Mark Barlow: Vital we get to grips with insurance claims culture

Nuisance callers can be harmful, particularly when theyre from fraudsters who are targeting the elderly and vulnerable.
Nuisance callers can be harmful, particularly when theyre from fraudsters who are targeting the elderly and vulnerable.
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IT was no surprise to me to learn recently that a complaint about nuisance callers is lodged with the UK’s data watchdog, the Information Commissioner’s Office, every five minutes.

Sadly this is a growing pattern of behaviour where people are receiving an unsolicited nuisance call, sometimes every day in a practice fuelled by ambulance-chasing lawyers.

In addition to this, many of the
people contacted are clearly worried about how their personal data has
been obtained and what it is being used for. Nuisance calls are just part of the growing compensation epidemic which the UK faces. A claims culture is now firmly embedded within our society, driven by claims management companies, whose activity has soared, despite government attempts to crack down on the practice.

My biggest fear is that Britain has now become a country obsessed by personal injury claims, and blame, and there is a huge industry specialising in them – principally for holiday sickness, whiplash or injury at work. The result is that this will ultimately push up the insurance cost for the ordinary person whether booking a holiday or taking out insurance on a car.

Over the years claims management firms have continuously been successful at finding ways around legislation and some are operating right at the cusp of the law. Many of us have received the call regarding the “accident” we haven’t actually been involved in which just goes to prove that random, speculative calls to people are being made.

As someone involved in the insurance industry, I have welcomed the Government’s recent legislation aimed at combating the growing claims culture. Under new laws to tackle insurance fraud, courts are, for example, required to dismiss compensation applications in full if the claimant has been fundamentally dishonest.

The Government is also attempting to tackle false whiplash claims, forcing claimants to have medical assessments conducted by independent accredited professionals, working on fixed fees for medical reports.

However I would like to see the insurance industry adopt a much more robust and tougher approach to claims management firms in order to fight and eradicate fraudulent claims with real action.

Ultimately this would mean placing a massive effort on fighting every spurious claim and to challenge the claims management firms head on. Many
of the ‘ambulance chasing’ companies who have benefited financially from fraudulent or exaggerated whiplash claims are now attacking new areas of claims, as the government and insurers close or restrict their historic areas of operation.

These include ‘stress’ triggered by a road accident or ‘deafness’ caused
 in the workplace by too much noise, together with other injuries in the workplace or at places of leisure and recreation.

The travel industry is the latest in the line of fire for claims management firms. Many British holidaymakers are now encouraged to make claims for illnesses and inconveniences, such as food poisoning. The tour operators and their insurers refund the tourists, but the costs will ultimately be passed back to the holidaymaker.

If we continue to let the claims
culture gather momentum, and believe that there is always someone to blame, there is a real danger it will eventually become out of control. The UK could then be at risk of replicating what has happened in the US, with soaring insurance premiums.

Social events, leisure and recreation facilities will all cost more.

It is therefore vital that, as a
country, we get to grips with the
claims culture, which is having a major impact on what individuals and business pay for their insurance premiums. In recent weeks, NHS England has announced that ambulance-chasing lawyers will be banned from working or advertising in NHS hospitals. This measure has been introduced to stop ‘no-win no-fee’ personal injury firms targeting patients inside hospitals across the UK.

There is no one silver bullet to eradicate the claims culture which
has tarnished British society, but a concerted effort by all will go a long way to put the brakes on the compensation culture.

Mark Barlow is managing director at Sheffield broker IFM Insurance.