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Insurance Fraud Taskforce went ‘far beyond its remit’, says APIL

Defendant and claimant groups at odds over PI proposals, as the SRA is told to 'name and shame' insurance fraudsters

21 January 2016

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Measures aimed at tackling insurance fraud and reducing the cost of motor premiums for 'honest' consumers has received a mixed response from lawyers.

The government's Insurance Fraud Taskforce (IFT) final report has addressed the need to stop 'fictitious' or 'exaggerated' claims costing the insurance industry over £3bn.

Among a range of recommendations, the report stated that where claims are brought for minor injuries six months after the accident, the recoverable costs should be reduced by 50 per cent.

Such claims would also be assigned to the small claims track as opposed to the fast track, it said.

In November the government announced plans to address whiplash claims, which currently cost the UK around £2bn, and add £90 to the price of the average car insurance policy.

The proposals include an increase in the small claims court limit from £1,000 to £5,000 and scrapping general damages for 'minor' whiplash injuries.

The taskforce further recommended introducing a system of predictable damages for soft tissue injuries and a rebuttable evidential presumption that no injury was suffered where claims are lodged after a set time since the accident.

Jonathan Wheeler, president of the Association Personal Injury Lawyers (APIL), said the taskforce went 'far beyond its remit'.

'Since the PI sub-group concluded its work in July 2015, I attended stakeholder meetings which left me with little confidence in the taskforce's report being a balanced document, reflecting the views of both claimant and defendant consultees. This fear has been borne out in my reading of this final report,' he said.

'The work of the taskforce appears to have been hijacked by the agenda of the insurance industry and this government in its plans to do away with the rights of the genuinely injured to compensation.'

However, Duncan Rutter, president of the Forum of Insurance Lawyers (FOIL), welcomed the IFT's recommendations, particularly the aim of encouraging the public to regard insurance fraud as a criminal activity.

'We hope these recommendations will gain widespread support, including from organisations supporting claimants and that going forward both claimant and defendant bodies can work together to tackle dishonest claims,' he added.

'Name and shame'

Elsewhere in the report, the Solicitors Regulation Authority (SRA) was instructed to take a tougher approach in combatting fraud.

The regulator was told to 'name and shame' those solicitors involved in fraudulent behaviour and have a clear and appropriate focus to combating financial crime through its existing powers.

The government was also advised to consider strengthening the fining powers of the SRA for fraudulent or corrupt activity and look into reviewing the standard of proof used in cases put before the Solicitors Disciplinary Tribunal (SDT).

Paul Philip, SRA chief executive, agreed that adopting the taskforce's submissions to adopt the civil standard of proof 'has to be the right way forward' and reviewing its fining powers would make the system 'more efficient and effective'.

'We have made good progress on combating financial crime, not least in connection with the Home Office's professional enablers scheme, along with our own anti money laundering work,' he said.

'But we know we have more to do and the report will help us with that. We will also be carrying out a comprehensive review of the personal injury market this year and that will contribute further to our understanding of this area of the market.'

Data from AA Insurance, and reported in the Telegraph, reveal that the average cost of insuring a driver has risen by 20 per cent in the last year.

The increase has been blamed on George Osborne's 'insurance premium tax', introduced in July's emergency budget, and an alleged rise in whiplash claims, which 'haunt' the industry, according to Michael Lloyd, director of AA Insurance.

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Risk & Compliance Road traffic