The Government plans to introduce legislation aimed at tackling unjustified personal injury claims.
The Government would like to see the Court dismiss in its entirety any personal injury claim where it is satisfied that the Claimant has been fundamentally dishonest. This will include cases where the Claimant has “grossly exaggerated” his or her own claim, and where the Claimant has colluded with another person in a fraudulent claim relating to the same incident.
Under the current law, the Courts have discretion to dismiss a claim entirely for fraudulent behaviour, but will only do so in very exceptional circumstances, and will generally award the Claimant compensation in relation to the “genuine” element of the claim. The Government intends to strengthen the law so that dismissal of the claim in it’s entirely should become the norm in such cases
Such measures are welcomed by the head of the personal injury team at Clarke Willmott, Lee Hart who adds a note of caution:
“Fraud or exaggeration cannot be condoned, but the new legislation will need to be very clear about what is meant by these terms. There is no doubt that if a claim is found to be entirely fraudulent, then it should be struck out. What constitutes “exaggeration” is more of a grey area. Courts already have the discretion to deal with alleged exaggeration. It will be interesting to see whether the proposed legislation adds anything to the existing position”.
To introduce the power to dismiss a claim in its entirety for either fraud or exaggeration is likely to lead to three things:
- an increase in spurious allegations of fraud and exaggeration by Insurers,
- an increase in satellite litigation to deal with such allegations, and
- an increase in the number of genuine Claimants who either underplay their symptoms or who decide not to bring valid cases at all, for fear of being falsely accused.
The Government also intends to introduce measures to ban the offer of inducements by lawyers in personal injury cases. On 1 April 2013, the Ministry of Justice banned Claims Management Companies from offering inducements to consumers to make claims. Other organisations continue to carry out such a practice, offering money or gifts as an incentive to clients for pursuing a personal injury claim. The proposed ban on inducements has to be welcomed in the attempt to tackle unjustified personal injury claims.
Although not part of the Government’s current approach, measures could be introduced to restrict the practice of insurers settling whiplash claims without confirmation of injury. Such tactics are adopted by a number of insurers who consider it cheaper to settle a claim without a proper investigation of its merits, before obtaining independent medical evidence of any injury sustained. This practice employed by insurers plays a significant part in encouraging claims, where fraudulent Claimants know that they do not have to subject themselves to independent medical scrutiny.