No sign of RTA claims decreasing despite ban on referral fees
Industry News : 17 June 2013
Recent figures published by the RTA Portal Company have revealed that in April this year, 79,483 claims were opened. This, astonishingly, was the month in which the ban on referral fees and other Jackson reforms came into action.
This has sparked speculation that the referral fee ban has had little impact on the number of RTA claims, with figures this year up by 27% compared to April 2012, which saw 17,000 fewer claims reported.
A surge in claims was reported in the weeks prior to the implementation of to the Legal Aid, Sentencing and Punishment of Offenders Act with 91,235 claims opened in March this year – a 25% increase on the previous month.
The news comes at a time when all sides in the whiplash debate prepare to make their case to a House of Commons committee.
Head of motor insurance for the Association of British Insurers, James Dalton, explained that April’s claims figure was always expected to be high as it was the last month before fixed costs were reduced.
He disagreed that the increase in claims correlated to a lack of effect from LASPO.
‘It’s no surprise for me that April’s figure is high as claimant lawyers knew the gravy train was about to hit the buffers,’ he said.
‘Although we had the Jackson framework you still had people making £1,200 for cases before 30 April. The reforms will take time to bed in and behaviour will change over time.
‘May is going to be the true test of what LASPO and the costs changes look like.’
A spokeswoman for the Association of Personal Injury Lawyers(APIL) observed that the number of registered claims in April was roughly the same as for October and November 2012 and January this year.
‘We would expect the level to go up and down in some months as firms adapt their practices to the various reforms, but the number of claims registered for the year as a whole should remain steady as there is no reason to suggest that the number of injuries sustained has changed.’
The spokeswoman went on to explain that the proposed increase in the small-claims court limit would make little difference to claim numbers as it would open the way for claims management companies.
‘The number of spam texts and cold calls will surge as claims management companies will be able to take on cases themselves.’
Meanwhile, the transport select committee has confirmed it will hold its next session as part of its whiplash inquiry on Monday 17th June from 4pm. From the insurers’ side, Dalton will appear alongside Director of claims for Aviva UK, Dominic Claydon, Catastrophic and injury claims technical manager for Axa Insurance, David Fisher and Director of claims for the Direct Line Group. Steve Maddock.
The legal community will be represented by: Chief executive of the Law Society, Desmond Hudson, President of APIL, Matthew Stockwell, from the Forum of Insurance Lawyers, Nigel Teasdale, chairman of the Motor Accident Solicitors Society, Craig Budsworth, and Andrew Ritchie QC.