Civil Liability Bill [Lords]

Debate between Craig Tracey and Mary Robinson

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 23rd October 2018 Commons Chamber

[Mary Robinson]

I am talking about the compensation that would normally be paid by train operators.

It is important that we tackle whiplash fraud, but it is hard to explain to those who are injured that the same injuries sustained in different circumstances—for example, a comparable injury at work—should be compensated differently. Under the reform proposals, someone who had been involved in a road accident would be entitled to £3,910 for a whiplash injury lasting up to two years, but would be unable to recover the cost of paying a lawyer to assert their rights. Someone who suffered an identical injury at work would be entitled to £6,500, and would be able to recover costs. For many people, it goes to the heart of ensuring fairness that comparable injuries should attract comparable awards—if awards are indeed to be given—whether those injuries were sustained in a road traffic accident or incurred at a place of work.

If, as is hoped and predicted, these changes result in savings to the insurance industry, it is important for members of the public to see that the savings are passed on via reduced premiums. Concerns were raised about that in Committee, and I am encouraged that the Government accepted amendments that will hold insurers to account. As amended, the Bill places a statutory requirement on insurers to provide the Financial Conduct Authority with certain information to enable Treasury Ministers to report to Parliament on whether the insurers have upheld their public commitments by passing on savings. The Government have estimated that these measures would lead to a reduction in motor insurance premiums of approximately £40 per customer per year. I expect the industry to demonstrate that savings are being appropriately passed on, so that consumers can see fairness in the insurance system.

[Craig Tracey]

Is my hon. Friend aware of the support for the Bill in its current form? A survey conducted by Consumer Intelligence showed that the most important factor in a low-value personal injury claim was a simple claims process, and the least important factor was the ability to claim back their legal costs.

[Mary Robinson]

It is absolutely right that people support reform of the system, and I support the Government’s action in doing so. I am keen to ensure that we can secure fairness for everyone through the Bill.

According to the recent AA British insurance premium index, these reforms have already triggered a fall in premiums owing to the expectation that claim costs will fall, and only yesterday it was reported that motor premiums had fallen for the first time in years: last month they were almost 10% lower than they had been in the same month in 2017. That means that the average driver is £45 better off as a result. Consumers will be pleased with lower premiums, but they must be convinced that that is worth any detriment that they may experience should they become victims of traffic accidents.

We might not be having this debate at all were it not for fraudulent claims. I can almost guarantee that, at some point in the past year, every Member—including, perhaps, the Minister—will have been contacted by a claims management company, usually wrongly asserting that they have been involved in a car accident recently, and can lodge a claim. That seriously concerns and aggravates many people. A 2017 YouGov report shows that more than two thirds of people are in favour of a ban on cold calling for personal injury claims. Cold calling is a particular issue for the vulnerable and the elderly, who may be talked into making fake or exaggerated claims. A Justice Committee report earlier this year stated that the recent restrictions on cold calling by claims companies

“do not go far enough and that an outright ban should be introduced.”