September 16, 2011

If you had a “too hard” compartment, what would you park in it? Come on, it’s a perfectly simple question! Is there, perhaps, something mooted in your life that seems a bit, well, complicated… Just the thing to park in your THC! But, beware, parking it may not be the end of the matter. As the following story all-too vividly illustrates.

According to this week’s Insurance Times, 14th Century rabble rouser Jack Straw – “never one to pull his punches” – has “gone in with all guns blazing” to “force the government’s hand” on “the mooted referral fee ban” which “only a few weeks ago looked as if it had been parked in the ‘too hard’ compartment.”

How has Jack Straw achieved the above manually-intensive feat? By means of a ten minute rule bill he tabled this week which features a “wish list” that includes the very same banning of referral fees.

Controversially, his wish list also includes requiring claimants to provide hard proof when claiming for whiplash, which could be tricky, given that the condition has no physical symptoms to speak of and has been dismissed by no less an authority than Straw himself as “hardly an injury at all, more a profitable invention of the human imagination, un-diagnosable, except by the third-rate doctors in the pay of claims management companies or personal injury lawyers.”

Other planks in Jack’s wish-list raft include hastening measures to prevent the sale of accident victim’s details and halving the fixed legal fee of £1,200 for claims pursued through the electronic claims portal system used currently for RTA claims worth less than £10,000, but possibly soon for anything under £40,000.

So far so broadly welcome, you might be thinking if you were an insurer. But hold on to the horses of your enthusiasm there just a gosh-darned second, because Jack is back to pick up on what Insurance Times terms ‘the topic that sparked his drive to clean up the motor insurance stables.’ And I think we all know exactly what that means!

Yes, the Straw man’s plan includes barring insurers from using post codes to determine premiums, in the same way as interfering busy-bodies from the continent have just banned them from taking account of whether a person is male, female, or anywhere in between – a rather more narrowly acceptable prospect, doubtless, from the underwriter’s POV.

On a more positive note, the paper concludes that The bill itself is highly unlikely to become law. The fact that it’s getting a second reading, however, clearly shows the grey-faced one’s crusade on bad motor insurance things is not to be ignored.

Deborah Evans, Chief Executive of the Association of Personal Injury Lawyers counters that  “Jack Straw is deluded if he thinks a lawyer could possibly give advice to an injured person for the price of £100. In all cases the solicitor needs to talk to the client to understand the symptoms, and the impact of the injury on the client’s life, as well as obtaining a medical report. These were the factors taken into account when fixed costs for road traffic accidents were agreed with the insurance industry only last year.”

Meanwhile former Motor Accident Solicitors Society president John Spencer says Straw’s “misguided” proposals on whiplash injury “run a very serious risk of disproportionately punishing legitimate accident victims and shockingly sideline the views of the scientific community on these issues.”

It will all be worth it in the end, Straw clearly believes with an almost Blair-like messianic conviction, when all his wise reforms are passed and motor insurance premiums tumble.


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