APIL blog

Can we afford to keep injuring people?
Deborah Evans | 11 Jun 2013

It’s hard to pick up a newspaper without reading a story about the rising cost of claims. But it’s not the claims that cost, it’s the injuries. There is a lot of talk about preventing claims, yet none about preventing injury.

So what does an injury cost? Well firstly, there is a cost to the NHS in treating the injury. This can vary enormously depending on whether the injury warrants a lengthy hospital stay or a trip to the local GP. Then, there is the time spent away from the workplace, which is a cost to the employer who will be paying for sick leave whilst suffering a drop in profitability. There is then the cost of, and time spent looking at, accident prevention so that it doesn’t happen again. The injured person will be in pain and will be unable to enjoy normal activity or planned events – holidays may need to be cancelled, sporting events cancelled, even weddings may need to be postponed. Injuries regularly occur at the most inopportune times, and rearrangements cost money. An injured person may lose income if unable to work, or may incur additional costs – for example needing a taxi to get to work if he is unable to drive, or needing adapted equipment at work. Many people benefit from rehabilitation, which comes at a cost. Rehabilitation can be so important in giving people the best possible opportunity to get back to full health, or make the best recovery possible.

Obviously, an individual has a legal right to make a claim for compensation if he is injured. There is nothing wrong with this – this is the compensation he needs, as the above examples clearly demonstrate. He can claim general damages for the injury suffered, any financial losses he has incurred, and he can claim for any future care needs if he has them. Damages for future care feature in many cases where there will not be a complete recovery, and the claimant will be left with an ongoing disability. Future care needs are calculated at actual cost. Damages are not a windfall, but are carefully calculated to ensure you are not given a penny more than you need. Sometimes, if people are young when they are injured and therefore have a long life expectancy, the sums can sound quite large and resemble lottery wins to the uninformed. But, if a disabled teenager receives an award of £1m for future care, with a life expectancy of 60 years, this equates to only £45 a day, which really does not go far enough in covering the costs I’ve already outlined. The reality is that living with an ongoing disability costs a serious amount of money. A person, who is fortunate enough to live longer than expected could, as a consequence, run out of damages before the end of his life, and the costs of caring for him will fall on the state.

It is not the claims that are costing the country a fortune; it is the very act of negligently injuring someone in the first place. If we spend more on prevention there would be fewer injuries, and fewer claims. The decline in standards is palpable. Only a week or so ago, the media carried stories from leading doctors concerned about decreasing levels of staffing in accident and emergency departments. Quite bluntly, they expressed their concern that people would not get the proper treatment, and that there was an unacceptably increased risk to patient safety. Claims against the NHS will spiral upwards if nothing is done.

Prevention is so much cheaper than cure.

At last - a balanced look at the whiplash issue
Deborah Evans | 07 May 2013

The Transport Select Committee’s inquiry into the true number and cost of whiplash claims has finally given claimant organisations a voice inside the halls of Westminster.

And news that the Government is not going to give a response to its whiplash consultation until the autumn means there is a good chance that the committee’s findings will be taken into account. At the very least, I hope the committee will note that, according to figures from the Compensation Recovery Unit (CRU), whiplash claims fell by almost 60,000 in the year 2012/2013. Claims are now back to the level they were in 2008/09.

This flies in the face of insurers’ claims of an ‘epidemic’. One of the features of an epidemic is that it spreads rapidly and widely. Scientists have yet to find one which reduces in size.

It’s hardly surprising that insurers are wide of the mark on this issue. The ABI has often based its claims about whiplash on anachronistic data. Its argument that the UK ‘has the weakest necks in Europe’, for instance, rests on a single survey that is nearly a decade out of date. The report, compiled by the, Comite European des Assurances was published in 2004 and relies on figures even older than that.

The truth is that the insurance industry’s disingenuous claims about whiplash are a misdirection designed to divert attention away from more inconvenient facts. According to the ABI’s recent report, Lifting the bonnet on car insurance – what are the real costs? the average car insurance premium in 2011 was £440. £88 of this was estimated to be caused by whiplash claims but £242 (more than half the average premium) went on car repairs and replacement vehicles. The Office of Fair Trading (OFT) has branded the area of car repairs as ‘dysfunctional’ and, having found that insurers’ approach to car repair and replacement “may push up premiums for drivers by £225 million per year”, the OFT referred the UK motor insurance market to the Competition Commission for investigation.

Similarly, documents disclosed as part of APIL’s judicial review showed that the ABI’s claims that premiums would reduce if changes to civil law were made were not as clear cut as they suggested.

In e-mail correspondence between the ABI and the Cabinet Office five days before the famous insurance ‘summit’ with the Prime Minister, the ABI refused to give chapter and verse on how much premiums would fall, saying “we absolutely cannot commit to a percentage… furthermore, we cannot commit to a timeframe.”

Since then, Direct Line and LV= have both publically indicated that premiums would not reduce significantly as a result of the changes.

The Government has already slashed lawyers’ fees in the RTA portal after being persuaded to do so by the insurance industry and is now considering channelling hundreds of thousands of injury cases through the small claims court on the same basis. This would have a devastating effect on access to justice with genuine claimants forced to pay for their lawyers out of their own pockets or take their chances in court alone against qualified solicitors, who usually represent defendants and their insurers.

Those who decide to go it alone without legal representation are likely to be considerably undercompensated and claims management companies will exploit any increase with aggressive marketing campaigns targeting injured people. This kind of publicity could even encourage more fraudulent or exaggerated claims, and yet the Government seems to think the small claims court is a panacea for dealing with fraud..

APIL’s carefully considered 10 point plan to eliminate fraud from whiplash claims was designed to tackle the problem effectively while maintaining the rights of genuine victims of injury, who are, after all, the reason the system exists in the first place. The Government’s proposals will simply create a process which works first and foremost for insurers and their shareholders.

The Transport Select Committee must listen to the facts. If changes to the small claims court are implemented, a totally unbalanced system will be created in which the rights of people suffering injuries through no fault of their own are pushed to one side. Only by listening to all parties can a balanced system be created, with balanced priorities and the interests of genuinely injured people at its heart.

The increase in clinical negligence claims - is it really the lawyers fault?
Deborah Evans | 22 Apr 2013

The press focuses on the fact that claims against hospitals continue to rise and that last year the Government set aside nearly £19 billion to cover compensation claims. Before jumping to conclusions, let’s understand the context - the facts behind the figures.

There are three reasons why the amount of damages paid out is going up. Firstly, if the NHS injures more people through falling standards, it will result in more claims. Secondly, those poor people who end up the most severely injured as a result of medical negligence are living longer. Thirdly, if the injuries inflicted (particularly in a number of the recent scandals) are more severe, they will obviously cost more to compensate.

When a patient is severely injured, he has high costs of future care. Each year, money will be spent on caring for such people’s needs – in some cases this may be round the clock care. Disabled people have much longer life expectancies than only a decade ago. Life expectancies for serious disabilities have increased by 50 – 100 per cent. The costs of care continue over a longer period of time, costing the wrongdoer - in this case the NHS - more.

Survival rates for the most serious injuries are increasing, which is good news. However, this also means that people are living with serious injuries who would previously not have survived at all. A baby with cerebral palsy, where the baby is brain damaged at birth, would have rarely survived a few years ago. Now, babies survive but need a lot of care.

What these costs do not demonstrate is rising legal bills. The cost per claim has actually gone down, and therefore it is wrong to point the finger at lawyers driving up these costs. A claim is only settled, and the lawyers paid, where someone has been genuinely injured. You only have to pick up a daily newspaper to see that hospital standards are falling – time and time again there is a story showing that there is a massive public health scandal here.

If the Government and the NHS want to reduce the costs of claims they need to stop injures happening in the first place. In an environment of cuts, there is a debate to be had as to whether there will remain enough money in the NHS system to provide for proper care for patients. Will the problem worsen over time?

Part of a lawyer’s job is to properly quantify claims and work out exactly what injured people need to provide for their future care. Lawyers bring great expertise to claims, and in particular, the precise calculation of compensation. Being injured should never mean being consigned to poverty, unable to afford proper care when the compensation has run out. Nor should it be the case that those injured through no fault of their own by the NHS should then have to rely on the cash-strapped NHS for their care needs.

No one deserves to be injured. Prevention, learning from mistakes, and a real focus on patient care is the best way to reduce the costs of claims. Claims only cost the NHS when people are injured on its watch. The scandal isn’t the rising cost of claims, it is the rising number of injuries. Let’s focus on cause, rather than effect.

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