Cutting cyclists' compensation to feed fat-cat insurers
Cutting cyclists' compensation to feed fat-cat insurers
As Cycling UK reported last week, the Ministry of Justice (MoJ) believes we have a compensation culture. They think too many people pursue exaggerated whiplash claims, which means we all pay too much for our car insurance. Their plan to tackle this is to prevent injured people from recovering their costs when pursuing legitimate claims for moderate but non life-changing injuries. Cycling UK, believes Road Victims are Real Victims, and is calling on supporters to stop them in their tracks before it is too late.
Largely because the MoJ has announced these changes as 'whiplash reform', with an assurance that the insurance companies will all pass on the savings to the consumer by reducing premiums, most people have yet to see past the dog-whistle politics and realise why raising the small claims limit in England and Wales to £5,000 might well affect them and theirs.
Victims pay their own costs
As this is a cycling blog, let's look at real people and real injuries suffered by cyclists who have been represented by personal injury lawyers Slater and Gordon.
Cycling UK member Anthony was cycling over a roundabout when a driver failed to give way at the entrance. In the ensuing collision, Anthony went over the bonnet of the car, sustaining various injuries to his hips, elbows and hand, and his bike was a right-off. His personal injury claim was settled, but a medical report was needed. He recovered £2909.95 for injuries and bike damage.
Currently the small claims limit is £1,000, so Anthony's legal costs and the costs of the medical report were paid by the driver's insurers. If the limit had been £5,000, Anthony wouldn't have recovered £2909.95, as he would have had to pay his costs out of that compensation.
It's not just claims arising from vehicle collisions that are affected. John injured his knee after a crash when he hit a hidden pothole.The council disputed liability and court proceedings had to be issued before the council's insurers eventually settled the claim. John received £3,000 for an injury which caused pain and suffering, and affected his sleep and daily activities for ten months.
Making Anthony and John pay their own costs might well have put them off claiming compensation, even though someone else was liable. That's what the insurance industry want, because fewer pay-outs mean more profit.
If they were confident chaps, and happy to represent themselves, they could have claimed without instructing solicitors. Then, of course they would have been able to rely completely on the insurers' sense of fair play, that they wouldn't take advantage of their lack of legal representation, seek to delay and frustrate to avoid payment, and wouldn't deflect blame by suggesting that either Anthony or John were partially or entirely at fault. We have, of course, never seen such contributory negligence arguments raised about, say, people not wearing helmets and hi-viz, filtering through traffic, or riding too near or too far from the kerb!
Anthony and John might have instructed solicitors and just resolved to pay legal and medical report costs out of any compensation, but how many others might now face Hobson's choice over a civil claim when knocked off their bike and injured? Well, fractured ribs, collapsed lungs, a fractured wrist, and a fractured cheekbone all have one thing in common: in most cases such injuries will merit less than £5,000 for another's negligence.
Those injuries might not be life-changing, but neither are they insignificant. Seventy per cent of cyclists' compensation claims fall within this sub-£5,000 claims bracket yet, if the MoJ has its way, costs recovery will be removed - and all to help the insurers and reduce whiplash claims, something that any personal injury lawyer will tell you are almost unheard in claims by cyclists.
If the thought of a £40 per year saving on your car insurance sounds attractive, as the MoJ are spinning to sell these changes, just look beyond the headlines. Whilst there are issues with whiplash claims that need to be addressed, the Government's own figures show that whiplash claims have fallen by a third since 2011. They now say that if the claims can be reduced further, the insurers have promised faithfully to pass on the savings to the consumer, presumably just like they have over recent years whilst whiplash claims have been falling?
The MoJ giveth - and the Treasury taketh away
Missed that reduction in your premium? That's because the average car insurance premium rose by 13.5% in the year to August 2016, despite falling whiplash claims, but the public is being sold the line that insurance costs will go down if whiplash reforms are implemented. You can trust the insurers' promise if you want, but bear in mind that what the MoJ giveth with one hand, the Treasury will take with the other through the increased insurance premium tax announced in November.
Rest assured, however, that if the small claims limit rises to £5,000, the majority of cyclists seeking compensation after road collisions will be either discouraged from claiming, or cheated of full recovery of damages by costs deductions from their compensation, which could in some cases eat up all they receive.
Road Victims are Real Victims
These changes don't just affect cyclists, they also massively impact on pedestrians and other road users with non-whiplash claims, such as the child or pensioner knocked over crossing the road, or the passenger in a vehicle with scarring from broken glass. In consequence, Cycling UK is working with charity friends RoadPeace (the national charity for road crash victims), and Living Streets (the national charity for everyday walking), to oppose this change.
Last Thursday, with our partners, Cycling UK launched Road Victims are Real Victims online action. Since then, 5,500 people have used this tool to send an email to the Justice Secretary Elizabeth Truss, outlining their opposition to compensation cuts which disproportionately impact on vulnerable road user crash victims.
A country that works for everyone - except victims?
The MoJ consultation closes on 6 January, and we hope to have 10,000 supporters saying Road Victims are Real Victims, and asking the MoJ to treat road victims fairly.
In her first speech as Prime Minister, Theresa May said her mission was to make the country one that works for everyone, but surely that must include vulnerable victims? Otherwise, it's just a country that works for insurers. We need your help to tell the MoJ to think again. You can click here to email the MoJ, and say no to Truss Justice.