May 2021 blog for Insurance Claims

The recent parliamentary debates on whiplash reform initially seemed to hold a glimmer of hope that sense could still be seen and the misguided decisions of the past few years held to account under scrutiny and a better path found. Sadly not.

When we think back, the purpose of these reforms in the first place was to curtail rising motor insurance policy costs. We were told that whiplash claims were costing in the region of £2bn a year and that introducing new legislation would curb false claim numbers, saving every motorist £35 a year. A sum the insurance industry readily agreed they would be happy to pass on to consumers, while rubbing their hands behind their backs.

The Financial Conduct Authority (FCA) will, theoretically, be monitoring insurers’ progress on this. Yet the new legislation kicks in on 31 May this year, and insurers have until April 2024 to provide the FCA with the data which will show whether consumers are indeed reaping the benefits of this new system. -Why three years? Why does the FCA not think that annual data from the outset will start to show a trend? Is the hope that three years down the line those of us who have fought tirelessly against this reform will quietly forget about £35?

Last week, Parliamentary Under-Secretary of State for Justice, Alex Chalk said that mechanisms would be put in place to allow both the government and the regulator to hold insurers’ “feet to the fire”. Fighting talk but we are yet to hear what these mechanisms may look like. However, in a demonstration of common sense, which has been sorely missing from reform debate to date, Chalk did at least let us know that the government plans to undertake an analysis of available data after a year to see whether an early review is appropriate.

This is heartening news and I and many others fully support Alex Chalk’s endeavours to ensure that insurers are held to account on this front. But I wonder who is holding the Ministry of Justice to account? Despite refusing to rollout a public information campaign, we have finally had sight of the much-awaited user-guide. A snappy 64-page user guide to the new portal. How many claimants do they think will sift through 64 pages to guide them through their claim? This was followed hot on the heels by the news that that the portal actually went down during testing. Not a great sign of things to come, with just a few weeks to go before launch.

The coming months will show whether the government has failed the most vulnerable by creating a new small claims system. The reality is, it isn’t about £35. Certainly, consumers should benefit from any savings and we will be monitoring and eagerly awaiting updates from the industry highlighting how they are now better able to pass on savings to their customers. But more than £35 it’s the vulnerable injured people at home who, unable, to navigate the online portal have ceased to make a claim and are instead suffering in silence.


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