06 Sep, 2011

Law Society slams insurance industry report as self serving and offensive to victims of negligence


Claims the country is in the grip of a ‘compensation culture’ are a myth, the Law Society said yesterday (Sept 5).


The Society is responding to a report from the ABI (Association of British Insurers) that said Britain has a ‘have a go’ compensation culture.


Law Society chief executive Desmond Hudson (pictured) said today’s report by the ABI pumps up the myth about a so-called ‘compensation culture’ and is entirely self serving to the insurance industry.


“The claim that there are ‘ambulance chasing lawyers’ manipulating the system is utterly unpersuasive. If this is happening why are the insurers not acting and challenging these cases in the Courts?  It is nonsense and the ABI should know better. “


“Lawyers exist to ensure that people get their just compensation and are not manipulated by the insurance industry. Does anyone seriously believe that insurers would pay out claims unnecessarily? “


“The law in this country sees to it that those who are harmed by the negligence of others are entitled to fair compensation. They are not entitled to make a profit from their loss. This is just and it is fair. It is how reasonable insurers seek to settle claims.


“Our concern is that the proposals will mean that many people who suffer loss and  damage will not be able to get compensation and the insurance industry will not have to pay anything out.  You can see why the insurance industry might support such proposals.”


“The losers will be those victims of poor care in hospitals or negligent employers who need and deserve compensation for often serious and debilitating injuries. This is far from a ‘have a go’ culture.”


Only a year ago Lord Young in his report to the Prime Minister on these issues found that there was no such thing as a compensation culture. He found instead that there was a perception of such a culture – often fuelled by misreporting and assertion.


Given that the report is so recent, it is bizarre that the ABI should  fuel this misreporting – and spread obfuscation and confusion – on serious issues of public debate.


“It is good to see that the ABI recognises that referral fees should be abolished  – a position held by the Law Society- but the fact is that the insurance industry itself has been taking such fees by selling these cases to the highest bidder and has been profiting from accidents as a result.”


“While we agree with the ABI’s report that there can always be improvements to the system – and we believe in particular that claims management companies have no useful role to play in the system  –  the current government proposals in the Legal Aid and Punishment of Offenders Bill will  mean that many victims will lose their opportunity to gain the compensation they deserve.  As a result many will end up on state benefits, causing a drain on the public purse rather than claims against  insurers,” added Mr Hudson.


“It is also wrong to suggest that people do not need lawyers. Without an independent lawyer representing them, victims are at the mercy of insurers who have every incentive to pay as little as possible, irrespective of the real needs and rights of the victim.  Again, it is easy to see why it is in the interests of the insurance industry to offer settlement to claimants before they have legal advise and to seek to get rid of lawyers  who help people get their rights.


“Where there are fraudulent or  unmeritorious claims it is for the insurers to properly investigate any such matters and clamping down on legal fees will not solve this problem. The Law Society repeats its offer to work with the ABI and Insurers to fight fraud.

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