Labour Scum calls for reform of car insurance
Discussion
http://www.bbc.co.uk/news/uk-13922554
Am i doing this right, he's a labour MP so it must be a bad idea to try and cut down on the ambulance chasers
Beeb said:
Former justice secretary Jack Straw is calling for reform of the motor insurance industry.
He says insurers are getting paid for referring clients' details to personal injury lawyers without permission.
This is outragous, what a bloody stupid thing to call for.He says insurers are getting paid for referring clients' details to personal injury lawyers without permission.
Am i doing this right, he's a labour MP so it must be a bad idea to try and cut down on the ambulance chasers
Jack Straw and Alan Johnson have been the best spoken people of the Labour party over the past year.
They have brought great ideas and good constructive debate over Conservative and labour policies new and old.
It is a shame that both of these could have done something about this only a year ago.
They have brought great ideas and good constructive debate over Conservative and labour policies new and old.
It is a shame that both of these could have done something about this only a year ago.
The Times said:
Companies are selling drivers’ details to claims firms exploiting the no-win, no-fee system
‘Our records indicate that you may be entitled to £3,450 for the accident you had. To claim free reply CLAIM to this message,” went the text that my pal Phil Riley received last week.
This “accident” was, in truth, a minor prang. Phil had stopped in traffic. The chap behind drove into him, with minor damage to Phil’s car; no personal injuries. The other driver’s insurer paid Phil’s repair bill.
Within days of this prang, 18 months ago, Phil was bombarded with texts and personal calls to tell him that if he would make a claim, three or four thousand pounds would be his for the personal injury he had suffered. He told the callers what they were doing was amoral. He had no injury. The texts and calls continued. Phil asked me, as his MP, how the claims companies had obtained his details including his mobile phone number. He had never authorised this. Didn’t he have some basic data protection rights?
I went to see the Association of British Insurers (ABI) and senior executives of two of Britain’s largest motor insurers and asked them. A long pause, a look of embarrassment, then one of the executives said: “This is the industry’s dirty secret. It’s we, the insurance companies, who sell on this personal information.”
Incredulous, I asked how it could be in an insurance company’s interest to sell information to a claims company that was used to make a claim against the self-same company. “If we don’t sell this information, others in the know will do so — recovery firms, garages, credit companies, the insurance company on the other side, even the police.” (One police force made £1.3 million in 2008-9.) The income from this trade is huge, £200-£1,000 for each referral. There can be several from just one accident. Referral fees are now a crucial part of all insurance companies’ revenue streams.
Phil had another question: “Why, for law-abiding folk with impeccable records, are car insurance premiums rocketing when our roads have never been safer?” The figures are stunning. In 2009 the number of road accidents involving personal injury was 31 per cent down from the average for 1994-98. Improvements in car safety mean that where there is an accident the risk of being badly injured has dropped significantly. Thefts of and from vehicles have also slumped — down by almost three quarters (72 per cent) between 1995 and 2010. Meanwhile, premiums have shot up by at least 30 per cent in the past year and in some urban areas by even more. Yet most motor insurers are still operating at a loss.
The answer to Phil’s second question is that law-abiding drivers are victims of “a dysfunctional system in which everyone behaves badly”, as one senior insurer told me.
The rewards for this bad behaviour can be great. The number of registered claims management companies has doubled to 3,400 in two years. Their high-pressure sales techniques have led to a phenomenal growth in the number and value of claims for personal injury. The cost of personal injury claims has doubled in ten years, from £7 billion to £14 billion. ABI analysis shows a direct link between the number of claims companies in a region and the level of claims. In the North West, with a high density of claims companies, 40 per cent of claims have a “bodily injury component”, compared with 25 per cent across the country — yet the region’s roads are no less safe.
The “bodily injury” that the claims company was enticing Phil to make was for “whiplash”, which now accounts for 80 per cent of all claims. It’s perfect for the claims companies: a soft-tissue injury that no scan or X-ray can pick up, so claims rely on the patient’s description. It’s usually entirely trivial. Respectable medical websites prescribe paracetamol. The cost to the NHS of treating whiplash is only £8 million. The cost to insurers of whiplash claims is £2 billion. Very odd.
The current “no-win, no-fee” arrangements for legal costs mean that it’s usually cheaper for an insurer to concede a claim than fight it. Add in the growth of “cash for crash” frauds and it’s little wonder that the law-abiding public are being milked as they are.
The senior insurance executives I met are decent people. They dislike the unwholesome trap they are in. But they know that change must be imposed externally. Here’s how:
• Referral fees should be outlawed, and the no-win, no-fee system speedily reformed, as Lord Justice Jackson’s 2010 review (endorsed by all parties) recommended;
• The law on damages for whiplash should be changed to require proof of serious injury, as other jurisdictions do;
• The Information Commissioner and Ofcom should crack down firmly on the trade in personal data and hard-selling techniques, if necessary with new powers;
• Much tighter regulation of claims companies must be introduced.
There will be howls from those with a vested interest in the present system, all protesting that what they do is in the public interest. It’s balderdash. This is not a system; it’s a racket. The quicker it’s ended, the better it will be for the law-abiding motorist, including my pal Phil.
Jack Straw is the Labour MP for Blackburn
That's the article from the Times - I think that he has raised some good points, what Labour changed with legal aide was as usual done with the best of interests but has spawned something more sinister. It needs to go, raising the point of having proof is a very good point.‘Our records indicate that you may be entitled to £3,450 for the accident you had. To claim free reply CLAIM to this message,” went the text that my pal Phil Riley received last week.
This “accident” was, in truth, a minor prang. Phil had stopped in traffic. The chap behind drove into him, with minor damage to Phil’s car; no personal injuries. The other driver’s insurer paid Phil’s repair bill.
Within days of this prang, 18 months ago, Phil was bombarded with texts and personal calls to tell him that if he would make a claim, three or four thousand pounds would be his for the personal injury he had suffered. He told the callers what they were doing was amoral. He had no injury. The texts and calls continued. Phil asked me, as his MP, how the claims companies had obtained his details including his mobile phone number. He had never authorised this. Didn’t he have some basic data protection rights?
I went to see the Association of British Insurers (ABI) and senior executives of two of Britain’s largest motor insurers and asked them. A long pause, a look of embarrassment, then one of the executives said: “This is the industry’s dirty secret. It’s we, the insurance companies, who sell on this personal information.”
Incredulous, I asked how it could be in an insurance company’s interest to sell information to a claims company that was used to make a claim against the self-same company. “If we don’t sell this information, others in the know will do so — recovery firms, garages, credit companies, the insurance company on the other side, even the police.” (One police force made £1.3 million in 2008-9.) The income from this trade is huge, £200-£1,000 for each referral. There can be several from just one accident. Referral fees are now a crucial part of all insurance companies’ revenue streams.
Phil had another question: “Why, for law-abiding folk with impeccable records, are car insurance premiums rocketing when our roads have never been safer?” The figures are stunning. In 2009 the number of road accidents involving personal injury was 31 per cent down from the average for 1994-98. Improvements in car safety mean that where there is an accident the risk of being badly injured has dropped significantly. Thefts of and from vehicles have also slumped — down by almost three quarters (72 per cent) between 1995 and 2010. Meanwhile, premiums have shot up by at least 30 per cent in the past year and in some urban areas by even more. Yet most motor insurers are still operating at a loss.
The answer to Phil’s second question is that law-abiding drivers are victims of “a dysfunctional system in which everyone behaves badly”, as one senior insurer told me.
The rewards for this bad behaviour can be great. The number of registered claims management companies has doubled to 3,400 in two years. Their high-pressure sales techniques have led to a phenomenal growth in the number and value of claims for personal injury. The cost of personal injury claims has doubled in ten years, from £7 billion to £14 billion. ABI analysis shows a direct link between the number of claims companies in a region and the level of claims. In the North West, with a high density of claims companies, 40 per cent of claims have a “bodily injury component”, compared with 25 per cent across the country — yet the region’s roads are no less safe.
The “bodily injury” that the claims company was enticing Phil to make was for “whiplash”, which now accounts for 80 per cent of all claims. It’s perfect for the claims companies: a soft-tissue injury that no scan or X-ray can pick up, so claims rely on the patient’s description. It’s usually entirely trivial. Respectable medical websites prescribe paracetamol. The cost to the NHS of treating whiplash is only £8 million. The cost to insurers of whiplash claims is £2 billion. Very odd.
The current “no-win, no-fee” arrangements for legal costs mean that it’s usually cheaper for an insurer to concede a claim than fight it. Add in the growth of “cash for crash” frauds and it’s little wonder that the law-abiding public are being milked as they are.
The senior insurance executives I met are decent people. They dislike the unwholesome trap they are in. But they know that change must be imposed externally. Here’s how:
• Referral fees should be outlawed, and the no-win, no-fee system speedily reformed, as Lord Justice Jackson’s 2010 review (endorsed by all parties) recommended;
• The law on damages for whiplash should be changed to require proof of serious injury, as other jurisdictions do;
• The Information Commissioner and Ofcom should crack down firmly on the trade in personal data and hard-selling techniques, if necessary with new powers;
• Much tighter regulation of claims companies must be introduced.
There will be howls from those with a vested interest in the present system, all protesting that what they do is in the public interest. It’s balderdash. This is not a system; it’s a racket. The quicker it’s ended, the better it will be for the law-abiding motorist, including my pal Phil.
Jack Straw is the Labour MP for Blackburn
Jack Straw and the former Robin Cook seemed to be the only two Labour Ministers I've gotten on with.
Puggit said:
And who didn't do anything about it during 13 (long, long) years in power?
I don't think it was made aware to them, they can't know everything that's going on and Labour trying to fix the economy and manage some wars took precedent. It's only in the last 18 months as policy's have started to rise that the public (media) have noticed. Jack Straw was the Secretary of State for Justice towards the end so wasn't his domain. I'm sure he has plenty of time to bring something together now though.
t who has left his mark well and truly on this country.muffinmenace said:
I don't think it was made aware to them, they can't know everything that's going on and Labour trying to fix the economy and manage some wars took precedent. It's only in the last 18 months as policy's have started to rise that the public (media) have noticed.
Jack Straw was the Secretary of State for Justice towards the end so wasn't his domain. I'm sure he has plenty of time to bring something together now though.
Well you'd hope they'd be aware as it was Labour who extended 'no win no fee' to most civil cases.Jack Straw was the Secretary of State for Justice towards the end so wasn't his domain. I'm sure he has plenty of time to bring something together now though.
Ironically Jack Straws own constituents are some of the worst offenders.
And it's been going on in Blackburn unabated for years. In 2006 Blackburn was the top town for motor insurance fraud
Claimscouncil website said:
The North West has been developing a reputation as an insurance fraud hotspot for some time. Last August, Insurance Fraud Bureau figures revealed that the area remained the ‘crash-for-cash’ centre of the UK, for the second consecutive year â with Liverpool, Blackburn, Manchester, Oldham and Bradford all in the top 10 conurbations for this type of motor insurance fraud.
SourceAnd it's been going on in Blackburn unabated for years. In 2006 Blackburn was the top town for motor insurance fraud
Yes car insurance website 2006 said:
Statistics from the Insurance Fraud Bureau (IFB), which is part of the Association of British Insurers, have shown Blackburn to be the car insurance fraud capital of the UK.
Bradford, Bolton, Birmingham and Oldham follow close behind but Blackburn came top with 1,710 staged accidents taking place in the Lancastrian town since 1999.
Source|http://www.yesinsurance.co.uk/insurance-med...Bradford, Bolton, Birmingham and Oldham follow close behind but Blackburn came top with 1,710 staged accidents taking place in the Lancastrian town since 1999.
Edited by sparkythecat on Monday 27th June 13:53
Humphrys lost his rag about this one on the Today prog this morning - http://news.bbc.co.uk/today/hi/today/newsid_952300...
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