OK – so there is this whole thing about a ‘compensation culture’ in the UK that has hit the headlines on numerous occasions. In reality, if you read the Lord Young / Jackson reports of late, the whole idea of a ‘compensation culture’ was deemed a media fuelled myth, of which there really is no issue.
The most recent headlines have been those of our former justice secretary Jack Straw whom, after investigating how one of his constituents details were sold around for money between claims companies and insurers to solicitors, hit out at the frivolous profit making industry of personal injury referral fees; something which we never pay and have always been against.
The insurers themselves were blamed for the increase in our car premiums as it was uncovered that it was the insurers themselves that are a party to the referral fee system, in which their own policy holder’s details are passed over to solicitors who are willing to pay huge referral fees of up to £1000 per claim. This has, according to recent news, been responsible for an increase in ‘frivolous’ claims that have not only driven our premiums up, but provided the insurers with a millions of pounds in profit from passing the details of accident victims over.
More to the point of this article, a blog from The Guardian was passed over to me the other day in which Aviva had conducted research to show that ‘frivolous’ claims had been around long before the introduction and explosion of the referral fee markets.
The article (http://m.guardian.co.uk/money/blog/2011/jul/14/compensation-culture-personal-insurance-claims?cat=money&type=article) lists some rather bizarre claims that have ranged from a man injuring himself at a wedding after throwing rice, receiving £50 in 1892 (modern equivalent £2,994), to an artist who was blown down by a gust of wind in 1886 receiving £30 (modern equivalent £1,796)! There is a whole list of weird and wonderful claims that Aviva have found in their archives – and pretty much all of them are claims we generally wouldn’t take on at all.
It’s quite key to note that one of the main subjects of the article appears to be about personal accident insurance policies, of which Winston Churchill was referenced as one such customer whom never claimed from his policy at all when he had it. Unfortunately, the article doesn’t confirm who actually paid the damages out to the victims; if it was through personal accident insurance, we are talking about an entirely different ball game to that of making a claim through someone else’s insurance for a personal injury accident that the No Win No Fee system is in place for.
For the No Win No Fee claims, we pursue compensation from the insurance of a negligent third party – i.e. a person or a company responsible for the accident. If the accident was your own fault, it’s likely you wouldn’t be able to make a claim for personal injury from someone else with a No Win No Fee lawyer.
If you had your own personal accident insurance, then I guess that’s what that is there for – to claim from if you injure yourself by accident. I am speculating on that though, as I’ve never really delved in to the ins and outs of them; I just recall someone trying to sell me it one time a few years ago.
I mention this as the article goes on to suggest that Aviva are saying that ‘frivolous’ claims predate any referral fee markets, and so the referral fee system can’t be blamed for the ‘compensation culture’ the media describe nowadays. That is how I seem to be taking the article anyway. But, it sounds to me like these examples are relating to this personal accident insurance and not claims for personal injury against someone else with a No Win No Fee lawyer.
So – we are actually talking about a whole different industry here…
I find it all, in my opinion, rather too “clutching at straws” to justify the referral fee markets that insurers do genuinely make millions of pounds from referring accident victims over to solicitors. Nevertheless, the article makes for an interesting read as there really are some crazy claims described in it!
In reality, the media has covered Mr Straw’s finding in great detail, and we have already had top insurers and the Association of British Insurers admitting that the referral fee system is the insurance industries “dirty secret” and confirming that premium increases are likely attributable to it.
Anyway, here’s another question: why do I care about telling you all this? Is it because I want to defend the Genuine No Win No Fee in which genuine accident victims should be entitled to compensation for an accident and injuries that were sustained through no fault of their own? Is it because I cannot stand the idea of referral fees and I am proud to work for a firm that has never once paid a referral fee for a claim to an insurer, claims company, garage, the police, or any other company in the claims market?
Well, it’s a yes for them all really. We never pay referral fees because they have the potential to limit access to justice and reduce the quality of legal services on offer (to quote the Law Society and Bar Council). By paying out a huge referral fee for a claim, your solicitor has less money to spend on you and your claim. They must absorb this exponential cost by either offering a lower level of service as they cannot afford to spend too much on your claim having paid out a load of money for a referral fee, or even charge you, the innocent victim, for their work.
We refuse to pay referral fees, and all of our clients come directly to us for our reputation. We will not involve ourselves in the referral fee markets, which gives us the resources to spend more on our clients and their claims; which sums up what we are all about. We are not about making a fast profit from buying a claim and running it cheaply – we are about providing our clients with a fantastic service and fighting for their right to access the compensation they genuinely deserve.
Ultimately, I firmly believe that the No Win No Fee should remain – the innocent victims shouldn’t have to lose any money or pay any costs when they are not at fault for an accident.
We only ever take on a case if we genuinely feel we have a good chance of winning it. You can only win a case if it is proved that the person or company you are trying to claim from has been genuinely negligent and has caused your injuries.
Another salient point I always like to address is the fact that insurance is there to insure you – it’s there to claim from. It’s the insurance company’s service that we pay for that protects us and pays out to innocent victims if we negligently hurt someone else; so, should they really be ‘moaning’ about too many claims when there service is there for claims to be made?
I say ‘moaning’ rather loosely!
There is a lot more to the ‘compensation culture’ in the UK than meets the eye. The article from the Guardian is certainly worth a read though!
