The cost of motor insurance - Transport Committee Contents


Written evidence from CTC (CMI 33)

INTRODUCTION

1.  CTC, the national cyclists' organisation, was founded in 1878. CTC has 70,000 members and supporters, provides a range of information and legal services to cyclists, organises cycling events, and represents the interests of cyclists and cycling on issues of public policy. CTC also provides 3rd party insurance to all its members.

2.  We welcome the opportunity to respond to this extended inquiry and strongly support proposals that the Committee addresses the issue of the liability of motor vehicle operators in crashes involving vulnerable road users.

REASONS AND CONSEQUENCES OF RECENT INCREASES IN THE COST OF MOTOR INSURANCE

3.  One obvious explanation for recent increases in the cost of motor insurance is that more claims are now being made, especially for incidents that are minor and unreported to police.

4.  The ABI suggest that 432,000 claims for whiplash alone were made in 2006-07, significantly up on previous years. Recent Reported Road Casualty Reports record huge self-reported injury rates from road crashes that are not recorded by police.i

5.  It may be that a combination of greater willingness to claim and driving behaviour deteriorating may be contributing to the increase in collisions. Alternatively the increase in vehicle safety technology may be leading to risk compensation on the part of drivers, meaning more shunts and bumps, leading to insurance claims without injury.

IMPACT ON YOUNG PEOPLE OF THE HIGH COSTS OF MOTOR INSURANCE

6.  CTC notes that levels of automobile use amongst young people, particularly men, has been slightly declining in recent years. The higher motor insurance may have contributed to this reduction.

7.  The fact that fewer young people are choosing to drive should not be seen to be negative. Young people are more likely to be killed on the roads than in any other means and the risk of being killed per trip for a 17-20 year old driver is nine times greater than for someone their parents' age (see figure 1 below). Although cycling is often perceived as being a riskier activity than driving, the risks young people are exposed to are lower for cycle trips than when they are driving.

8.  While reducing the ability of young people to access motor vehicle by making insurance more costly may not be equitable, the level of involvement in injury and death of young drivers suggests that any means of reducing their car use must be welcomed. Young people may well shift to healthier modes of travel, posing less risk to themselves and others.

Figure 1

RISK OF DEATH PER MILLION TRIPS: DRIVING AND CYCLING


PUBLIC POLICY IMPLICATIONS OF THE RISE IN THE COST OF MOTOR INSURANCE AND WHAT STEPS THE GOVERNMENT MIGHT TAKE IN RESPONSE TO THEM

9.  As above, CTC suggests that in part the rise in the cost of motor insurance may deter some people from driving. This is to be welcomed.

10.  We believe that insurers should offer pay per mile insurance, a concept that until now has only been trialled or implemented on a very limited basis. This would allow access to motor vehicle insurance to be lower for those who choose to use their cars less.

CHANGES TO MOTOR INSURANCE TO GIVE GREATER PROTECTION TO VULNERABLE ROAD USERS

11.  While most drivers are generally considerate towards cyclists and pedestrians, the fact remains that non-motorised users (NMUs) are more at risk of being injured on the roads, whilst posing far less threat to others.

12.  This imbalance could be corrected by introducing the legal presumption made by most west European countries that injured cyclists and pedestrians are entitled to compensation from drivers who hit them, unless the victim was obviously at fault.

13.  If a cyclist or pedestrian suffers personal injury or damage in a collision with a motor vehicle, they should be entitled to full compensation from the driver's insurance unless the driver (or in practice their lawyers/insurers) can show that the injury was entirely caused by the cyclist or pedestrian behaving in a way that fell well below the standard that could be expected of them, taking account of their age, abilities and the circumstances of the collision.

14.  The cyclist or pedestrian should also be entitled to proportionate compensation even if they were partly at fault.

15.  Particularly vulnerable people (eg children, the elderly, people with learning difficulties or physical disabilities), should receive compensation from the driver's insurance automatically, unless they evidently wanted to harm themselves.

16.  We do not believe that this system would inevitably lead to an increase in the costs of insurance.

What's wrong with the current system?

17.  Cyclists and pedestrians are:

  1. ¾  most at risk on the road network;
  2. ¾  least likely to be at fault in a collision with a motor vehicle; and
  3. ¾  pose far less danger to others.

Yet it is usually much harder for them to claim compensation for injuries they sustain. Reasons for this include:

18.  The burden of proof lying with the injured cyclist/pedestrian: as explained below, cyclists are more likely to be the injured party in collisions with motor vehicles, but less likely to be at fault. In order to gain the appropriate amount of compensation, they have to prove that the driver was negligent, has committed a tort (a breach of duty leading to liability for damages) and/or a criminal offence and, as such, was wholly or partly at fault. This is a costly, complex and time-consuming process;

19.  Injured cyclists/pedestrians are less likely to be good witnesses in court: given their greater likelihood of injury, cyclists and pedestrians are far less likely to recall what happened with the clarity needed of a "good witness" in court. This regularly leads to grave injustice, far more serious than anything that could possibly result from reversing the burden of proof.ii

20.  Injured cyclists/pedestrians don't have as much financial support: motoring organisations and insurance companies have, in effect, limitless funds for employing lawyers etc., whereas most cyclists (especially those who are not members of a cycling organisation like CTC) do not. This puts many injured cyclists at a significant disadvantage;

21.  Cases take extended periods to resolve: typically it takes a long time to resolve personal injury cases - even with a solicitor, they can span four or five years. Compensation, for example, can depend on the severity of injury, which may take a while to confirm and require an interim payment and then further payment when diagnosis is more certain—naturally, insurance companies will always pay as little as they can at any time.

22.  The need to correct for imbalances in power or vulnerability is already recognised elsewhere in law, and elsewhere in Europe—indeed, the system of civil compensation for personal injuries to NMUs in England is one of the least favourable.iii

23.  In many European countries, the bigger vehicle is presumed responsible or motor vehicles are held strictly liable for injuries to NMUs. In France, Belgium and the Netherlands, liability for personal injury damages to NMUs rests with the driver, unless they can show that the NMU acted in a way that was clearly illegal and/or seriously negligent.

24.  The principle that a defendant is 'innocent until proven guilty' is not completely enshrined in matters of liability relating to road traffic incidents. Drivers are generally held to be liable if they run into the back of another vehicle, even if the driver in front braked sharply or without warning. This is because drivers are expected to drive at a safe distance - just as they should be expected to exercise a high degree of care around NMUs, allowing for unexpected or erratic movement by them. In the case of Russell v. Smith (2003) it was established that even if children were deemed to be entirely 'at fault', compensation must still be awarded.

25.  Common law on tort liability allows for the theory of res ipsa loquitur ("the thing speaks for itself"). Basically, this means that if it is circumstantially obvious that a claimant did nothing wrong, and that the incident must have resulted from negligence, it follows that the party who caused the harm must have acted negligently.

26.  Provisions for imbalances in power or vulnerability are made in areas of the law such as consumer protection, employment contracts, public and employee health and safety (eg legislation places primary responsibility for employees' safety on employers).

27.  A presumed entitlement to compensation would have the following benefits:

  1. ¾  The law would reflect the fact that NMUs are far more at risk of injury than motor vehicle occupants (see above).
  2. ¾  It would reinforce the message that drivers should exercise a high degree of care towards NMUs, promoting more cautious driving and leading to fewer crashes.
  3. ¾  An injured NMU would find it much easier to obtain compensation following a collision with a motor vehicle.
  4. ¾  Reversing the burden of proof transfers any injustice arising from failures in evidence from the innocent victim to the innocent driver. The latter only risks losing their no claims bonus, whereas under the current system the victim risks being unable to claim compensation even if maimed for life, simply because their injuries have left them unable to provide evidence that the driver was at fault.

28.  It would (should) not mean:

  1. ¾  That NMUs are given "carte blanche" to act irresponsibly - CTC would not support it if it did.
  2. ¾  Any change to the criminal law principle that the defendant is innocent until proven guilty, any more that it would mean that drivers would be automatically criminalised if they collide with a NMU. Our proposal would only affect civil liability compensation cases.iv
  3. ¾  That the law would be introducing a divisive or unfair arrangement: most drivers walk and cycle too. It would simply reflect the fact that when people choose to walk or cycle, they are more vulnerable than drivers who put them most at risk.
  4. ¾  A significant increase in insurance premiums or motoring costs. It is more than likely that a change in compensation rules would lead to safer driving, hence fewer collisions and, in turn, reduced payouts. Also, the proposal would reduce the necessity for much of the costly litigation that currently takes place - and for which drivers ultimately pay.

29.  We ask the Committee to take note of these points, even if they are not directly relevant to the exact terms of the current inquiry.

CTC, the national cyclists' organisation

December 2010

REFERENCES

i ABI, Tackling Whiplash: Prevention, Care, Compensation, 2008.

ii To give an example: the injustice suffered by a child who cannot claim damages despite being maimed for life by a dangerous driver, because s/he cannot provide adequage witness evidence that the drive was at fault, is far greater than the injustice that an entirely blameless driver might suffer in the reverse situation—this would usually be no more than thej loss of a no claims bonus.

iii Groutel, Hubert. The Compensation of "Vulnerable" Road-accident Victims. Academy of European Law, Trier, 2001.

iv In 1999, the Environmental Law Foundation published Optuions for Civilising Road Traffic, which sets out the arguments for and against changing the operation of road traffic law both iln terms of criminal and civil liability, for the better protection of NMUs and promotion of the message that drivers bear primary responsibility for road safety.



 
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