Archive for April, 2017


Wednesday, April 12th, 2017

New rules governing personal injury actions came into force on 1.4.2013. The changes meant that invariably the injured person would have to pay some of the legal costs from any compensation that they would recover. It was irrelevant that they were the innocent party.

The Insurance industry defended such steps with promises to the innocent motorist that these changes would allow them to reduce everyone’s car insurance premiums by £40 per annum.
Has your car insurance premium reduced? I suspect not.

The Insurance industry reasoning…..well that’s because of all of those nasty fraudulent motorists claiming injuries for accidents which either haven’t happened; in which there was no injury or indeed were made up in their entirety. This is why we couldn’t reduce the premiums.

And so to stop this once and for all more changes are planned with an anticipated start date of October 2018.

With a sense of irony for a country which prides itself on access to justice, this will only now be available for those suffering an injury IF you have suffered so severe an injury that the injury is worth more than £2000.

Any less an injury – even if you’ve lost earnings; incurred medical expenses suffered damage / paid for repairs – well I’m sorry but from October 2018 you will be on your own. You won’t be able to recover any legal costs back from the insurer for the person/company who caused you these problems even though it was probably not your fault. Solicitors may be able to help you if you want, but you will need to pay for that, probably from any compensation that you recover.

And the fraudsters – well they will also be sorted. No longer will “whiplash” injuries be dealt with like all other claims. The compensation you get for these injuries now will be lower than you would have got. This will stop them claiming. Are the insurers really that naïve?

“It will be worth it!” – shouts the insurance industry. If you do this we can get rid of those nasty fraudsters and we promise…we can reduce your insurance premiums – honestly!


The detail on the new rules has not even been written, let alone is the ink dry and lo and behold we already have significant backtracking from the insurance industry.

It is now anticipated that insurance premiums will not – as promised – drop. On the contrary motorists will see insurance premiums increase significantly over the next few months and by as much as £110 / annum. And don’t think if you don’t drive it doesn’t affect you. It is more likely than not that all premiums will increase including household and business premiums.

The reason – the drop in the “discount rate”.

The discount rate is the current method by which significantly injured people have their claims for future compensation assessed. The Insurance industry has benefited by millions of pounds in reducing the costs of claims for genuinely severely, injured people as a result of the discount rate being set far too high for at least the last 9 years. No benefit was passed onto policyholders in these lucrative years. Now that the Government have reduced the rate, the insurance industry disingenuously use this as an excuse for significantly increasing premiums, even though they themselves had expected a reduction in any event. The difference is that the rate has dropped lower than they thought. It is also irrespective of the fact that overall such claims account for probably less than 15% of all compensation claims.

The irony is that such increases in premiums are also highlighted now when in reality the insurance industry has flexed its muscles and have secured a review of how future claims should be compensated. The consultation on this is due to end in May 2017. The increases have therefore already been implemented before a final decision on the issue has been published.

And so….. Policyholders will find their premiums increasing and yet again we are reading of broken promises and excuses – all in the name of keeping the insurance industry shareholders happy.

For more information about the discount rate please read Annmarie Wilde’s Blog: The truth behind the increase in insurance premiums.