UK is not embracing US-style claims culture

Liability insurers are obstructing access to justice and the growth of the compensation culture could be an illusion, it was claimed.

The Accident Group (TAG) chairman Mark Langford referred to research by Datamonitor which, he said, showed the UK was not developing a US-style claims culture.

The number of personal injury claims from general insurers in 2001-2002 fell by 7.4% to 688,691 from 736,899 in the previous year as a result of falling disease claims and the number of accident claims increased by just 0.3%.

Langford said that the facts contradicted "the media hype, which suggests that the UK is embracing an American-style compensation culture".

The falling number of claims reflected "the obstructive response by the liability insurers in allowing access to justice".

He told Insurance Times: "It's a media myth that this country has a US-style compensation culture."

The research by Datamonitor found that it was the spiralling cost of claims forcing insurers to increase premiums.

Langford said TAG was providing an alternative to legal aid and denied the business was profiteering, saying it had a profit margin of about £100 a case which he said was fair for the service provided.

TAG's turnover increased by 179% to £243m for the year ended 31 August from £87m in 2001.

Pre-tax profits were £17.8m, an increase from a loss of £388,000 last year.

TAG arranged insurance for 178,000 customers during the period, representing a market share of about 25%, it said.

Langford denied that the current English v Clipson litigation would harm the company.

The case could scupper the business plans of companies that use intermediaries to provide legal services to customers.

But Langford said: "We don't need to have any contingency plans because the advice we've received is that the judgment will go in our favour."