Compo culture: Has the pendulum swung too far?

We’ve written lots about efforts by insurers, the government and the police to crackdown on insurance fraud.
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According to the Association of British Insurers, fraud is adding £50 a year to the price of car insurance. Only this week, a group of men from Merseyside were jailed for their part in a scam designed to defraud insurer LV= of £500,000.

Unintended consequences

But has the welter of negative coverage of fake and exaggerated claims actually started to act as a deterrent for those who do actually have a valid case? We asked John Baden-Daintree, director of legal services at Quality Solicitors, to give us his thoughts… Is Britain’s so-called compensation culture putting genuine accident victims off making a claim? We’ve heard it often enough: “Britain has a growing compensation culture with people increasingly making dodgy claims for accidents and pushing up the cost of everyone’s insurance”. As a solicitor specialising in personal injury claims, I hear this line more than most – in fact, pretty much whenever I tell anyone what I do for a living! But while it’s unarguably one of those topics that tends to get people hot under the collar, I question how much these views reflect reality.
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Official statistics

The government keeps a record of every injury claim made. Looking at road traffic accidents specifically, far from showing that the number of claimants are spiraling out of control, official government stats show they’re actually falling. Road traffic crash claims are down 6.7% since 2011. On top of that, successive government reviews, including Professor Lofstead’s recent review of Health & Safety, have found absolutely no evidence of a compensation culture in Britain today. The other area where reality does not match preconceptions is over scams such as crash for cash. Freedom of information requests to the UK’s police forces uncovered only two such investigations in the last three years.

Vulture culture?

But misconceptions persist. Our research shows that a shocking 88% of us believe there’s something of a ‘compensation culture’ in Britain today. Sadly this has resulted in many innocent accident victims not pursuing a claim because they ‘don’t want to make a fuss’ (43%). A third (32%) say they didn’t want to fuel a compensation culture and a further 13% didn’t want to claim back their losses in case others thought badly of them. I know of a number of people who have not claimed back their losses because they worry about how others will perceive them. But the cost of not making a claim can be high: on average, people are left £1,178 out of pocket, which can leave people in debt. Typical losses include things like loss of income, medical expenses, additional childcare or even practical things such as having to go by taxi because of being unable to drive. Additionally they are missing out on the injury compensation they are entitled to receive.  [caption id="attachment_8937" align="alignright" width="200"]John Baden-Daintree, Director of Legal Services at QualitySolicitors John Baden-Daintree[/caption]

Suspicious minds

The culture of suspicion that surrounds personal injury claims is also unhelpful to efforts to bring greater transparency to this whole area. For example, our research on perceptions of personal injury has shown that 43% of people believe personal injury victims spend their compensation on a family holiday, with 42% believing victims go on a shopping spree. Our research also shows that only 19% believe the money is used to get people back into the position they were in before their injury. This is why we recommend you use a solicitor to help you make a successful personal injury claim while avoiding outdated perceptions of the personal injury claims culture, often held by those lucky enough to have never been in that position. Surely honest, hard-working people shouldn’t miss out on the financial compensation they need to get their lives back on track because they are worried that others will think badly of them? What do you think? Is insurance fraud as serious a problem as we're led to think? And would you ever be put off from making a legitimate claim? Let is know...

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