Oral Answers to Questions
Karl McCartney Excerpts(1 year, 5 months ago)
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Alex Chalk
We have already taken important steps to recalibrate disclosures so that they have to take place only when absolutely necessary, but the hon. Gentleman is right about employment. A prisoner who gets into employment is 10% less likely to commit an offence. I am delighted to see, through the huge efforts of employment advisory boards, employment advisers and employment hubs in custody, that the proportion of offenders in employment six months after release has doubled in the past year. A lot of work has been done, but of course there is further to go.
Karl MᶜCartney (Lincoln) (Con)
Earlier, the Minister was asked about the backlog of criminal court cases and answered at length regarding Crown courts. On behalf of magistrates and magistrates court staff, can we have an update on the situation with magistrates courts, please?
The Parliamentary Under-Secretary of State for Justice (Mike Freer)
The magistrates have continued to make good progress in reducing the backlog, and that is a testament to the work they do on our behalf.
Oral Answers to Questions
Karl McCartney Excerpts(3 years, 3 months ago)
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Tom Randall (Gedling) (Con)
Karl MᶜCartney (Lincoln) (Con)
The Lord Chancellor and Secretary of State for Justice (Robert Buckland)
The Government recognise the deep distress that is caused when a pet is stolen, and the pet theft taskforce carried out a thorough investigation of this issue. Its excellent report, published earlier this month, contains a comprehensive set of recommendations that will allow us to tackle this issue head on.
Robert Buckland
My hon. Friend is absolutely right. The use of the term “abduction” is a crucial reflection of the fact that these are sentient beings; they are not mere chattels or goods. The emotional effect both on the pets and their owners has to be taken into account. I think there is a read-across to animal cruelty and the important reforms that we made recently in increasing maximum sentences.
Karl MᶜCartney
I thank my right hon. and learned Friend for his response and for his recent visit to our Crown court in Lincoln castle, the magistrates court in the city and Her Majesty’s prison Lincoln, none of which are up for sale, Mr Speaker, but the judge’s lodgings are, if you are interested. Pets are not just animals; they are often members of families, and many of my constituents in Lincoln would welcome changes to ensure that we protect our pets to the highest possible degree. As well as strengthening prosecution powers through the pet abduction offence and expanding pet ownership databases, does my right hon. and learned Friend agree that we must educate prospective owners to buy pets only from reputable breeders and potentially encompass farm animals in the same legislation?
Robert Buckland
My hon. Friend hits the nail on the head. The idea that buying an animal by the side of the road or in a garage forecourt for cash is somehow legitimate trade is clearly wrong. I am grateful to colleagues at the Department for Environment, Food and Rural Affairs for doing important work on promoting safer purchasing through the “Petfished” campaign. We will build on that in the way in which we identify and track cases better, improve the recording of keepership data and deal with through-the-loophole breeders, who are frankly responsible for a lot of cruelty and suffering.
Oral Answers to Questions
Karl McCartney Excerpts(4 years, 1 month ago)
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Robert Buckland
I can assure the hon. and learned Lady that the information about the serious allegations about the attack has been communicated to the appropriate Ministers and that everything that I have done and will continue to do is entirely consistent with my duty. Although, sadly, it might be the province of previous and current Prime Ministers to make provocative and sometimes lively comments about the legal profession, it is not the job of the Lord Chancellor to police every jot and tittle. I will continue to make sure that we get the tone of the debate right and that where we can improve on our language, we will do so.
Karl MᶜCartney (Lincoln) (Con)
Stephen Hammond (Wimbledon) (Con)
The Lord Chancellor and Secretary of State for Justice (Robert Buckland)
Reoffending is a complex issue, so we need to take a wide-ranging approach. That is why we will invest £20 million in the prison leavers project to test new solutions. We are also making sure that our new prisons have rehabilitation right at their heart. Our programme to build 10,000 additional places, plus two new jails at Wellingborough and Glen Parva, will deliver improved security and better training facilities to help offenders to find employment on release.
Karl MᶜCartney [V]
May I be the first of the magnificent seven to thank my right hon. and learned Friend for that answer? Reoffending rates have historically been too high, as many of us are aware from our time in court as advocates or on the magistrates bench. Does he agree that working with organisations and businesses such as the Gelder Group at HMP Lincoln, which has been involved in delivering meaningful training courses to equip those spending time at Her Majesty’s pleasure with useful skills, is the right way to provide inmates with a positive restart to their lives after jail time?
Robert Buckland
My hon. Friend, who has considerable experience of the justice system in a former capacity, is right to highlight the work of organisations such as the Gelder Group and its great work in delivering training to prisoners in his county. He is also right to identify how transformative training and work can be for serving prisoners and those who are released, which will take a cross-government approach as well. I was delighted to hear recently about the great work of Agile Homes at Her Majesty’s Prison Leyhill, which is not only training men to build homes but helping them to save for their own homes in future through work.
Oral Answers to Questions
Karl McCartney Excerpts(7 years, 9 months ago)
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Karl MᶜCartney (Lincoln) (Con)
The Minister for Courts and Justice (Sir Oliver Heald)
May I pay tribute to the work that my hon. Friend has done on the Transport Committee to highlight this important issue? We hope that every motorist will see a benefit of £40. We are certainly pressing hard on the issue.
Oral Answers to Questions
Karl McCartney Excerpts(8 years, 9 months ago)
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Michael Gove
The hon. Lady makes a very good point. As part of the youth justice review, I have tasked Charlie Taylor with making sure that purposeful activity—education, sporting activity and time outside—is part of the regime that all young offenders in custody can enjoy.
Karl MᶜCartney (Lincoln) (Con)
What assessment has my right hon. Friend made of the impact on prisoner mental health and rehabilitation of ensuring that prisoners serve their sentences as close as possible to their family homes?
Michael Gove
My hon. Friend makes an important point. It is important to ensure that families have access to prisoners. Sometimes, of course, that is facilitated by the prison or secure training centre being close to families, but there are ways to ensure that even geographically distant families have effective access to their loved ones.
Personal Injury Fraud
Karl McCartney Excerpts(9 years, 1 month ago)
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Karl MᶜCartney (Lincoln) (Con)
I beg to move,
That this House has considered personal injury fraud.
Mr Wilson, thank you for presiding over this debate, which I feel fortunate to have secured. It is and will always be a pleasure to serve under your chairmanship.
I declare an interest as both a justice of the peace and one of the 30 million-plus drivers in our country. I am also a freeman of the City of London, and since securing this debate I have been contacted by various claims management companies, solicitors and insurers, big and small, who have offered information and briefings to assist my contribution. I explicitly thank the Industry and Parliament Trust and Liverpool Victoria, or LV=; I spent Monday with various of their personnel who deal daily with fraudulent personal injury claims, claimants and the companies that are farming information—or vishing, as I learned—to generate moneys for themselves. Ultimately, anyone with an insurance policy is paying for this immoral action through rising insurance premium costs.
Karen Lumley (Redditch) (Con)
I thank my hon. Friend for securing this important debate. Does he agree that this constant telephone badgering of people is extremely upsetting, especially for people with serious mental health issues?
Karl MᶜCartney
I entirely concur with my hon. Friend. Indeed, I will cover that issue later in my speech.
Before I had the luck, honour and privilege to become a Member of Parliament in 2010, I was the victim of a car insurance scam, having previously suffered twice after uninsured drivers caused accidents involving my family’s vehicles. In 2009, at a roundabout near Cheshire Oaks, a car purposely stopped in front of me for no reason. The ensuing collision slightly damaged my bumper—well, in fact it was the front bumper of my father’s three-week-old 700 series BMW. Despite the low speed and very minimal damage to just his bumper, a claim was made with my insurers for some £16,500.
The court threw out the claim—after a protracted, three-year-long case—as, among other things, the car owner claimed £1,000 for a vehicle recovery charge from a company owned by his cousin in St Albans, when actually he drove the vehicle away. The two circa 21-year-olds in the vehicle were, he claimed, actually his father, who used the vehicle in his work as a driving instructor. As the case progressed, it turned out that the driver of the vehicle with which I collided was not the driver who attended court.
After the hearing, it was revealed that the same scammers had attempted, with success, similar claims on six previous occasions in just a few years, with the vehicle registered at the same address. My experience was a classic example of an induced motor accident—a “crash for cash” scam—but what happened to the fraudsters? The judge was very good in his summing up, but admitted that even though he wanted the police to investigate the perpetrators, there was little likelihood that that would occur. Taxpayers, who fund the court system, find that they pay not only higher insurance premiums, but in a secondary way, through the valuable court time taken up with disputing and proving that fraudulent claims are being made.
During my time with Liverpool Victoria on Monday I was shown various examples of fraudulent personal injury claims in which judges really did not get it. Refreshingly, though, there is some evidence that rare individual judges are taking positive steps to halt the onward and upward march of fraudulent claims, which cost the Government and the population of our country considerable sum each year—and all power to them. I trust that my right hon. and learned Friend the Member for Kenilworth and Southam (Jeremy Wright), my hon. and learned Friend the Member for South Swindon (Robert Buckland), and my right hon. Friends the Members for Derbyshire Dales (Mr McLoughlin), for Surrey Heath (Michael Gove) and for Tatton (Mr Osborne), along with their ministerial colleagues, will take note if passed details of this debate.
The list of most eminent places and their elected representatives that I have just elucidated helps to crystallise part of the problem we have in dealing with this issue: it cuts across a number of Government Departments. But that should not be a problem, now that it has been clearly identified; we just need someone, and their civil servants, to want to proactively take control and deal with it. I am sure that the good Minister, who represents Gosport, will have noted my plea, along with our other colleagues, and will pass it on to open ears in the corridors of power.
According to the insurance company Aviva, as well as Enterprise Rent-A-Car, City of London Police, Keoghs, Liverpool Victoria and many others who have contacted me and operate in the transport, insurance and judiciary sectors, a minor personal injury—mainly whiplash—claim adds at least £93 to the average annual motor premium. It is a £2.5 billion per annum problem, and around half of the costs relate to very minor injuries which require little or no proof of injury.
It would seem that we in this country have the weakest necks in the world—certainly in the parts of the country that are hotspots for such claims. Funnily enough, as a geographer, the correlation seems to be phonetic: most of the places begin with B—but I digress. It is such a serious issue that Volvo engineers from Sweden are most interested in our seeming propensity for whiplash injuries, especially as for some years their cars have been designed and engineered to minimise such neck complaints in minor and low-speed bumps and scrapes. Later in my speech I will return to how we compare to other nations in our likelihood to suffer from so-called whiplash injuries.
The culture of personal injury fraud is often fuelled and overseen by organised crime, and there are many examples of opportunistic claims that put innocent motorists’ safety at risk and inflate their premiums. Many fraudulent claims stem from nuisance calls made by some, but definitely not all, claims management companies, and—perhaps more worrying—by so-called marketing companies acting directly at the behest of some infamous and certainly not morally superior solicitors and law firms.
The so-called marketing companies are directly providing leads to claimant solicitors, underlining the fact that there is still too much cash in the system, despite the changes made in the Legal Aid, Sentencing and Punishment of Offenders Act 2012, known colloquially as LASPO. How are these solicitors and law firms and their partners in crime, the marketing companies, securing the supposedly outlawed trade in personal data—our email addresses, home and mobile phone numbers through which we receive unwarranted and unwanted emails, calls and texts exhorting us to make claims, as there is “£3,000 to £4,000” just waiting for each person who makes a personal injury claim? That is the nub of the problem.
We need to stamp out the cold calling, and quickly. I have suffered, as have many of my constituents and those of other colleagues present, and, indeed, those of colleagues who could not attend, such as the hon. Member for Newport West (Paul Flynn), who offered his support but is engaged elsewhere in the House. I believe that my hon. Friend the Member for Croydon South (Chris Philp) will speak about cold calling and its relationship to the myriad fraudulent claims in the country as a whole later in the debate.
Personal injury insurance fraud can be summed up as manifesting itself in a number of ways, and some aspects are easier to detect than others.
Sir Oliver Heald (North East Hertfordshire) (Con)
I congratulate my hon. Friend on securing this debate. Does he agree that one way forward might be for the insurance companies to provide a detailed dossier of information to the Solicitors Regulation Authority? It is clear from what he is saying that there is a systemic problem of which that authority should be fully aware of and perhaps look into.
Karl MᶜCartney
I agree entirely with my hon. and learned Friend. In fact, some insurance companies are now acting more coherently, shall we say, and working with each other rather than always acting in competition. They have realised that the problem is not going to go away and has in fact got a lot worse.
The three most common strands of third-party fraud are: accidents fabricated or deliberately staged purely with a view to submitting false claims for compensation; fabricated personal injury claims where a genuine accident has occurred; and genuine accidents and injuries, but with aspects of the claim being fabricated or exaggerated.
Mary Robinson (Cheadle) (Con)
I thank my hon. Friend for securing this debate. Does he agree that not only are the fraudulent claims he describes made at the cost of law-abiding motorists, but they cause a great deal of distress to the innocent victims, who see escalating charges and escalating amounts being claimed against them?
Karl MᶜCartney
Indeed. I concur with my hon. Friend; she is entirely correct. Later in my speech I will describe the various other aspects that cost the nation, the taxpayer, the Government and organisations involved in this sector.
Fraudulent injury claims cause increasing costs in car insurance for consumers and businesses. The UK now sees more compensation claims for whiplash per car accident than any other western European country. As I have already said, we are known as having weakest necks in Europe. Efforts by the Government have had limited effect, and personal injury claims are now at a record high. In the first quarter of 2015, the number of personal injury claims made through the Ministry of Justice claims portal was the highest on record, with 13% more than in the same period for 2011-12, before LASPO was introduced. Claims data for 2015 so far show that, for some companies, 80% of all personal injury claims received were related to whiplash.
Liverpool Victoria estimates that, in 2015, at least 11% of the average car insurance premiums it provides can be attributed to paying for whiplash claims. That is a significant and unnecessary cost for consumers—our constituents. At Liverpool Victoria, 10% of claims handlers are employed purely to tackle fraudulent claims, at an annual cost to the business of £4.5 million to run the team. Those costs are ultimately paid for by customers, further increasing the cost of car insurance for individuals. Businesses are also affected by rising commercial insurance premiums for company vehicles. For small businesses in particular it is an unwelcome and unnecessary cost.
The Information Commissioner’s Office received 180,000 complaints about nuisance calls or texts in 2014-15—a 12% increase on the previous year. According to research that Liverpool Victoria commissioned in July 2015, each British person—importantly and unfortunately, this includes children—receives an average of 468 nuisance calls and text messages every year. We waste six and a half hours a year dodging calls, deleting texts and listening to phone messages that none of us wanted to receive. One in three reported receiving more nuisance calls and texts than calls from friends and family, and more than 80% of those who receive personal injury calls have never even been involved in an accident for which they could, if they wanted, have made a claim.
Fraudulent claims also have a cost for our GPs and the NHS as a whole. This is an area of great concern, as fraudulent claims are putting additional pressure on an already-strained NHS. Liverpool Victoria research carried out with GPs shows that GPs now see 116,000 people every month that they suspect are inventing or exaggerating an injury to claim compensation, which equates to nearly 1 million wasted GP hours every year. At this point, I will depart from my written speech and say that I may include the Secretary of State for Health in the list of eminent persons I read out earlier, because this is a serious issue for the NHS.
Claims farming generated by rogue solicitor firms and claims management companies is creating high volumes of fraudulent and exaggerated personal injury claims. Aged claims farming is the new norm, and it has increased since LASPO was introduced. Insurance firms have seen a significant increase in claims farming—the practice by which a claimant solicitor or a claims management company targets individuals with nuisance calls and texts to encourage them to make a personal injury claim. It now represents between 20% and 28% of all claims received by some companies each month. In January 2013, before the introduction of LASPO, the figure was 13% or below.
A high volume of farmed personal injury claims are being generated by just a few rogue solicitor firms. Despite evidence being passed to the Solicitors Regulation Authority, this behaviour has not been challenged, but it should be. Although the practice of claims farming is widespread, a minority of law firms are driving the problem: Liverpool Victoria’s analysis shows that more than 41% of suspected farmed claims that it received in 2015 were submitted by just 10 law firms.
Let me turn to the issue of cold calling and vishing. There is clear evidence, as my hon. Friend the Member for Redditch (Karen Lumley) said, that claims management companies and solicitor firms that cold call and text people are targeting vulnerable individuals. Claims management companies target individuals by calling directly from purchased marketing lists. The practice is widespread. Research conducted by Liverpool Victoria in June 2015 shows that the UK public collectively receive more than 60 million nuisance calls and texts every day—equivalent to 43,000 a minute. A significant proportion of the approaches are from lawyers or claims management companies trying to encourage individuals to make a personal injury claim.
Worryingly, the number of claims being made without the knowledge or consent of the claimant is increasing. A range of unlawful tactics are used to obtain and verify the data. In such cases, claims management companies act without formal instruction and the claimant does not sign any documents. Some claims management firms have even forged claimants’ signatures. The practice of vishing insurance companies is rife. As I heard on Monday, the number of vishing calls that London Victoria’s staff receive is rising: in just this year to October, it received more than 3,000 vishing calls.
I believe that the Government need to address the root cause of motor insurance fraud and customer harassment: the excessive cash in the system that creates unwarranted incentives. To deal with the problem, the Government should, first, introduce a minimum threshold for simple whiplash claims and replace cash compensation with rehabilitation, which would deal a fatal blow to those making nuisance calls and the “cash for crash” industry.
Secondly, the Government should ensure that magistrates, district judges and Crown court judges are aware of the cost of fraudulent claims to the nation and the need to take affirmative action, including dealing with uninsured drivers with parity. Why would somebody get insurance if they need to be caught and fined four times in a year to equal the cost of insuring their vehicle?
Thirdly, the Government should remove the civil court aspect of chasing a fraudulent claimant. We need to stamp out this pernicious crime. Only by instructing the Crown Prosecution Service to go after fraudulent claimants actively, backed up by the police, will we do so.
The real kicker of those three simple undertakings is that the vast majority of the voting public—certainly, 100% of law-abiding, insurance premium-paying drivers—would be utterly joyous and would commend us for doing some good in this place and making their lives easier and, ultimately, cheaper.
The challenge is that, as the Association of British Insurers’ premium tracker shows, the average motor premium for the second quarter of 2015 is £367, and it is increasing. Similarly, the number of whiplash claims is showing worrying signs of rising again. The Ministry of Justice’s claims portal shows that it has increased by 6% in the past nine months. There remains excessive cash in the system, which continues to fuel exaggerated and fraudulent personal injury claims, putting upward pressure on motor premiums. Organised and opportunistic crimes such as “cash for crash” continue to put motorists’ personal safety at risk while inflating all of our insurance premiums. Nuisance calls encourage fraudulent behaviour, leave law-abiding drivers vulnerable and mean that the staff of our insurance companies are encouraged—hounded, even—to breach data rules. Bogus data management companies and similar organisations, such as some data marketing companies and claimant solicitors, continue to plague motorists with texts and calls. They need to be regulated as a whole while the compensation culture and the opportunities remain.
According to the ABI, almost 130,000 cases of claims fraud were detected in 2014, totalling more than £1.3 billion—a 4% increase in value compared with 2013. In addition, there were 212,000 cases of application fraud. Between 2009 and 2014, the overall value of fraud detected rose by 57%. The insurance industry detects fraud in less than 2% of claims, but one in nine whiplash claims are fraudulent. The average cost of a bodily injury claim is £10,680, and the overall average for all claims is £2,649. Bodily injury claims make up 9% of the total number of claims, yet represent 51% of the total value of claims.
Many insurers have made it clear to me that they are taking action. Between 2005 and 2013, the number of UK motor accidents fell by 30%, but the number of whiplash claims increased by 62%, a large number of which are believed by the insurance industry to be fraudulent or grossly exaggerated. During that time, the average cost of a bodily injury claim increased by 73%. Indeed, one of Enterprise Rent-A-Car’s largest ongoing costs is the impact of personal injury claims as a result of accidents involving its vehicles. It is its third highest expense after fleet acquisition and personnel costs. Its fleet liability costs have been significantly impacted in recent years by the huge increase in personal injury claims. The growth is driven by low-value claims for soft tissue injuries.
We have a compensation culture problem that has not been dealt with and is not shared by many other European countries. According to Frontier Economics’ whiplash report, whiplash claims in France comprise only 3% of personal injury claims, in comparison with 94% in the UK. In Germany, the number of bodily injury claims has dropped in line with the fall in road traffic accidents. In Norway, most minor injury claims are handled without the involvement of a solicitor. In Sweden, a de minimis threshold means that symptoms must appear and be assessed within three to four days of the accident.
What can we learn from those examples? Whiplash claims are not as significant in other European countries, due to the much more stringent conditions that must be met before a victim can successfully claim compensation for a whiplash injury. In April 2013, 70% of personal injury claims following road accidents in the UK were for whiplash, compared with 30% in France and Denmark, 31% in Spain, 35% in the Netherlands and 68% in Italy.
Certain European countries have implemented a variety of measures to reduce the frequency of claims. In France, the diagnosis of a whiplash claim requires objective proof, based on more rigorous medical testing. Claimants are made to pay for an initial report on the injury. France also requires medical practitioners diagnosing whiplash to be specially trained in bodily injury diagnosis. Its small claims limit, which is greater than the UK’s, allows more claims to be settled without solicitors. I am also sure that it would not allow medical examinations to take place in Pakistan via Skype.
In Germany, a severity scale is used to assess the extent of the disability caused to a claimant by their injury, and compensation is awarded accordingly. Emphasis is placed on having a high level of proof of the injury when a claim is made following a low-speed collision, and injuries are diagnosed using clear objective criteria. Finally, contingency fees are permitted only in cases where the claimant cannot afford to hire a lawyer, meaning that lawyers are less incentivised to pursue cases.
In Sweden, claims for whiplash injuries can be made only if symptoms appear and are assessed within three to four days of the road traffic accident. There is a table of predictable damages, as used in the UK for workplace personal injuries and in Norway, meaning that claims are limited to the type of injury caused, increasing the efficiency and transparency of the handling of claims. Spain also uses a table of predictable damages, and it requires medical practitioners diagnosing whiplash claims to have specific qualifications, like in France.
Some companies and organisations believe that establishing an objective test for whiplash is imperative in reaching the core of the current problems surrounding insurance fraud. That would filter exaggerated and fraudulent claims out of the claims process, ensuring a reduction in the number of whiplash claims. At the same time, it would ensure that those who have genuine claims were not prevented from making them.
I want to go a bit further than Europe and refer to a taskforce report from Quebec, which is in Canada, for those whose geography might be a bit rusty. It was produced in 2001 and provided an objective basis for diagnosing whiplash. It is a little bit old, but it has since been endorsed by several other Canadian provinces. The task force divided whiplash-associated disorders into five grades. At grade 0, no neck pain, stiffness or any physical signs are noticed. Grade 1 involves complaints of neck pain, stiffness or tenderness only, but no physical signs are noted by the examining physician. Grade 2 disorders indicate neck complaints, and the examining physician will find a decreased range of motion and point tenderness in the neck. Grade 3 encompasses neck complaints, plus neurological signs such as decreased deep tendon reflexes, weakness and sensory deficits. At grade 4, people may suffer neck complaints and fracture or dislocation, or injury to the spinal cord. As I said, severity scales are also used in Germany, where the number of bodily injury claims has dropped in line with the fall in road accidents.
I recognise that the Government of which I am a part have taken and are taking steps to address such matters. I welcome, for example, their insurance fraud taskforce, set up by my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) in his former role, and I look forward to it reporting next month. I also welcome the fact that Her Majesty’s Treasury and the Ministry of Justice have commissioned a fundamental review of the regulation of claims management companies following concerns that CMCs fuel speculative unmeritorious claims for compensation and create a significant social nuisance through unsolicited calls and texts, misleading marketing and high charges.
However—I will state this clearly for the record—CMCs are only the tip of this fraudulent iceberg. The dodgy solicitors and law firms, some from the other side of the world, need to be investigated and shamed too. The consultation on the taskforce’s review closed last Friday, and I hope that its report will focus on customer outcomes, with fewer nuisance calls, and on having a new, more stringent and encompassing regulator, like the Financial Conduct Authority, to ensure consistency across the entire financial world and its markets.
I commend the City of London police’s model. The insurance fraud enforcement department was established in January 2012, when insurance fraud was reported to be costing £2 billion and the coalition Government were reducing police force budgets. It is a specialist police unit operated by City of London police and funded by the Association of British Insurers. Since its establishment, IFED has been responsible for more than 1,300 arrests and interviews under police caution, 172 convictions, 256 police cautions and 150 people being on bail to court or police, and 325 investigations are in progress, with new cases coming in every week. An example of IFED’s work was the bringing to justice of a Keighley pair, who were jailed for creating an insurance web of deception worth thousands of pounds. I will briefly summarise their deception. Those two fraudsters created insurance policies for people who did not exist and then submitted 300 false personal injury referrals worth £167,000 for made-up road accidents. Both have been jailed for four and half years
However, loopholes remain in the current personal injury referral fee ban and inducement laws. The regulation should include the data marketing companies, claimant solicitors and law firms, which are well known and easily identifiable, that are under the radar of the current regulator. We should outlaw insurance payments for whiplash injuries before proper medical examinations have taken place and concrete proof is provided. The key issue in the personal injury market is the level of financial incentives that still exist, despite the referral fee ban and the reduction in legal costs. It is still far too easy to make a claim for whiplash, and the rewards for doing so in terms of damages and legal costs have created and maintained the adverse behaviours that have prevailed since 1999 when no win, no fee was introduced in the UK. The small claims track for personal injury claims has been left unchanged for 16 years despite all other track limits increasing.
There is simply too much cash in the personal injury system, which is borne out by the continuing menace of the nuisance calls that we and our constituents receive and the fraudulent activity of some CMCs, so-called data marketing companies and some solicitor and law firms. Recent increases, which are way above current inflation rates, in the Judicial College’s suggested awards for minor injuries will just make matters worse. We need a more stringent and proportionate legal and regulatory regime that addresses the financial incentives in personal injury, cuts out the nuisance calls and ensures that all benefiting parties are regulated.
Although I am grateful to the Government for the steps they have taken to date, and to the Minister for taking the time to be here today to respond to this important debate, further reform is needed to keep insurance premiums for law-abiding motorists down. In addition to introducing a minimum threshold for simple whiplash claims and replacing cash compensation with rehabilitation, I would like to see, as a minimum, a ban on nuisance calls and better regulation of those who farm data, such as some solicitors, law firms, CMCs and marketing companies; the removal of all referral fees from the claims process; a limit of £5,000 on personal injury claims; a reduction in the limitation period for bringing minor whiplash claims from three years to 12 months after the accident; and the introduction of a table of predictive damages linked to a percentage of severity or disability to cut down unnecessary legal arguments. I note that France, Spain and Norway have fixed damages tariffs for whiplash-type injuries.
Once again, I thank the Minister and other colleagues for attending the debate, and I urge her to do everything that she can to deal with and limit fraudulent personal injury claims and to support the law-abiding motorists of Lincoln and the 30 million-plus drivers across the country. I believe that I have managed to outline a fair few potential processes that could be undertaken to reduce this blot on our road transport landscape. I hope the Minister and our friends in Government and the good offices of Whitehall will feel the same to a great degree.
Andy Slaughter
That is an opportune intervention, because that was to be my next point.
Karl MᶜCartney
Before the hon. Gentleman moves on to that next point, may I stay with the previous point and say that I am no apologist for lawyers and solicitors or their firms, or for the ABI or any insurance company? In fact, I am no friend of any insurance company. I am here, as are many other hon. Members, because our constituents’ premiums rise every year. Unfortunately, no harm comes to insurance companies when premiums go up to pay for fraudulent claims, because they just pass on the costs in their turnover figures to the little people at the bottom of the scale. I see where the hon. Gentleman is coming from, but I was trying to say that we need to root out the lawyers, solicitors and claims management firms that use the moneys available in the system to feather their nest.
Andy Slaughter
I entirely accept what the hon. Gentleman says, but I am perhaps slightly more sceptical about insurance companies’ use of data. There is an idea that whenever premiums fall, as they have recently, that is because firms are cracking down on fraud, and when they rise it is because of an increase in fraud. The reality of finances, insurance companies’ activities and fraud is far more complicated. For many years, the figure for fraud that was often given was 7%. I do not know whether it has changed—I think the figure of 11% was quoted in the debate in relation to one insurer—but 7% is a high figure for fraud. Of course, that still means that insurance companies estimate that 93% of claims are non-fraudulent and come from genuine victims. However, I have heard the figure for the percentage of claims that are partly or wholly fraudulent put as low as 1%; I have also heard it put much higher than 7%.
Karl MᶜCartney
I need to clarify those statistics, because the percentages relate to identifiable fraud. That is not to say that all claims are fraudulent—far from it. None of us minds people who have really been injured receiving their just compensation. Fraud that is easily identifiable, which the insurance companies chase down, is at the level the hon. Gentleman is talking about, but that is not to say that the 93%, or any other residual percentage, represents bona fide claims. There might well be other fraudulent claims within those percentages.
Andy Slaughter
I do not want to argue about statistics endlessly, given that part of my argument is that the statistics are not robust. I am sure that the hon. Gentleman looked at the briefing for the debate by the Law Society, which is of course the professional body for solicitors. There are concerns that insurers use figures about levels of fraud as it suits them.
The point that concerns me is that the remedies that insurers resort to are, in some cases, more likely to encourage fraud. The principal one is third-party capture. There is an increasing trend for insurers to contact victims directly, offer a settlement and discourage them from contacting solicitors—and, if they have contacted them, to ask for information about that. They are not entitled to that information, but rather in the manner of claims managers who, as we have heard, use bullying behaviour to try to substantiate fraudulent claims or exaggerate claims, I am afraid insurance companies increasingly approach people in the same way, to try to get a quick, early settlement without medical reporting or professional advice. That may well minimise the value of the claim—I have no doubt that that is the intention—so someone who has a genuine and possibly quite serious injury may settle for a relatively trivial sum of money. However, it may also encourage fraud, because if there is no medical report or lawyer to act as an arbiter of whether a claim is genuine, the insurer, for commercial reasons, might settle a claim that could well be fraudulent. We should be worried about the growth of third-party capture, which would undoubtedly be massively encouraged if small claims were lifted disproportionately.
I am not saying that there is not bad practice by law firms, because there certainly is. I am talking not even about dubious practice, but about sharp practice in marketing skills. However, as one would expect, the overwhelming majority of solicitors act in a proper and professional manner. They have the ability, through the askCUE system, to determine whether someone who comes to them with a claim has claimed previously, and they are encouraged to make such checks to see if that is happening.
I sound a note of caution not because I think that anything raised by the hon. Member for Lincoln is inappropriate. It is just that, as in many things, there is a balance to strike. I was glad to hear the hon. Member for Lanark and Hamilton East speak about victims. Let us not forget them in this case. Political parties often speak up for victims of crime, but victims of accidents are also victims. I would not want to throw the baby out with the bathwater and say that genuine victims of accidents should not get access to justice or be properly remunerated.
I baulk at the constant refrain about a compensation culture. Time and time again it has been shown, including by the Government’s own experts, that no such culture exists in this country. On the contrary, recent consumer surveys have shown that only 17% of people say that their default position would be to seek compensation after receiving poor treatment. I do not think it is naturally British to think that, as a consequence of poor treatment or customer service or even an injury, the first thing one would do is immediately go to claim compensation.
Caroline Dinenage
As I say, the taskforce has been set up to look at all the issues, and I believe it may be considering that limit, but I will write to the hon. Gentleman with clarification if that is not correct.
The Chancellor announced proposals in the July Budget to introduce a cap on the charges that CMCs can apply to consumers. We are looking in particular at restricting bulk PPI claims to more proportionate levels and will consult on how that will work in practice later this year. A cap on charges will, we believe, help to reduce incentives for CMCs to collect marketing leads, resulting in a reduction in the number of speculative calls made.
I would like to draw Members’ attention briefly to other measures taken by the Government to tackle the issue of nuisance calls. In March 2014, the Government launched an action plan to tackle the problem, asking the consumer organisation Which? to lead a taskforce on consent and lead generation in the direct marketing industry. The taskforce made a number of recommendations, including giving the Information Commissioner’s Office powers to hold to account senior executives who fail to comply with the rules on marketing. The Government are currently considering those recommendations.
The Government have made it clear that it must be easier for the ICO to take action. The ICO no longer has to prove substantial damage or substantial distress caused by a company before action can be taken. Since 2011, it has had the power to issue penalty notices of up to £500,000, and in September 2015 it issued a penalty of £200,000 against a company that made more than 6 million automated calls to consumers—the highest penalty ever issued for nuisance calls. The ICO has also issued a penalty of £75,000 against an organisation that claimed to offer a nuisance call blocking service but was instead making unsolicited live marketing calls to members of the public—the mind boggles. The ICO continues to take its enforcement responsibilities seriously and has 66 cases currently under investigation.
The Government are also exploring options to provide call-blocking devices to vulnerable customers, and we will consult shortly on legislation to require all direct marketing callers to identify themselves. That will enable consumers to determine who is calling and to report unwanted calls to the regulator. I ought to make it clear that the Government have not ruled out further reform to this market.
Karl MᶜCartney
Before my hon. Friend the Minister finishes her remarks, may I say that I welcome the courteous and informative comments she and everyone else who has taken part in the debate have made, including even my hon. Friend the Member for Newark (Robert Jenrick)? He does not to get to say anything in his role as Parliamentary Private Secretary, but it was good to see him here, providing very useful information.
The Minister mentioned that some of these companies are fined. Unfortunately, the directors behind the companies often have what are known as “phoenix companies” waiting in the wings. The Government need to take direct action on the individuals who are at fault for carrying out these pernicious acts with regard to cold calling. I make that plea as a final comment in this debate.
Caroline Dinenage
That is a valid point. These individuals need to be named and shamed for what they are and, indeed, what they are doing; my hon. Friend is absolutely right.
We have not ruled out further reforms to this market. I hope I have reassured hon. Members today that the Government take this subject very seriously. We remain committed to continuing the reform process to the benefit of all and we want to work with all stakeholders to achieve that.
Question put and agreed to.
Resolved,
That this House has considered personal injury fraud.
Assisted Dying (No. 2) Bill
Karl McCartney Excerpts(9 years, 3 months ago)
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Karl MᶜCartney (Lincoln) (Con)
I should like to inform the House that I am the president of the Lincolnshire branch of the Motor Neurone Disease Association. I commend the hon. Member for Central Ayrshire (Dr Whitford) for her moving speech, and all those who have spoken this morning. I also commend the hon. Member for Wolverhampton South West (Rob Marris) for choosing an emotive issue for his private Member’s Bill. It is no small achievement to have populated the House so well on a Friday, but my praise for him stops there.
Many of us fear that the Bill will induce uncertainty and suspicion and have the potential to fracture the doctor-patient relationship at the most critical time, when patients with the most severe illnesses are at their most vulnerable and in desperate need of sympathetic encouragement. Further, assisted dying would devalue any extra development or funding for advances in palliative care, reducing the quality of care that those wishing to receive it could and should receive at the end of their life.
Rev. Ian Silk of St George’s church in Swallowbeck in my constituency is a good friend of the Bishop of Carlisle, who is leading on this issue in the other House. The bishop believes that a change in the law would come at the cost of placing many thousands of vulnerable people at risk, and he has stated:
“Terminally ill people deserve to be surrounded with love, compassion and care, not called to make a choice between dying prematurely and being a burden. The only effective safeguard against this pressure is to keep the law as it is.”
Bob Stewart (Beckenham) (Con)
I have one comment to make to my hon. Friend. If there is just one mistake, and one person dies who should not have done, this House will have failed in its duty.
Karl MᶜCartney
I thank my hon. and gallant Friend for that intervention.
Many hon. Members consider the Bill to be misguided and dangerous. Baroness Campbell has observed that for the Bill
“to pass into law would be a triumph of despair over hope. It says, don’t try to make things better—that’s just too difficult and, anyway, would be futile. It is far better to die now. It will be better for you, your family and society. You are defined by your diagnosis, which is also your death warrant. Society doesn’t want you around any more.”
Like the good baroness, I do not want to live in that kind of society, and I hope that the majority of Members do not want to do so either.
Oral Answers to Questions
Karl McCartney Excerpts(9 years, 3 months ago)
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Pauline Latham (Mid Derbyshire) (Con)
7. What steps he is taking to improve the provision of education in prisons; and if he will make a statement.
Karl MᶜCartney (Lincoln) (Con)
8. What steps he is taking to improve the provision of education in prisons; and if he will make a statement.
Margaret Greenwood (Wirral West) (Lab)
17. What recent steps he has taken to improve the provision of education in prisons; and if he will make a statement.
Michael Gove
My hon. Friend makes a good point. One aspect of Dame Sally’s critically important review will cover engagement with employers. I am delighted that the chief executive of Timpson, one of the most inspirational organisations employing ex-offenders, is part of the team that will help Dame Sally to ensure that education, employability and rehabilitation are all operating together.
Karl MᶜCartney
I thank my right hon. Friend for his answers so far. Does he agree that the current provision of education in prisons, which seems to centre on the awarding of certificates, is insufficient and that we need to move towards a system in which the curriculum is written jointly with employers and focused on employment? Will he therefore consider connecting education in Her Majesty’s prisons to Lord Baker’s career colleges initiative?
Michael Gove
My hon. Friend is absolutely right. Offenders often feel that they have to complete courses in order to secure release, and that those courses are simply boxes to be ticked and do not contribute to their employability. He is right to suggest that the visionary work carried out by Lord Baker to improve the quality of vocational education more broadly can help to inform what we give to offenders to give them a second chance.
Oral Answers to Questions
Karl McCartney Excerpts(9 years, 10 months ago)
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Karl MᶜCartney (Lincoln) (Con)
18. What steps the Government are taking to stop the use of mobile phones in prisons.
The Parliamentary Under-Secretary of State for Justice (Andrew Selous)
We take this problem very seriously, stopping many mobile phones getting into prisons and finding those that do get in. We search prisoners, staff and visitors, we use X-ray and body scanners, CCTV and closed visits, and we deploy mobile phone blockers. We have also amended the Serious Crime Bill to enable the National Offender Management Service to instruct mobile phone companies to disconnect any phone that is found to be used within a prison. This Government have also increased the punishment for possessing an unauthorised mobile phone in prison.
Karl MᶜCartney
I thank the Minister for that answer. Ministry of Justice figures reveal that there have been 7,451 seizures of mobile phones and SIM cards in 2013 across the UK. Is there a difference in detection rates between establishments run by Her Majesty’s Prison Service and those run by private contractors, and if so, what can that be put down to?
Andrew Selous
I am not aware of any difference in the rates of detection between different prisons, but my hon. Friend is right to draw attention to this issue. We want to protect victims from being terrorised by prisoners from within prisons, and we also want to stop prisoners carrying on organising crimes from within prisons. That is why we take this issue so seriously. We are using blockers and we are now disconnecting. We will continue to focus on the matter.
Oral Answers to Questions
Karl McCartney Excerpts(10 years ago)
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Karl MᶜCartney (Lincoln) (Con)
3. What recent steps he has taken to prevent fraudulent whiplash claims.
Michael Fabricant (Lichfield) (Con)
9. What recent steps he has taken to prevent fraudulent whiplash claims; and if he will make a statement.
The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)
The Government are taking forward a whiplash reform programme that will deter unnecessary, exaggerated or speculative claims. Reforms to control the costs of claims were implemented on 1 October, and on 2 December we announced further plans to have independence and quality safeguards in the system for obtaining expert evidence.
Karl MᶜCartney
What evidence does the Minister have to demonstrate that his measures have been effective in cracking down on fraudulent whiplash claims, as it would seem that, as a nation, we are happy to allow both the profits of insurance companies and our reputation for having the weakest necks in the world to go unchallenged?
Mr Vara
This Government have made and continue to make major changes to deter fraudsters and reduce the number and cost of whiplash claims. We have already seen an impact from these reforms and industry data show that they have contributed to a 14% reduction in premiums since February 2012.
Simon Hughes
Kidnap and child abduction can have devastating effects on victims and their families. It is vital that the law reflects the gravity of the offences, and that those who commit them are punished accordingly. I pay tribute to the right hon. Gentleman and his colleagues who formed a group in this House to argue for a change in the law. In the past, people could be punished for taking their children out of the country, but not for keeping them illegally out of the country rather than bringing them home. The coalition Government asked the Law Commission to consider the issue. It has reported back and recommended a change to the Child Abduction Act 1984. We are looking at that recommendation actively and I hope that we will be able to make progress in this Parliament.
Karl MᶜCartney (Lincoln) (Con)
T6. What steps can my right hon. Friend the Secretary of State and his Department take to ensure that young people do not regard vehicle insurance as an optional extra, as is the case now due to the monopoly and cartel that is operated by the insurance companies?
Mike Penning
While I was a Transport Minister, it was my honour to bring forward the continuous insurance legislation, which made it compulsory for all vehicles that are registered on the road to have insurance. We will continue to look at how we can stamp down on the hard core of people who do not have insurance, because they are a danger not only to themselves, but to others.