Personal Injury Fraud

Jim Shannon Excerpts

Wednesday 18th November 2015 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I apologise, Mr Wilson, for being a wee bit late; I had a Committee to attend, but I rushed down straight away. I hope to return to it later, so I also apologise in advance if I have to leave before the shadow Minister, the hon. Member for Hammersmith (Andy Slaughter), and the Minister speak.

I congratulate the hon. Member for Lincoln (Karl MᶜCartney) on securing the debate. It is good for subjects that concern us all throughout the United Kingdom to be brought before the House. Every time there is a fraudulent insurance claim, we—those who do not do such things—pay for it. We have to highlight the issue. It is good to see the shadow Minister and the Minister in their places; I always look forward to the response, and I do so today.

Precise levels of fraud are unknown, but the Association of British Insurers recently published figures showing that 59,900 dishonest motor insurance claims were uncovered in 2013. I am sorry if that statistic has been reported already, but if not, I hope that it adds to the debate. That figure for claims was an increase of 34% on 2012 and represented a value of £811 million, itself up 32% on 2012. Those are staggering figures, given their effect on insurance. Dishonest claims comprise about 8% of all motor claims registered with the compensation recovery unit in 2013.

The real victims of insurance fraud are the hard-working, everyday people who have to pay inflated premiums because of the selfish actions of selfish individuals, who far too often get away with their criminal actions. Of all motor claims registered, 8% or nearly one in 10 is fraudulent. That is staggering—and that is only those claims that have been discovered to be dishonest. I am not saying that every claim is dishonest—I cannot say that, because I have no evidence for it—but that figure might be only the tip of the iceberg.

Around 775,000 motor personal injury claims were registered with the Department for Work and Pensions compensation recovery unit in 2013-14, compared with about 520,000 claims in 2006-07, only seven years earlier. That is an increase of almost 30%. My figures are different from those of others, who say there has been an increase of about 50% in claims. The increase has coincided with a 23% decrease in the number of road traffic accidents reported to the police. The stats prove the need for this debate.

We do not need to be rocket scientists to work out that something about the scale of that increase is suspicious, especially given the trend in road traffic accidents. That all adds to the evidence for my suggestion that the 8% of claims that have been found to be dishonest are, with respect, only the tip of the iceberg. If the trends continue, even higher premiums will result for law-abiding, hard-working people. Our role as parliamentarians is to ensure that we protect innocent people from the selfish criminals who make fraudulent claims for their own gain.

On 27 May I asked a question of the Secretary of State about personal injury compensation and what steps had been taken. To be fair to the Government—let us give credit where credit is due—they have responded and taken a number of steps. They have fixed the cost of medical reports and ensured that the provider of a report should have no direct link to the claimant. That might seem to be a small matter, but it is an emphatic and strong step to take. Also, since 1 June, solicitors have been carrying out a previous claims check on claimants before pursuing a personal injury claim. I am often reminded of “Only Fools and Horses” on television, when Uncle Albert falls down the hole where the beer kegs go in—but he has made a similar claim six or seven times before. The check will stop people making claims six or seven times, because the records will be consulted to ensure that it does not happen.

Another step taken is that, since 6 April, medical reports for claims have to be submitted through the new MedCo portal. Again, a process has been tightened up; it is another step in the right direction. Also, referral fees paid between lawyers, insurance companies and claims management firms are now banned—a clear step in the right direction, to ensure that things go the right way. Furthermore, from January 2016 there will be a new accreditation scheme for the medical experts who provide the medical reports. All those Government actions before and since my parliamentary question are excellent steps in the right direction.

I welcome the opportunity to discuss what is truly an epidemic, with an impact on each and every one of our constituents. I hope that it is something we can work together on, and that we can come up with a more robust and bipartisan solution that will see those selfish criminals dealt with appropriately. Regulations already exist, and the hon. Members for Lincoln and for Croydon South (Chris Philp) have indicated other steps they wish to be taken, which would help the Minister to tighten the screws a wee bit more. We need to do something about the massive increases in claims, but the regulations in place may not be as robust as we would like. The question is whether we need to create additional legislation or should simply push for more rigorous enforcement of current legislation. I do not know the answer, but I am sure the Minister can tell us.

I hope my contribution has been helpful, but I do know one thing: my constituents pay the highest insurance premiums in the whole United Kingdom. We do not have the special offers that appear on TV—on the bottom of the screen, it always says, “Northern Ireland not part of the deal”—and we get a wee bit narked about insurance premiums. We therefore need to step down hard on those who make fraudulent claims. If we can stop them, the premiums for everyone else will be lower.