Opinion

Insurers use the ‘compensation culture’ myth to help check the rise of legitimate PI claims

As I write, my 18-year-old daughter is attending the funeral of one of her closest friends, killed in a minibus accident while on a gap year conservation project. While as yet the causes of the accident are not known, it is a vivid illustration of why we should be concerned about safety in schools and other youth organisations.

As a personal injury (PI) lawyer, I have had to deal with parents who have lost children in accidents. I am also frequently involved in dealing with accidents that change lives. There is scope for lawyers and insurance companies to make a real difference when they are involved in major claims, but the best results require cooperation – something that the fiasco over conditional fee arrangements (CFAs) over the past few years may have damaged irreparably. Mediation is encouraged, but is it really making any headway? Negotiation has become much more difficult.

The insurance industry is a powerful one that has a major influence on government policy. Keeping control so it can reduce claims and maximise profits is essential. One way to reduce claims is to persuade the public that claimant lawyers are the problem by propagating the myth of the compensation culture. But Data Monitor figures to March 2004 indicate that the number of claims reduced by 16.7 per cent on the previous year. Deaths on our roads, though, increased last year compared with the previous year. The Government and the insurance industry both admit privately that the compensation culture does not exist, yet we hear little from them publicly to link claims with a lack of safety.

It is difficult for insurance companies to control third-party claims because the claimants are not customers. The compensation culture myth is just one method used to help provide control. The increase in before the event products coupled with a lack of freedom to instruct a solicitor of choice could be regarded as another.

All these issues have an effect on the ability to negotiate. Added to that, insurance companies now employ staff with less experience on the frontline. In many (particularly larger) claims, meaningful negotiations do not take place until solicitors are involved, which often occurs only after proceedings have been issued.

It cannot be in any party’s interest for the current state of affairs to continue. There are some good signs: witness the negotiations about success fees in employers liability and road traffic accident (RTA) cases, and predictable costs in RTA cases, which goes to show what can be achieved with cooperation. There are problems with the fixed success fees, but claimant lawyers are working with them and have moved on.

Most PI lawyers want to see their clients receiving the maximum benefit from their compensation. Many of us have a genuine concern to see a safer society. We cannot bring back a life or repair a broken limb, but we can get clients the best treatment they need to improve their lifestyle and, through our efforts, apply pressure to improve safety, which is the crucial issue and which will help achieve the right results for all.

I do not want to live in a society where our children do not have adventures. But where adventure does lead to tragedy, I want to help rehabilitate and make sure conditions are changed to avoid tragedy reoccuring.

It is important, also, that when tragedy strikes there is a united, cooperative front to do something about it. Clients should receive a professional service, which is provided through the cooperation of all involved, including the insurance companies. Clients who suffer serious injuries are often too distressed to understand the litigation process and need to see progress. Speedy progress requires cooperation. So come on insurers: put the CFA fiasco behind you. Claimant lawyers are willing. Are you?

Tony Merriman, head of the claimant depatment, ASB Law