Personal injury claims rising despite fall in road accidents

A recent study conducted by the Actuarial Profession has shown that the number of road accidents in the UK has fallen by 11 per cent, however figures also indicated that the number of personal injury claims has risen by 20 per cent.

The insurance industry believes that the increase in personal injury claims following road accidents is costing around £400 million a year, as insurers pay out more money than ever.

A year-on-year rise in bodily-injury claims between 2010 and 2011 was the highest ever, with David Brown, the chairman of the working party which produced the report, noting that there appeared to be a “clear correlation” between the location of claims management companies’ offices and the “hot spots” for personal injury claims.

He went on to say that the rise in injury claims last year may be the “last hurrah” as new legislation is expected to be put in place to limit the way some companies do business.

The law, announced in March 2011 by justice secretary Ken Clarke, would prevent lawyers claiming “success fees” from the losing side, instead limiting them to receiving a share of the damages.

The proposals follow a review carried out by Lord Justice Jackson in 2010 at the request of the previous government.

Many commentators have blamed the rise of car accident claims on the growing “compensation culture” in the UK that the government is trying hard to combat, however experts within the personal injury industry have said that insurers are to blame.

Often parties involved in an accident will be contacted by the at-fault party’s insurer, offering anywhere between £500 and £1,000 to settle the matter, buying off the person who has been injured before they have the opportunity to seem medical or legal advice.

In other cases the injured person’s insurers will sell details to solicitors who will make a call and ask if they are looking to make a claim, and if the answer is yes, start the ball in motion.

Gary Lee, chartered legal executive at Hayward Baker, explained that the increase in the number of claims may not necessarily be a bad thing as the insurers are claiming.

After all, he noted that if a person is injured as a result of an accident on the roads due to someone else’s “act of stupidity” then why should they not claim compensation for the injuries, suffering, losses and inconvenience experienced as a result of the collision.

“And how is it that the fact that the public are more aware of their legal rights than they have ever been is seen as a problem? Of course it isn’t, but the insurance industry would like everyone to believe that the increased number of claims is down to fraudsters and ‘scroungers’.” 

He added that compulsory car insurance creates a huge market for businesses involved in the insurance industry, but that when it comes to paying out on personal injury claims they add insult to injury by claiming those looking to assert their legal rights are undeserving and a problem that need to be fixed by tighter regulation from the government.

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Personal injury claims rising despite fall in road accidents
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