Caroline Jordan asks key players in claims what they would want the forthcoming Compensation Bill to include
Next month, the government is set to reveal the Compensation Bill, which is says is aimed at "tackling the compensation culture, resisting invalid claims but improving the system for those who have a valid claim".
It is expected this will include clarification of the existing common law on negligence to "make clear that there is no liability in negligence for untoward incidents that could not be avoided by taking reasonable care or exercising reasonable skill".
It is also expected to deal with the regulation of claims management companies.
Insurance Times asked a number of interested parties what they would like to see included in the Bill.
Claims director, AXA
I'm confident we're going to see some positive material in the Bill, particularly around the regulation of claims farmers and transparency of fees.
We've been in discussions with the Claims Standards Council and it's clear that it is ahead of the field, but it doesn't represent the whole market by any means.
Another area, which will be interesting, is on the definition of negligence. It's common sense to say that just because an accident happens, it is not necessarily that someone has been negligent. Just on a personal note, hanging baskets have been removed in Bury St Edmunds where I live and I heard that conker trees have been chopped down in Norwich - this is just crazy and many people would like to see an end to these types of actions.
The issue of transparency is important and nowhere least than when referral fees are being charged. We would also like to see the limit in small claims cases raised to £5,000 - although this can be done outside of the Bill - and an extension of the fixed fees regime.
Rehabilitation should be an essential part of the Bill - compensating people means putting them back in the position they were in before.
And, I would like to see an end to the various tactics lawyers use to delay claims and so add to their own fees - these are often not proportional to the claim. A further matter, which needs consideration, is the NHS Redress Bill, which is currently in the House of Lords.
Director of ATE services, Abbey Legal Protection
Top of my list has to be the regulation of claims farmers. Although the Claims Standards Council has been set up, I would want to see this market regulated by an independent regulator set up specifically for this purpose. In the current marketplace, I can think of nobody obvious to take this over. I don't think that the FSA would be able to take on this role, although it is already covering those who are ancillary to the insurance business.
But, the FSA would have some relevance for covering the wider market under its Treating Customers Fairly rules. It has been suggested that the Law Society could regulate claims farmers, but many would argue that it would not be sufficiently independent.
The Bill is understood to be looking at the definition of negligence and clarifying personal injury law, but as far as most personal injury lawyers are concerned, it is already quite clear.
Raising the small claims limit to £5,000 could easily happen. Currently, around 70% of claims are below £5,000 - but to many people, a claim for £2,000 is still a lot of money. Many individuals could not afford to get legal help and assistance in obtaining the right material and legal reports. They would be unfairly pitted against insurance company lawyers. You need equality of arms.
[The Better Regulation Task Force proposed raising the small claims limit in personal injury cases from £1,000 to £5,000. While a number of insurers favour this, it would, according to many personal injury lawyers deny thousands of injured people the right to legal representation.
Research by public sector union Unison last week revealed that 64% of respondents received awards of between £2,000 and £5,000.]
Allan Gore QC
President of the Association of Personal Injury Lawyers
We know that there are only going to be two things in it. The first is regulation of the activities of claims management companies, and this is something that we have long advocated. It is in the interests of injured peoplewith a claim to go directly to a competent accredited specialist solicitor.
If people want to deal via an intermediary, that is, a claims management company, then we believe that their activities and their conduct should be subject to the same scrupulous professional and conduct regulation that legal professionals providing legal services are subjected to.
As with all legislation, the devil is in the detail and we will have to see what sort of regulatory structures are suggested by government.
The other issue that the government flagged in the Queen's speech for inclusion in the Bill is a redefinition of the tort of negligence. We question the desirability or the need for such a statutory definition and we can see that it might in fact cause more problems than it addresses. The common law that defines the border line between where a claim can be brought and where a claim cannot be brought is not something that should be fixed in stone, but should be flexible and capable of moving with the times, as social attitudes change.
Claims director, Allianz Cornhill
I would like to see more predictability in costs, and the raising of the fast track claims limit as, in this band, legal costs are small. I would also like to see lawyers being used only in cases where it is valuable for them to be used. Why pay a lawyer if we [insurers] can offer a fair settlement?
It is great to have a mood in government to change things. We must seize the opportunity. IT