Kerry Underwood


with 17 comments

Less than three months to Jackson Day and the Ministry of Justice is disintegrating.

On 11 December 2012 it published a consultation paper , with consultation ending on 8 March 2013, entitled

“Reducing the number and costs of whiplash claims”

The Foreword is Orwellian. Witness this paragraph:

“With every fraudulent and every exaggerated insurance claim that goes unchallenged the premium of each motorist increases. Insurers estimate that the cost of whiplash claims from road traffic accidents, which comprise 90% of relevant personal injury claims, to the average policy-holder is £90 per year. This is not a victimless problem.”

Note the non-sequitur, that is the mention of fraud followed by the saving if ALL claims, including the overwhelming majority which are genuine, are barred.

The consultation is predicated upon three obviously false assumptions
(1) Insurers cannot afford to defend fraudulent claims (Paragraphs 8, 10, 24, 26, 29, 58, 59, 63)
(2) Doctors are liars or at best incompetent (runs right through the report – Foreword, Paragraphs 3, 6,
19, 21, 24, 25, 31-45)
(3) Judges are incapable of trying cases and deciding against fraudulent parties (Foreword, Paragraph 24)

The Government presents two options for change:
1. Raising the small claims limit to £5,000 for just those road traffic accident involving whiplash
2. Raising the small claims track limit to £5,000 for all road traffic accidents.

No-one should respond to this consultation; that merely validates the Ministry of Truth and will make no difference anyway.

The Government recognizes that Option 1 would add further complexity by creating early arguments over the classification of the injury.

Thus the most likely outcome is an increase in the small claims track limit to £5,000 for all road traffic accident claims.

The Government, bizarrely, believes that the small claims track procedure is more suitable for dealing with claims involving alleged fraud.

Paragraph 60 “Consequently the Government in consulting on options that would bring more PI or whiplash claims arising from RTAs into the small claims track, thereby providing a better framework for the challenging of fraudulent or exaggerated claims.”

See also Paragraph 63: “The intended result of an increase to the limit would be to allow more relatively straightforward cases to be heard in the Small Claims court with the additional benefit of making it more economic for insurers to challenge fraudulent and exaggerated claims. The Small Claims track is a less costly regime in which to bring a case, and therefore a less costly one in which to challenge questionable whiplash injuries.”

The Government recognizes that without costs recovery claimants are more likely to represent themselves in the small claims track. (Paragraph 66, 68).

So there we have it. It is the stated policy of the Ministry of Justice to have, in the small claims court, self-represented claimants dealing with allegations against them of fraud made by insurance companies who will no doubt be represented by lawyers, something fully recognised by the Ministry (Paragraph 66).

Am I alone in thinking that every Judge in every court in the land will allocate such a case to the fast-track, or even the multi-track?

The consultation comes just 22 days after the separate consultation on new Fixed Recoverable Costs, published on 19 November 2012, including new figures for road traffic accidents up to £5,000.

At paragraph 79 of the current document the Ministry states:

“…the Government has announced the intention to extend the RTA Protocol (sic) by April 2013 to include claims up to £25,000, and to incorporate employers’ and public liability accident claims.

(The Minister means the Portal, not the Protocol. Protocols for all personal injury matters have been in for years).

On 21 December 2012, that is just 10 days after this paper was published the Government announced a delay in the portal changes, presumably because of the Judicial Review proceedings. Note that the Government is proposing to make such Judicial Review proceedings very much harder to bring.

So the timeline is:

19 November 2012 – Proposal for new Fixed Recoverable Costs including £1,000 – £5,000 band for road traffic accidents, for all matters not in the new portals.

11 December 2012 – Consultation on raising small claims limit, taking into account portal extension from April 2013, which would render pointless the above band proposed just 22 days earlier.

21 December 2012 – Portal extension delayed

That is three changes of policy in 32 days.

This is not a victimless solution. All of those genuine victims of road traffic accidents risk losing out. I have suffered whiplash; it hurts and it restricts normal social and sporting activity and it is long-lasting.

I am as against fraud as anyone and support lengthy prison sentences for those found guilty, but to restrict access to courts to all innocent people is absurd and wrong.

Getting rid of the, say, 10% of fraudulent claims may save £9 a year on a typical insurance premium. Insurers have not spent millions on contributions to the Conservative Party to achieve that. How strange that Her Majesty’s Government believes that insurance companies, with the most vested interest of all, are better able to judge fraud than Her Majesty’s Judges.

Why not get the Norwich Union to run the Old Bailey?

It follows as night follows day that the cost to insurance companies of successfully defending a claim in a costs-bearing track is less than in the small claims track as the insurance company recovers most of their costs from the claimant.

If the problem is claimants standing to win and recover costs, with the poor old multi-national insurance company unable to afford to defend the claim, where does Qualified One Way Costs Shifting fit in?

This is about slashing genuine claims so as to make more profits for insurance companies.

The irony is that it will almost certainly have the opposite effect.

Freed from depending on legal fees payable by defendants’ insurance companies, solicitors will switch to contingency fees and be far better remunerated, so firms like mine who have abandoned such work will return to the fray, so expect an increase, not reduction, in claims.

Also the political pressure on an incoming Labour Government to create a state insurance company is growing and will continue to grow.

Even if I am wrong about all of that, what is the point of insurance companies who do not insure anything? These lovers of the free market conveniently forget to mention that their role is wholly dependent upon the fact that motor insurance is compulsory, a gross interference with the free market.

Some clear, logical, coherent, consistent thought from the Ministry of Justice would be most welcome. Prentice, Djanogly and now Grant. What have we done to deserve this?

I too survey that endless line
of men whose thoughts are not as mine

A. E. Housman – A Shropshire Lad

Please see my related blog:-


Written by kerryunderwood

January 4, 2013 at 12:37 pm

17 Responses

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  1. Masterful piece Mr Underwood. Well said.

    Mark Flynn

    January 4, 2013 at 1:03 pm

  2. Brilliant Kerry

    From: Kerry Underwood <> Reply-To: Kerry Underwood <> Date: Fri, 4 Jan 2013 12:38:06 +0000 To: Andrew Wigmore <> Subject: [New post] PERSONAL INJURY SMALL CLAIMS LIMIT AND THE MINISTRY OF TRUTH

    kerryunderwood posted: “Less than three months to Jackson Day and the Ministry of Justice is disintegrating. On 11 December 2012 it published a consultation paper , with consultation ending on 8 March 2013, entitled Reducing the number and costs of whiplash claims “

    Andy Wigmore

    January 4, 2013 at 1:35 pm

  3. Very well written, “Why not get the Norwich Union to run the Old Bailey?”, a personal highlight.

    The insurance companies love to play the victim, they are selling a compulsory product which just months ago increased in price for female drivers for no statistical reason. I’m sure that extra profit will not be used to reduce the costs of premiums.

    Jamie Cottle

    January 6, 2013 at 8:21 am

    • Thank-you! Watch Channel 4 tonight at 8.00 pm : Dispatches : how motor insurers’ malpractices cause premiums to rise. I hoe that Mr Cameron and Ms Grant watch it, and then stage a Citizens’ summit followed by a consultation paper on how to stop the motor insurers conducting themselves in this way. Amazing that the Ministry of Justice has based a central part of Government policy on the say so of these companies without any due diligence. Well of course it is not amazing; it is entirely predictable.


      January 7, 2013 at 8:39 am

  4. Bard….see if my comment made it…..seemed to disappear at my end

    Andrew Twambley

    January 7, 2013 at 7:47 am

  5. Excellent article, you’ve hit the nail on the head.

    As Jamie said in the comments, car insurance is compulsory and the companies will think of a number of ways to increase premiums for ‘our safety’. It’s highly unlikely that the extra profit will go to reducing premiums, instead premiums will rise as more and more people claim for damage and injury caused by potholes. It’s a viscous cycle!

  6. Dear Kerry

    Good article again.

    There is much rumour that the MOJ will not just restrict the increase in the SCL to RTA cases but across the board to include all Personal Injury matters. Is that what you have heard? Is the report following the consultation due 1st October 2013?

    Kind Regards

    Ged Adamson

    Ged Adamson

    July 17, 2013 at 11:55 am

    • Dear Ged

      Thanks. My view is that any increase in the Small Claims Limit will indeed be for all personal injury work, and not just road traffic matters and that the increase may well be to £10,000, rather than £5,000. You will see that the just published Fixed Recoverable Costs have bands of £1,000 to £5,000, then £5,000 to £10,000 and then £10,000 to £25,000, thus making it easy to raise the limit to either £5k or £10k.

      With everyone charging 25% of damages, the pressure is off, especially if that is lifted to 35% in small claims cases.



      July 17, 2013 at 12:36 pm

      • Hi Kerry

        Could you clarify what you mean by saying ‘with everyone charging 25% of damages the pressure is off please’- are you saying that post small claims rise we will simply go onto a US style contingency fee agreement with clients? I think you may have referred to this when I saw you in Harrogate a few months ago?

        Francis O'Neill

        July 24, 2013 at 9:27 am

      • Yes, but probably charging 35% or 40%, rather than 25%.



        July 24, 2013 at 9:43 am

      • I can see that definitely- but my thought is aren’t insurers likely to be offering their direct to punter cut price settlements with no deduction whatsoever and hence cut out potential work coming our way? And if this is the scenario is it a case of convincing the claimant that they are likely to be short- changed by doing so as per the recent Law Soc campaign? (Don’t get mugged by an insurer etc..)

        Francis O'Neill

        July 24, 2013 at 9:53 am

  7. Third Party capture is bound to be made illegal at some stage. The very obvious answer is a compromise agreement system for personal injury, exactly as it operates in employment matters and I do not believe that reputable insurers would object, but no doubt some aspects of the claimant personal injury lobby would.

    Compromise agreements work exceptionally well and encourage sensible offers to be made early on, something which would benefit claimants, but not necessarily claimant lawyers.


    July 24, 2013 at 11:27 am




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