2016 ABI Motor Conference report

The ABI Motor Conference took place in London on 18 October. The agenda for the conference – claims reform - was turned on its head last week by the Ministry of Justice’s (MoJ) decision to postpone the long awaited consultation on the government’s proposed reforms to personal injury.

CHO members may recall that in November 2015, then chancellor George Osborne announced plans to change the current law. People making personal injury claims worth up to £5,000 would have to use the small claims court and could not recoup the cost of any legal advice. In addition, they would no longer be able to get any cash settlement for pain and suffering caused, although they would be able to claim for physiotherapy and loss of earnings.

One year on, and the reforms remain on the agenda, but MoJ ministers have decided that they are not a priority for the government, and while the proposals haven’t been shelved completely, we believe the consultation will now be postponed at least until after Christmas.

The decision came as a shock to insurers, who confidently expected the government to row in behind their lobbying. The ABI has suffered a major setback for the second time in as many years following the insurance industry’s failure to ban credit hire in 2015.

At the conference, Iinsurer after insurer lined up to bemoan the failure of the government to act, but in truth the ABI’s arguments in favour of reform have been half-baked. Car premiums have rocketed while whiplash claims have fallen, and the perennial lack of consumer trust in insurers means few members of the public think the promised £50 rebate will materialise if these reforms pass into law.

Some parts of the personal injury sector have taken the fight to the ABI during the last six months with a ‘guerilla’ strategy in the media to respond to insurance industry propaganda and stand up for consumers facing the removal of their rights of redress.

However, it would be churlish to deny that an overriding factor behind the government’s decision was Brexit and David Cameron’s resignation. The whiplash reforms were born in Cameron’s Number 10 Policy Unit and endorsed by Chancellor Osborne.

Theresa May has been conspicuous in junking much of Mr Cameron’s agenda, and instead promising a new focus on ordinary folk struggling to get by, exactly the people who would be adversely affected by these proposals.

What next? The reluctance of the Government to step in and legislate is partly an acknowledgement of the complexities inherent in personal injury claims.

And, if dysfunction in the motor claims market is largely the responsibility of the claims industry, then it is beholden on the claims industry to sort it out. That was certainly the view of ex justice secretary Chris Grayling when he addressed the same ABI conference a year ago.

In recent weeks, there have been called from both insurers and the claimant lobby for a collaborative approach. All sides want to see a stop to cold calling, a reduction in fraudulent and frivolous claims, while maintaining a person’s right to redress in the event of a non-fault accident.

It remains to be seen whether the two sides can put aside years of conflict to come up with a package of changes all can buy into (including HMG). But with insurers on the back foot for once, there is no better time for the ABI to swallow its pride and sit down to constructive talks with the claimant industry.