Greater efforts should be made to crack down on uninsured motorists. In the 55 years since its inception, the Motor Insurers' Bureau (MIB) has paid out £1.2bn in compensation. Last year, the figure was £213m – one-sixth of the total. And the figure is set to soar.
The volume of work is growing, not only with legal changes coming from the UK courts, but also through European Union (EU) directives, says MIB technical director Roger Snook.
But the biggest impact will be the introduction of a new database that will, at long last, mean uninsured drivers can be tracked down by checking car registration details against insurers' records. This database is run by an independent subsidiary of the MIB, the Motor Insurers' Information Centre, and comes on-stream later this month.
Claims involving uninsured motorists are rising 5% a year. Snook says the MIB's main concern is not whether there is a genuine claim, but the cost of the mechanism by which the compensation is received by the victim.
In dealing directly with the MIB, he says, the cost is the bureau's time and fees of experts. He adds: “If you employ a lawyer or accident management company, the cost of that compensation increases greatly.
“Such services are entirely appropriate on many occasions, but sometimes legal intervention is less satisfactory. Accident management companies work on a percentage basis and, on average, 20% to 25% of everything we spend goes to the companies that manage the passage of the compensation from us to the victim – and that is an awful lot of money.”
Snook, however, is relaxed about these third-party companies, including the “ambulance chasers” that advertise on TV, because, he argues, a claimant may not understand the basis on which compensation is calculated or offered, or understand the law that applies. But in some cases, the process is simple and shouldn't be expensive.
TV advertising firms can generate unhappy customers. Snook says: “The victim can be anywhere in the country. There may be no face-to-face meeting and, dependent on who the accident management company is, they will pass the case to a lawyer who may be in an entirely different part of the country.
“What makes our life difficult is that the victim has no personal contact with anybody. That makes them more difficult to deal with and they are more likely to be unhappy with the result.”
Here's the tool, now use it
The new database itself is not enough to tackle uninsured motorists. Snook says: “The database will make it easy to determine whether a vehicle is insured or not and will go a considerable way to make sure motorists are insured, provided the police and Crown Prosecution Service make full use of it.
“It is only if people are caught and prosecuted that they will realise it is not worth the game. The insurance industry has done its bit by building the tool. After that, it is down to the Home Office to ensure the tool is used.”
He warns: “The only penalty that will work for the uninsured motorist is a community service order because, virtually by definition, he has little or no money.”
There are a number of issues confronting the bureau. The most immediate is the cost of claims – and not only compensation.
Snook says: “There is natural inflation and the government is attempting to pass on costs to compensators that were previously met collectively – for example, reimbursing the NHS for the cost of treatment when someone is injured or repaying the DSS where benefits have been paid to someone who has been injured.”
The MIB has to meet these costs in the same way as any other compensator, “even though it is not exactly fair, as we are not a business – we don't make a profit. In many ways, we are a charity.”
Snook says: “More effort and interest has been put into pursuing non-payment of TV licences than there has been against uninsured drivers.”
Another big issue looming on the horizon is the increasing interest of the EU in matters of compensation, in particular the Fourth Motor Directive (2000/26/EC), the main provisions of which must be implemented by January 20, 2003. It deals with victims involved in an accident in another EU state. Snook says: “The directive introduces concepts that may, for good political reasons, have to be introduced in the UK either now or in the longer term. It gives a direct right of action against insurers. Every insurer must have a representative capable of handling and settling claims in every other EU state, although this is likely to be on a retainer basis.”
Each state has to appoint an information centre able to provide the identity of an insurer and the proper registration plates of the vehicle. The new MIB database should satisfy this requirement.
The centre must also carry details of the various insurer representatives and set up a compensation body charged with intervening should an insurer or its representative fail to give a reasonable response to a claim within three months.
Snook adds: “The victim should be able to contact a representative in his own country to have their claim dealt with. If it is not dealt with within three months, or there is not a reasonable response within three months, he can turn to the compensation body.
“This means, in effect, that the victim of an accident in another European state is receiving preferential treatment to someone in the UK.
“It does seem at least possible that the government would feel there were good political reasons to extend some of these benefits to the local population. It would be absurd to have an information centre providing this service, but refusing to hand out the information unless you have had an accident in another country. Everybody will be able to use that facility by one means or another.”
In this ever-changing climate, the MIB has also been affected by Lord Woolf's reform of the civil procedure rules. However, while, in some instances, the changes in access to the courts has been highly beneficial, in other aspects the benefits have been defrayed by the reluctance to tackle costs.
Snook adds: “To get the advantage out of the revised system you must reduce the cost but, so far, the civil procedure rules have increased them. Constraints contained in the earlier rules have been thrown away.”
Certainly life will get tougher for the uninsured motorist while, conversely, EU-wide initiatives will aid the victims. There may be light at the end of the tunnel for the MIB in that, after more than half a century in the front line of this battle, they may now start to have the edge on behalf of the good motorist.