Civil Liability Bill [Lords]

Vicky Ford Excerpts

2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons
Tuesday 4th September 2018 Commons Chamber

[Mr Gauke]

This must be put in the context of a package of measures we are taking that seek to address the significant problem that exists, which I have sought to sketch out and which other hon. Members have highlighted: the very considerable cost that motorists face in insurance premiums as a consequence of whiplash claims, a number of which are clearly not genuine. Given that the number of road traffic accidents is falling yet the number of claims is going up, it is right that we take action.

[Vicky Ford (Chelmsford) (Con)]

Four years ago, my family and I had a large car crash. Ever since then, I have been pestered, almost continually, by unwanted phone calls from people trying to encourage me to fraudulently claim for whiplash. Will this Bill stop that?

[Mr Gauke]

In combination with the other measures that we are taking, I think that we are really able to address the problem that my hon. Friend has so eloquently highlighted and that she has personal experience of. What she has highlighted is that we do have a problem and that we do need to take action, and that is exactly what this Bill does.

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[Richard Burgon]

The evidence does not bear that out. Proven fraudulent whiplash claims amount to 0.25%. To hear some Conservative MPs, we would think that the majority of whiplash claims were fraudulent, when only 0.25% have been shown to be. It is not justice if the honest vast majority are penalised because of a tiny dishonest minority. That is no way to reform things or make the law.

[Vicky Ford]

Will the hon. Gentleman give way?

[Richard Burgon]

I have to make some progress, I am afraid.

The Government have said that they will drop vulnerable road users from their reforms. They should indeed do so, but they should also concede that the inclusion of people injured at work is equally unjustified.

It is not only we who oppose these measures. The Justice Committee concluded that

“increasing the small claims limit for personal injury creates significant access to justice concerns.”

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[Richard Burgon]

That is a very important point indeed. All too often, the human experiences of the individuals who have been injured or discriminated against at work are forgotten. I thank my hon. Friend for bringing that perspective to bear.

[Vicky Ford]

I agree that people who are injured should receive fair compensation, but when 47p of every pound paid out is going to lawyers, does the hon. Gentleman not agree that unless we reform this, we risk finding that young drivers and vulnerable people cannot get affordable insurance?

[Richard Burgon]

Right across the justice sector, the real targets of the Conservatives’ reforms have not been lawyers, but ordinary people. That is the reality.

I will move on to the measures that the Government have included in the Bill. We are very concerned by the tariff system, which would fix the amount of compensation in so-called minor whiplash claims. I will come on to the fraudulent claims later and the measures—or lack of measures—to tackle that in the Bill. However, the reality is that even if the Government’s case about the scale of that problem were correct—I note that the Commons Library says clearly that it is “not universally accepted”—the way the Government are seeking to resolve this would still be wrong. The Government’s main proposal to tackle fraud is to penalise genuine whiplash victims. The proposed new levels of compensation under the tariff system are significantly lower than current average compensation payments. Surely that is unfair.

For example, compensation for an injury lasting up to six months would fall to a fixed £470, down from a current average of £l,750. For an injury lasting 10 to 12 months, compensation would be £1,250, down from a current average of £3,100. For an injury lasting 16 to 18 months, it is £2,790, down from £3,950. Those are considerable drops in compensation for injured people. This will make a real difference to working people and their families in the worst possible way. It is a crude and cruel policy that penalises genuine victims. Who really stands to gain? It will be insurers who will be excused from paying full compensation, even where negligence has occurred.

There was widespread discontent among legal experts in the Lords regarding this tariff approach. Lord Woolf, former Lord Chief Justice of England and Wales, said:

“it results in injustice and it is known to result in injustice. Indeed, no one can deny that it results in injustice.”—[Official Report, House of Lords, 12 June 2018; Vol. 791, c. 1620.]

Lord Judge, another former Lord Chief Justice of England and Wales, said:

“We cannot have dishonesty informing the way in which those who have suffered genuine injuries are dealt with. That is simply not justice.”—[Official Report, House of Lords, 12 June 2018; Vol. 791, c. 1600.]

In a very powerful intervention, Baroness Berridge said:

“I have met many a claimant for whom the difference in damages now proposed by the introduction of the tariff…is a significant matter for many peoples incomes up and down this country. I cannot have it portrayed that this might not make a great deal of difference to many ordinary people in the country…in this Bill, the intended consequence…will be to affect that group of people.”—[Official Report, House of Lords, 12 June 2018; Vol. 791, c. 1611.]

Baroness Berridge is of course a Conservative party peer.

One key point in our opposition is the slashing of compensation for genuine claimants. Another is that it will be the Lord Chancellor setting tariff levels, which risk becoming a political football or, rather, being reduced ever further by the powerful insurance industry lobby. Tariffs are a rather blunt instrument; people should simply get the correct compensation for the specific injuries they have suffered. As former Lord Chief Justice Lord Woolf says, establishing the correct level of damages is

“a highly complex process of a judicial nature”—[Official Report, House of Lords, 12 June 2018; Vol. 791, c. 1593.]—,

and damages might vary from case to case, making the fixed tariff inappropriate. We will therefore propose amendments to delete the power for the Lord Chancellor to set the tariff.

If the Government are set on going ahead with tariffs, the judiciary should be involved in setting them. The Judicial College currently issues guidelines with levels of damages for different injuries. Lord Woolf stated:

“they have been hugely important in the resolution of personal injury claims.”—[Official Report, House of Lords, 12 June 2018; Vol. 791, c. 1594-95.]

I hope that those across this House who profess to defend the independence of the judiciary would agree that tariffs should be determined by the Judicial College and not by political actors, of whatever political persuasion. We will be pursuing amendments to that effect.

That is not an end to the powers that the Lord Chancellor is accumulating. This Bill even allows him to define whiplash. Surely, it would be more appropriate for the definition to be set by medical experts rather than politicians, especially when an incorrect definition could mean people with injuries much more serious than whiplash having them classified as such.

The Government’s justification for genuine claimants suffering substantial reductions in damages is reducing the incidence of fraudulent claims. The Government give the impression that it is an uncontested point that fraud is at the levels that the insurers claim, but that is contested. That is not to say that there are not fraudulent cases—of course a small minority of cases are fraudulent—but we need to properly understand the problem if we are going to have genuine solutions.

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[Vicky Ford (Chelmsford) (Con)]

A robust and fair system for motor insurance is key to making sure that drivers, passengers, pedestrians and, indeed, all road users are protected. Before I talk about the Bill, may I give a shout out to all road users? It is our first day back after recess and I am sure that everyone has their highlights. One of mine was rising to the challenge laid down by my local riding school in Chelmsford to get up on a horse again after many years and experience what it is like to be in the saddle on Essex roads. Most drivers are great, but some do pass too fast. I pay tribute to the British Horse Society, Cycling UK, British Cycling and the charity Brake for all the work they do to minimise the number of accidents on our roads.

When there is an accident, it is absolutely right that people who are injured are fairly compensated for their injuries and that compensation money must get to those affected. I have learned, however, that for every £1 paid in compensation, 47p is spent on lawyers, so I think things have got out of kilter. Indeed, nine out of 10 people believe that the legal cost of settling a motor insurance claim is too high. I believe that their concerns are justified, because when the costs go up, it is the consumer who bears the price. Many people, especially young people, find that motor insurance premiums are now unaffordable. They simply cannot afford to drive.

Of course, a lot of factors affect the costs of a claim, one of which is the discount rate. When the discount rate goes down, the compensation level in today’s money goes up, so that rate must be fair. There is plenty of evidence that the UK rate is artificially low. It does not reflect the actual way in which compensation money is invested. At less than 1%, the rate in Britain is lower than that in all other European and common law countries, and it is right that the Bill reconsiders it.

I welcome the Bill’s work to reform whiplash claims, especially in ensuring that any future whiplash claims must be based on medical evidence. Whiplash can be a crippling injury and I repeat that it is absolutely right that those who are injured must be fairly compensated, but there is plenty of evidence that something is going wrong. There has been a huge rise in claims—a 40% increase—despite the fact that the number of accidents is down by 30%.

My personal experience tells me that something deeply sinister is going on. Four years ago, on the way to our summer holiday, my family and I were involved in a terrible accident. We were going across the country, from East Anglia to Anglesey, to catch the ferry from Wales, when we found ourselves going along the M6 upside down at 70 mph. How we stepped out of that car is a miracle. The hours that followed were a complete blur. There were ambulances and the entire family were laid up on trolleys in A&E. But none of us had whiplash. We were so lucky. But sometime during those hours I must have been asked whether I was prepared for my phone number to be shared. Ever since then, I have been continually harassed with phone calls from people wanting me to put in claims for accidents that did not happen. Those phone calls are not only morally wrong; they are deeply insensitive and upsetting. Every time the phone goes, one relives the entire experience. That has got to stop.

Some Opposition Members have said that we should just outlaw those calls, but I am not sure that that is the right way forward. There are genuine whiplash claimants who need to be able to put in a genuine claim. Instead, it would be better to put a handbrake on the system and put in the check that a claim for whiplash cannot be made unless there is genuine medical evidence that is aligned with the claim. That is what the Bill will do, which is why I am so glad to support it and the work that the Government are doing tonight.