Personal Injury Claims: Motor Vehicle Incidents

Viscount Hailsham Excerpts

Wednesday 1st March 2017 Lords Chamber

[Lord Keen of Elie]

My Lords, there are two distinct issues to be addressed in this context. The reforms with regard to whiplash will, on the basis of completed impact assessments, result in very considerable savings in motor insurance premiums of the order of £1 billion. It is estimated by the industry that this will result in an average reduction in motor insurance premiums of about £40. The major operators within the motor insurance industry have undertaken to pass those savings on to the motorist, the consumer. However, the changes in the discount rate will inevitably impact on the cost of insurance, including motor insurance, and that will give rise to certain increases. One may offset the other, but I add that the Lord Chancellor indicated when announcing the change to the discount rate that this will be the subject of consideration and indeed a consultation, which is due to commence no later than Easter.

[Viscount Hailsham (Con)]

My Lords, I begin with a declaration of interest: I do not now practise as a personal injury lawyer but I have done in the past. Does my noble and learned friend recognise that the reduction in the Ogden tables to a discount rate of minus 0.75 will inflate the damages that are recoverable in personal injury cases to an extravagant and unconscionable extent, which is bound to inflate the numbers of fraudulent or unjustified personal injury cases in motor claims to the prejudice of all drivers? That being so, may I welcome the fact that these proposals are going to be looked at again, I hope constructively?

[Lord Keen of Elie]

My Lords, the way in which the discount rate is calculated will be examined with some degree of urgency. However, I do not accept that the discount rate will result in the inflation of the value of damages claims. It was designed originally to ensure that those claims would be properly calculated so that those who suffer life-changing injuries are properly compensated for the future.