The time taken to settle the average personal injury compensation claim would fall from three years to just six months under newly unveiled proposals from the Association of British Insurers (ABI). The provision of care and rehabilitation for ill and injured people would also be significantly increased.
The proposals, entitled ‘Care and Compensation’, envisage a fast and fair compensation system that puts the interests of genuine claimants first, and tackles the problems of the current system, which is too slow and expensive, according to the ABI.
It would also reduce the massive GBP2 billion that goes each year on claimants’ legal and other costs. An average of 93 pence is currently paid in legal and other costs for every GBP1 paid out in compensation claims under GBP5,000.
Our proposals are a blueprint for much-needed reform of the personal injury compensation system. Too many people are waiting far too long to get a fair payout. This is because the compensation system is so adversarial. We are all paying more for our insurance than we need to as a result of the system’s legal costs. And the focus on compensation gets in the way of people getting rehabilitation care, commented Stephen Haddrill, director general of the ABI.
He added that the government’s Compensation Bill is a positive first step on the road to reform. But much wider reform is urgently needed to ensure we have a compensation system that cares about the people it is set up to help. Reform will enable insurers to provide a better service to policyholders and claimants.
In its report, the ABI proposes:
A new compensation process for all personal injury claims under GBP25,000 that means claimants can seek compensation without having to go through a long and costly legal process. Under the ABI’s draft, it would comprise:
– an easy-to-use claim form which will enable people to submit their claim without the need for legal advice;
– a faster timetable that would give insurers only three months to accept or reject a claim;
– a new public scale of damages to set out compensation payments for specified injuries.
Indeed in 2004, 28 million working days were lost to illness; seven million to injury. This costs employers up to GBP13 billion a year. The faster people get care, the faster they get better. To ensure claimants and employees receive the care they need quickly to help them recover and get back to work, the ABI proposes:
– tax incentives for employers to provide rehabilitation care, through a new rehabilitation tax credit;
– extending the role of the Health and Safety Executive and the NHS to include promotion of rehabilitation;
– a new code of best practice to improve responses to accidents and ill health in the workplace.