Written evidence from Mr David Calvert

I am a barrister specialising in Manchester in personal injury law and have over 20 years’ experience in this area, particularly acting in respect of road traffic accident victims. I have acted for both claimants and defendants and feel I am well able to doubt the wisdom and logic of the government’s proposals.

Executive summary

-          The increase in whiplash claims has been brought about by the insurance industry themselves due to their business relationships with claims management companies and solicitors

-          The banning of unsolicited calls/approaches  to injured claimants will discourage speculative/non genuine claimants

-          The small claims limit increase will be unfair to unrepresented claimants against defendants who will be supported and funded by their RTA insurer

-          The tariff is unprincipled and has been arrived out contrary to the prevailing evidence – the tariff will of itself prevent claimants in making a claim in the first place because of its very low level or compensation

-          The reforms in drastically reducing claims from genuine claimants will only serve to assist the insurance industry

-          There are sufficient safeguards in the current procedural landscape to help insurers defeat fraudulent claims – including banning pre-med offers.

1. The definition of whiplash and the prevalence of RTA-related whiplash claims

1. Any attempt to provide a precise definition which would not be then subject to legal challenge is fraught with difficultly. The best definition would be by reference to soft tissue injury only but that on its own can fail to reflect the seriousness of the injury. There are occasions when a relatively minor soft tissue injury can be quite disabling to the injured claimant.

2. The prevalence of road traffic (whiplash) claims stems, in my view, from an increased awareness of injured persons of their ability to make a claim. The fault in this regard lies squarely with the insurance industry. I can say with some certainty from my own experience that following a RTA those involved in the collision (after reporting their accident to their insurance company) will often receive, within the hour, a telephone call from either a solicitor, or more usually, a claims management company.

3. The reason why these calls are made in the first place is simply because the person’s insurer had passed on (sold) the victim’s details to the solicitor or claims management company, with whom they have a business relationship with.

4. This telephone call will actively encourage, if not in some cases coerce, an individual into the making of a claim – usually within a short period of time after the accident.

5. If this type of unsolicited contact was subject to an outright ban then in my view the amount of whiplash claims would drop quite considerably.

6. It cannot be right that road traffic  insurers (who are the main architects of the current proposed reforms by reason of their persistent lobbying) are allowed to  profit from the selling of data which in itself encourages the very claims that they now wish to curb !

2. Whether or not fraudulent whiplash claims represent a significant problem and, if so, whether the proposed reforms would tackle this effectively.

1. It would be foolish to suggest that there are no fraudulent claims; I see it myself in both the bringing and defending claims. There are two types of fraudulent claims however. Firstly there is the claim where there was a staged accident or perhaps no actual accident at all. Secondly there is the exaggerated claim for injury where they has been an admitted collision but no (real) injury.

2. It is important to note that the only true and reliable evidence of a fraud is not a mere assertion by the paying insurer but rather a finding of fact by a court after having heard evidence. Any alleged fraud can however be dealt with more than adequately within the current regime.

3. Firstly, the making of pre- med offers (before a medical report is obtained) by insurers in my view is likely to encourage claims by those who are unlikely to have sustained an injury. Were this practice to be banned then inevitably some claimants “trying it on” will be discouraged.

4. Secondly the present fixed costs regime does provide some certainty to an insurer in defending a suspected fraudulent claim in that they know what their maximum exposure is going to be as to legal costs -should they be unsuccessful. If they are successful in defeating a fraudulent claim the courts can award costs and of course recommend that the fraudulent party be prosecuted.

5. Within the current regime there is no procedural or legal bar preventing a defendant in challenging claims suspected as being fraudulent. It should be remembered that an allegation of fraud by an insurer (who does have a financial interest in not paying out the claim) is a very serious allegation to level at a claimant which can have serious repercussions for that claimant if found guilty of the same. It seems to me to be grossly unfair that the current reforms effectively throw out the baby with the bath water in preventing genuine claims (because they will be both unrepresented and grossly under compensated) simply because there may be some claimants who are fraudulent.

3. The provisions in Part 5 of the Bill introducing a tariff to regulate damages for RTA-related whiplash claims, with an uplift in exceptional circumstances; and banning the settlement of claims without medical evidence.

1. The proposed tariff has, to be frank, been plucked from the air without any regard whatsoever to the current scheme of compensating claimants which has been developed and fine tuned over the last 30 or so years.

2. The Judicial Studies Board (now the Judicial College) has periodically provided their guidelines for personal injury awards. This document is a careful reflection of the awards made by courts for a whole variety of case. In respect of whiplash claims it has been developed in such a way as to provide both claimants and defendants with a degree of certainty as to the likely bracket for an award.

3. To simply slash the existing banding and introduce tariffs some 75% below the current figures is simply without logic or principle. It serves only to benefit the insurance industry and their shareholders.

4. How can it be justified to say to an injured (and genuine) claimant that your 6 month injury is now worth something in the region of £2000 but after October 2018 it will be worth £500 – and in doing so provide no explanation other than you (the claimant) will suffer but the insurer paying your damages will undoubtedly benefit.

5. Further the introduction of such an unprincipled tariff, in conjunction with the increase in the small claims limit (and therefore no legal representation), will of itself discourage genuinely injured claimants because they will view it as a pointless exercise in having to obtain their own medial evidence, fill out court forms, deal with a large insurer and finally attend court only to be awarded the meagre figure of £500 for a 6 month injury.

6. The tariff on its own is bad enough but along with the increase of the small claims limit a significant number of genuine claimants will simply not bother claiming at all. One has to ask one’s self who does this benefit? The answer is not difficult to come up with.

7. Applying an uplift, albeit in exceptional circumstances, is not a substitute for the current regime. Given the exceptional test it is unlikely to be used frequently and will put off a large number of genuine and deserving claimants.

8. Pre- med offers should be banned, for the reasons already advanced above.

4. The impact of raising the small claims limit to £5,000 for RTA-related whiplash claims, and of raising the small claims limit to £2,000 for personal injury claims more generally, taking account of the planned move towards online court procedures.

1. Raising the small claims limit (of itself) will have the effect of putting of genuine claimants daunted by the court process; encourage the unregulated claims management companies to move into the market place currently occupied by regulated solicitors and barristers and will clog up the courts with claimants who are unrepresented which will be a drag on judicial time and resources.

2. While an online court may alleviate some of these issues it would seem sensible to first establish the online court and then (after a period of review) consider raising the small claims limit.

3. Raising the limit to £5000 is in itself a step too far given that this will, at a stroke, prevent quite seriously injured claimants in making a claim in the first place. Those claimants that do make a claim, or contest the issue of liability will be met by a defendant who will be represented by his RTA insurer.

4. The small claims court can only fairly work when parties have equality of arms in terms of representation – i.e. they are both represented or both represent themselves.

5. Road traffic accidents are unique due to the compulsory requirement to have insurance. Therefore any defendant disputing liability will almost always have his RTA insurer indemnifying him and providing him with legal advice and professional legal representation. This is grossly unfair in the small claims regime.

6. Further, as already indicated above, one cannot divorce the increase in the small claims limit from the joint effects of the tariff.

5. The role of claims management companies in respect of these matters

1. Claims management companies currently exist to obtain details of a potential claimant and then to obtain a financial benefit in the processing of that claim thereafter by solicitors.

2. They effectively act as a middleman between the claimant and the solicitor, however they undoubtable exist to encourage the making of claims – genuine or not.

3. In fact such companies are not concerned about the veracity of a claim as their business model is such that they earn revenue by the introducing of a claimant to a solicitor regardless of the success of the eventual claim.

4. Such unsolicited advances to claimant after a road traffic accident should be banned in their entirety. As I indicated above these action serve only to encourage non genuine claimants or claimants only suffering a very minor injury (day of 7 days duration) to exaggerate their claim.

5. Further they are likely to take a significant proportion of claimants’ damages in circumstances where in the event of a dispute (as to the quality of the service provided) a claimant does not have the benefit of a regulatory body to complain to.

6. The government needs to ask itself is it wise or indeed appropriate to remove a regulated and professional body of talent and replace it with an unregulated and legally untrained group of companies who may not have the claimants best interests at heart and/or be unaware of their duties to the court.

18 March 2017