The public would feel comfortable with using an online portal that resulted in a “straightforward settlement” of a personal injury (PI) claim without the need for lawyers, according to a survey commissioned by the Association of British Insurers (ABI).
The ABI commissioned the survey as MPs prepare to debate the Civil Liability Bill tomorrow, their first day back after Parliament’s summer recess.
The findings unsurprisingly contrast with surveys conducted by claimant groups.
The vast majority of those surveyed by Consumer Intelligence felt that legal costs were too high.
They were told: “For every £1 which is paid out in personal injury compensation, on average an extra 50p is paid out to lawyers. So, for example, if you won a claim with a pay-out to the value of £2,000, lawyers would also be paid approximately £1,000.”
Some 41% said this was “too much” and 46% “far too much”.
Two-thirds of respondents felt positive about the proposals to simplify claims when it was explained like this: “The government has proposed plans for reforms to simplify the personal injury compensation process for settling lower-value claims. This will likely include steps such as introducing an online process to replace the need for legal representation in low value claims scenarios.
“The reform is estimated by the government to reduce the price of a yearly motor insurance premium by £35 on average. How do you feel about this proposed reform and the impact it will have on consumers?”
They were then asked how they would feel about submitting a £2,000 claim “using a simple online form, which would result in a straightforward settlement process, rather than seeking legal representation”.
Some 71% said they would be comfortable doing this, but the survey did not ask how the consumer would feel if they had to represent themselves in the small claims court.
Asked to identify which of five factors was most important if the respondent were to make a low-value claim, a simple claims process came top (37%), followed by reduced insurance premiums (31%), being able to submit the claim online (13%), a quick pay-out (12%) and lastly an ability to reclaim legal costs (7%).
Finally, asked to think about the increase in the number of motor PI claims, the respondents were asked to what extent they thought that eight different factors may be responsible.
Two-thirds identified a ‘compensation culture environment’ as largely responsible, followed by an ‘increased number of “no win, no fee” style lawyers (59%), claims management companies encouraging claims and a ‘growth in whiplash-style claims’ (both 58%).
Respondents also pointed at cash-for-crash collisions (47%), more cold-calls and texts encouraging claims (45%), more public awareness that compensation can be claimed for genuine injuries (43%) and higher levels of public confidence in making claims.
James Dalton, the ABI’s director of general insurance policy, said: “This survey highlights significant public support for the government’s plans to reform the personal injury compensation system.
“There is overwhelming recognition that legal costs are too high and need to be reduced. Most people recognise the benefits of a simple, streamlined system for dealing with low-value personal injury claims, that preserves access to justice, and would be confident to use it.
“Reforms in the Civil Liability Bill will mean a fairer system for claimants, motorists and compensators. This is why the bill’s provisions must be implemented in full, and not watered down.”