Personal Injury Claims: Motor Vehicle Incidents

Lord Beecham Excerpts

Wednesday 1st March 2017 Lords Chamber

[Lord Keen of Elie]

My Lords, I quite understand the point that has been made. That is why we have included in the proposed legislation a ban on insurers making offers to settle such claims without medical evidence. We have of course addressed the issue of medical reports through the MedCo scheme.

[Lord Beecham (Lab)]

My Lords, I refer to my interest as an unpaid consultant in the firm of solicitors in which I was senior partner. The increase in the small claims limit for whiplash cases is likely to lead to greater activity by claims management companies, which will take a substantial cut from any damages. Will the Government take steps to control this parasitic industry? This week, the Lord Chancellor announced changes to the way in which damages for personal injuries are calculated. Such damages are estimated to cost the National Health Service, which recovers the costs of treatment for motor accident claims, an estimated £1 billion a year, and they increase insurance premiums. Is this not a classic example of a ministerial car crash?

[Lord Keen of Elie]

No, my Lords, this is not a ministerial car crash. I remind the noble Lord that the increase to which he refers arises as a result of the application of the discount rate introduced by the Damages Act 1996, which was last reviewed in 2001. The object of the change in the discount rate is to ensure that those who suffer catastrophic and life-changing injuries are fully and properly compensated for those injuries by reference to the damages calculation for their future care and support.