days within which to reimburse the charges to the relevant NHS Trust (or Foundation Trust).

As a result of the NICR, the costs of treating those injured by another party’s negligence do not ultimately fall to be borne by the State.

If a personal injury claim had not been made, then the entire cost of treating the injured party  would have had to be met by the NHS, entirely.

Why isn’t this headline making news? It is not an overstatement to say that this scheme has saved the NHS millions of pounds, directly as a result of personal injury claims being made.  

2.    No Win, No Fee Funding Arrangements

Once upon a time, there was such a thing as Civil Legal Aid for personal injury claims, where the would-be claimant's financial situation warranted it. However, in 1998, the then Lord Chancellor, Lord Irvine announced that he was abolishing legal aid for most personal injury proceedings. The cost to the state was cited as the main driver for doing so. Instead No Win, No Fee arrangements in the form of conditional fee agreements (CFAs), which first came into being in 1995, became the favoured way of financing personal injury claims after the 1999 Access to Justice Act came into force  in April 2000. 

These enabled solicitors to act for personal injury claimants on the basis that if their claim wasn’t successful, then the claimant would have no legal fees to pay to their solicitors for the work done on their behalf. The claimant would be protected from personally having to pay the other sides legal costs, by the use of After the Event insurance arrangements, in the form of an insurance policy taken out on behalf of the claimant by their solicitors.

Where a  No Win, No Fee arrangement is in force, if the claimant wins their case, then they will pay to their solicitor, a success fee, capped in personal injury cases, at 25% of the compensation recovered by the solicitor, on their behalf. This, plus the cost of the Insurance premium, is the maximum amount that the client will be liable to pay to their solicitor.

The victorious claimant is worse off since the introduction of No Win, No Fee arrangements, because the same claim pursued with the benefit of Legal Aid, would result in them not having anything deducted from their damages (compensation). However, should the claimant not be successful, then their solicitor is no longer able to make a claim on the Legal Aid fund for the costs incurred in pursuing the claim. For the state, however, it represents a considerable saving. 

3. Personal injury claims can alter bad habits

Personal injury claims can make people, employers or institutions change negligent behaviour, or habits. Motorised vehicle users, employers, owners of businesses and local authorities are required to carry relevant third-party insurance, meaning that if they cause someone to suffer personal injury, their insurers will foot the bill. However, the price they pay, on top of any separate criminal charges for causing an accident, are increased insurance premiums.   

The very knowledge that negligent behaviour or poor working practices may lead to a claim for personal injury being made can be a force for good, in that it encourages improvements in health and safety measures. 

Conclusion

It’s doubtful if this article has wholly converted anyone reading it who started out from the premise that personal injury claims are a scourge on society, into full blown advocates for the notion that personal injury claims are actually a force for good. However, access to justice continues to be under threat. It's incumbent on those who work on behalf of injured claimants to make sure that their voices are heard and that the consistently negative publicity machine that attacks the claimant personal injury sector at every opportunity, does not go unchallenged.

Carl Waring is an experienced claimant personal injury solicitor. He was a partner in two personal injury firms, before setting up and running his own practice for 10 years. He is now a freelance legal consultant for a number of leading personal injury and medical negligence law firms, including Quittance Legal Services.

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