British Insurers Call for Government Action on Personal Injury Compensation

The Association of British Insurers (ABI) has joined with the Confederation of British Industry (CBI), the UK’s leading employers’ organization, and Citizens Advice to call for the Government to introduce its proposals for reforming personal injury compensation without delay.

While the ABI stated that the adoption of such reforms would “enable personal injury compensation to be paid more quickly to injured people,” it is also a call to reign in the growing tendency of UK tort lawyers to emulate their American counterparts in seeking compensation through legal actions.

The ABI noted: “In April 2007 the Government published proposals for a faster, fairer, more cost efficient compensation system. Implementing these proposals now would save 110 million days a year in delays dealing with personal injury claims following motor accidents alone.”

The ABI further explained: “In the past year 200,000 of the 250,000 personal injury claims due to motor accidents would have been straightforward and non-contentious. It currently takes an average of two years -or 730 days – to settle these claims. That is a total of 146 million working days. If the Government’s proposals were implemented now, this would reduce by 110 million to a collective 36 million days.”

Speaking at an ABI parliamentary reception today to launch “Adding Insult to Injury: the need for reform of the personal injury compensation system,” Stephen Haddrill, the ABI’s Director General, warned: “Our compensation system is failing many claimants. It is too slow, riddled with high legal costs and undervalues rehabilitation.”

He stressed that while “insurers want to pay compensation and arrange rehabilitation faster than the current system allows, personal injury claims following a motor accident take on average two years to settle, with three years on average for workplace claims. This is unacceptable.”

He added that, although the “Government has grasped the need for reform,” the ABI is now looking “forward to implementation of their proposals without further delay. Every day without change is another day of unnecessary delay for claimants.”

The CBI said the organization “will work in partnership with others to facilitate a system that is claimant-centered, fair, more streamlined, less adversarial and enables early rehabilitation so that claimants can receive speedy treatment and return to normal work and life as quickly as possible”.

James Sandbach, Citizens Advice, noted: “For many thousands of people who have experienced accident or injury through no fault of their own, often suffering disabling effects, the system is failing.”

The ABI’s bulletin noted that the Government’s proposals include the following:
— Early notification of claim – claimant lawyers should notify insurers about a claim within five days of taking instructions from a claimant.
— Remove work duplication – insurers should investigate claims, and if they agree they are liable will negotiate settlement. There will be no need for claimant lawyers to carry out their own investigation into liability.
— Set challenging time scales for insurers – who will have 15 days to decide if they are liable for a motor claim and 30 days for a n employers’ liability or public liability claim.
— A simple process to negotiate level of compensation – through defined time scales within which both sides should aim to agree settlement. Where agreement cannot be reached, the case will be referred to a district judge for a decision.

“Adding Insult to Injury: the need for reform of the personal injury compensation system,” is available from today at: http://www.abi.org.uk/BookShop/ResearchReports/PI_Reform.pdf

Sources: Association of British Insurers – www.abi.org.uk and the Confederation of British Industry – www.cbi.org.uk