Why are road traffic compensation claims rising?

In recent years much has been made of the so called compensation culture in the UK, however, as Lord Young acknowledged in his report to the government on this issue, this is a myth.  

“The problem of the compensation culture prevalent in society today is, however, one of perception rather than reality,” Lord Young explained.

 

Indeed the number of PI Claims against companies has gone down significantly over the years as business finally get round to realising that they are responsible for the safety of their employees.  

That is in all areas except for road traffic accidents, where the number of people seeking compensation claims has been increasing significantly, with the insurers claiming which is driving up the cost of car insurance premiums – although the actual affect on car insurance premiums is open to considerable debate.

Ian Crowder, spokesman for the AA, said: “The number of personal injury claim lawyers has doubled over the last two years. It’s making people make personal injury claims that they perhaps wouldn’t have done in the past, and perhaps where they didn’t need to before.”

This increase also comes in the face of statistics suggesting the number of people being injured on Britain’s roads is actually declining.

Figures released by the Department for Transport in June 2010 show 24,684 people were seriously hurt on the roads in 2009, a reduction on the 26,034 the previous year, and a 45 per cent cut from the 1994 to 98 baseline target the government is aiming for.

The significant cut is actually ahead of the government’s target, but despite this, the number of compensation claims being made following a road traffic accident have been rising steadily since 2007.

The situation surrounding the increase in car insurance premiums became so severe that the Transport Select Committee took the step of holding an inquiry into the issue, in which the reasons why members of the industry believe compensation claims were increasing were revealed.

In his Common Sense, Common Safety report, Lord Young said the exposure in the media of personal injury cases could be fuelling their increase. This is a point Ashton West, chief executive of the Motor Insurers Bureau, also raised with the Transport Select Committee, the Daily Telegraph reported.

“I think it is because of aggressive marketing on daytime TV. It is creating a view that if you are involved in an accident which is not your fault, you can collect a pot of money,” he said. However, he added this is perhaps the “price to be paid” to allow consumers to collect for genuine injuries.

Nick Starling, director of general insurance and health at the Association of British Insurers, explained that in some cases less-than-reputable personal injury solicitors were offering consumers “huge temptation” to make a claim. 

 

Why are road traffic compensation claims rising?

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