Compensation plan side-steps lawyers

Plans for a no-fault compensation scheme, side-stepping lawyers and the courts, are to be looked at by a working party after they were unveiled at an insurance conference.

Alan Fisher, a partner with Davies Arnold Cooper, put forward the proposals at a conference of the Liability Underwriters Group.

Delegates were broadly in favour of a new study produced by the Insurance Institute of London in favour of no-fault compensation, but Fisher argued that the radical report did not go far enough.

“It does not give an action plan for what the insurance industry can do in practice to bring about the worthy changes which the report recommends,” he says.

Fisher told the conference that insurers should press for changes in the law which would make the idea of no-fault compensation attractive to employers.

Employers offering a no-fault scheme with appropriate benefits should have a statutory defence against further action, he argued.

It was decided that a working party should be set up to consider Fisher's plans and the broader question of problems with the tort system.

But Andrew Dismore, co-ordinator of the damages group of the Association of Personal Injury Lawyers, says the scheme is a “recipe for reducing compensation and undermining the rights of injured workers”.

“If insurers genuinely believe in no-fault compensation then they should stop serving defences which deny liability,” says Dismore, of Robin Thompson & Partners.

The study, 'Liability insurance and accident compensation', concludes that tort and liability insurance is inadequate because too many people are slipping through the compensation net.