Over the past few years, the lack of trusted car accident claim specialists is one of a few factors which have contributed to the UK becoming the ‘whiplash capital of Europe’. The personal injury and whiplash injury compensation claim bill has reaching £14 billion in 10 years, double what it was for the previous decade. The UK government has decided to initiate a ban on referral fees to stop the few bad-apple claims management companies from cajoling people into making whiplash injury compensation claims and pushing up motor insurance premiums. The primary means for them to do this, is making unsolicited contact with people and many people have criticised the government for not tackling the problem at it’s root cause.
However, along with these criticisms of the changes which are expected to come into effect fair in April 2013, an executive director of the Solicitors Regulation Authority (SRA) has spoken out, voicing his concerns that the so-called ‘Jackson reforms’ will not work in reducing car accident claims. The SRA regulates some 120,000 solicitors firms in the UK, so this particular concern has a great deal of weight. One of the main problems comes in the form of the alternative business structure (ABS), a tactic whereby a car accident claims company can carry on referring whiplash injury compensation cases and other claims to solicitors and earn money. The car accident claim companies can carry on trade legally due to a technicality which allows a firm to sidestep the fact that no ‘referral fee’ is being paid.
Car accident claims are not the only types of claims on the rise. The NHS has an astronomical medical negligence compensation claim bill pending in addition to its legal bill for whiplash claims. Executive director of the SRA, Richard Collins stated that “the market is instantly adaptable I think the vast majority of solicitors will very quickly and willing make sure they are compliant with the new statutory ban”. Collins went on to state that it “wouldn’t stop the continual innovation to be commercial”. Collins pointed out that it’s how the rules are enforced more than what is said on paper and the government will have to make sure that it backs up it’s claims with the proper practice to ensure things improve.
Jim Loxley is a Director at top claims specialist, My Compensation.