Written evidence from Motor Accident Solicitors
Society (MASS) (CMI 18)
1. MOTOR ACCIDENT
SOLICITORS SOCIETY
(MASS)
1.1 MASS is a non-profit making national association
of solicitors who specialise in road traffic accidents, representing
the accident victim.
1.2 Formed in 1991, MASS promotes the highest
standards of legal services through education and representation
in the pursuit of justice for the victims of road traffic accidents.
1.3 MASS comprises 180 solicitor firms that employ
over 2,000 legal staff, throughout the UK. Collectively member
firms conduct in excess of 400,000 road traffic accident personal
injury claims each year.
2. THE COST
OF ROAD
TRAFFIC ACCIDENTS
2.1 Road accident personal injury (RTAPI) claims
represent 674,977 claims out of a total of 861,325 claims, according
to Compensation Recovery Unit figures published by the Government
in respect of the year 2009-10, which is over 78% of all personal
injury claims.[34]
2.2 On 30 April 2010, a new streamlined process
for RTAPI claims was implemented by the Ministry of Justice, with
the aim to improve the efficiency of claims up to £10,000,
where there is no dispute of liability. It is estimated that the
scheme covers in excess of 75% of all RTAPI. In conjunction with
this new process, the Insurance Industry participated with Claimant
representatives and the Ministry of Justice in round table negotiations
to agree a fixed costs regime. An agreement was reached with the
insurers as a result of this process.
2.3 Prior to that, Insurers were also engaged
in negotiations facilitated by the Civil Justice Council for a
Fixed Recoverable Costs regime for RTAPI claims, implemented in
October 2003. The figures for legal costs were agreed by Insurers
as a culmination of the negotiations which took place. The scheme
referred to covered RTAPI claims up to £10,000 of damages.
As for the scheme referred to in paragraph 2.2, this represents
an agreement with regard to an estimated number of RTAPI claims
in excess of 75%. (paragraph 2.2 above refers). Although it was
agreed that these figures would be reviewed annually, there has
been no review and therefore no increase in the legal fixed costs
agreed by the insurers. Furthermore, the costs agreed by Insurers
in April 2010 are lower than the costs agreed in 2003!
2.4 The Insurance Industry has consistently argued
that one of the reasons for high motor insurance premiums is due
to high and unacceptable legal costs. MASS finds this argument
extremely surprising given that since 2003 the Insurance Industry
has participated in, and agreed to, two separate fixed costs regimes,
for legal costs for RTAPI claims up to £10,000. This represents
in excess of 75% of all RTAPI claims since 2003.
2.5 Road accident claims have risen significantly
over the last nine years. MASS is of the view that this rise in
accident claims is more the issue for insurers than is the level
of legal costs for each claim on which they have negotiated and
agreed the legal costs which should apply. MASS would welcome
open and transparent disclosure by the Insurers to both the Transport
Committee Inquiry and to MASS so that the real source of any increased
cost can be properly identified.
3. UNINSURED
DRIVING
3.1 For over 15 years, MASS has been campaigning
against Uninsured Driving to protect the accident victim and for
a "zero tolerance" approach to be adopted.
3.2 In 2009 there were 1.5 million uninsured
drivers, 20% of whom were between 17 and 20. The cost to the industry
is approximately £500 million, which adds about £30
per year to every policy for the law abiding motorist.
3.3 MASS has campaigned for:
3.3.1 Increased Penalties - MASS has consistently
argued that the £200 fine for driving without insurance is
woefully inadequate (bearing in mind the high cost of insurance
premiums) and acts as little or no deterrent to those who fail
to adhere to the law for such offences which normally have a pattern
of criminality.
3.3.2 Effective Deterrents - MASS would
like to see the increased use by all Police Forces of the policy
to seize and crush vehicles for persistent offenders, along with
the use of Automatic Number Plate Recognition. MASS supports the
introduction of Continuous Insurance Enforcement (CIE), due to
be implemented in January 2011, as a further deterrent. However,
we have expressed our disappointment at the low and inadequate
penalty of £100 fine for committing this offence.
3.3.3 Education of Young Drivers - MASS
has for many years been involved in Young Driver Education and
believes this is a key element of combating uninsured driving.
3.3.4 Reporting - Combating Uninsured
Driving in the United Kingdom is currently down to Police detection
and through the new system of CIE. MASS also advocates a "helpline"
whereby the general public can use a dedicated number to report
a suspected uninsured driver, or if they have been involved in
an accident with an uninsured or untraced driver.
4. COMBATING
THE RISING
COST OF
MOTOR INSURANCE
PREMIUMS
4.1 MASS believes that the Insurance Industry
should and could do more to reduce the level of uninsured driving.
For example, to investigate the feasibility of lowering the cost
of insurance premiums for those young drivers who have a good
driving record whilst driving under their parent's motor insurance
policy, and allowing them to transfer the number of years without
a claim to their own policy.
4.2 Motor Insurers' Bureau (MIB) calls for a
levy from all its Members (all UK insurers) in order to pay for
uninsured and untraced claims. In 2009, the levy required was
£407 million, which was a reduction of £10 million from
the levy required in 2008. Claim payments for 2009 were £69
million less than the levy called, and £14 million less than
the amount paid in 2008. Consequently, in March 2010, the MIB
released £40 million back to its Members.[35]
5. SUMMARY
5.1 MASS questions why in 2010 motor insurance
premiums continue to rise when there has been in place fixed legal
costs which Insurers have agreed, for in excess of 75% of all
RTAPI claims since 2003.
5.2 The MIB's Annual Report and Accounts for
2009 makes it clear that there was a reduction of £10 million
of the levy called on the previous year and claim payments were
£69 million less than the levy called. Such was the MIB position
with regard to the levy that in March 2010 they released £40
million back to its members. This fact equally makes it surprising
why Insurers are not releasing money back to their policy holders
through reduced motor insurance premiums.
November 2010
34 Department for Work & Pensions Performance Statistics Back
35
Motor Insurers' Bureau Annual Report & Accounts 2009 Back
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