Personal injury claims have been a feature of litigation for many decades now, but in recent times, have become the subject of very vicious targeting by Insurance companies, seeking to make a justification for the charging of large premiums on a legal system that allegedly is overly generous, as regards awards made to persons making such claims. However, this not at all accurate and indeed several measures over the last two decades have been introduced to streamline the process and offer assistance to Solicitors, Insurers and the Judiciary in assessing compensation. The introduction of The Personal Injuries Assessment Board to assist in quantifying damages outside of a court forum and the establishment of a Book of Quantum to give guidelines regarding compensation for various injuries are two such measures.
Similarly, the Personal Injuries Commission’s report published in September 2018 included a recommendation for new judge-made guidelines for personal injuries damages and which gives further consistency to the process under which claims are made and assessed. Any such improvement in consistency in personal injury damages is a positive prospect, and it is also correct that judges, who are uniquely placed in the process, should be in a position to develop strong guidelines for accident awards.
However, reducing damages may solely benefit the insurance industry and could do harm to those who have suffered injury. There is no evidence that reducing the level of compensation awarded to personal injury victims will result in premiums going down. We must avoid a situation where injury victims end up in a poorer position while insurance companies keep getting richer. Simply reducing damages takes money away from those who suffer injuries through no fault of their own and puts it in the pockets of the already very profitable insurance companies. It is critical that the judiciary maintains a balance between the rights of injury victims and appropriate compensation levels.
“A Reduction in claim costs will reduce people premiums” – False
In relation to claims costs, which comprise the various expenses associated with the processing and handling of insurance claims of which legal fees are just one element, a common untruth promoted by insurance companies is that a reduction in claims costs will lead to a reduction in premiums. The cost of making a claim rose by around 2.7% per year between 2011 and 2016, as outlined in the May 2018 Cost of Insurance Working Group Report. This is against the 22% increase in insurance premiums in 2016 alone. This is a huge differential.
Insurance premiums are calculated by insurance companies based on several different factors, and claims costs are incorrectly and unfairly blamed
The reality is that our Judiciary comprises experienced Lawyers, and they have a range of guidelines to assist them in so deciding. They are best placed to decide on any particular individual claim and to accurately assess appropriate compensation. Recent decisions from the Court of Appeal show that judges are not afraid to reduce awards they consider to be too high, particularly in cases involving soft-tissue ‘whiplash’ injuries. This has already led to downward pressure on damages and settlements across the board. Therefore, like all justice, the assessment of damages should be administered in court without external influence from parties with vested interests, such as insurance companies and that a correct balance is preserved by courts to ensure fair and appropriate compensation in individual cases.