As a kid, one of my favourite shows was Take Your Pick with Des O’Connor. It was a simple concept where prizes of varying degrees were hidden behind numbered boxes, and the host offered cash in return for walking away without winning the contents of the box.
The unlucky contestants would take the money and miss out on a holiday, or turn down a small fortune and win a knitting needle. The best outcome was to turn down the money but win a Ford Fiesta.
The Civil Liability Act 2018 was not Take Your Pick (sorry to break that to you). There were no surprises, no guesses and (in theory) no booby prizes. Contestants (Joe Public) in theory had to give up a few piddly little legal rights that probably only benefitted the ambulance chasers anyway, and in return they’d get a guaranteed reduction in their car insurance.
And not just any reduction, but a cool £35 a year. This was no empty promise; it was set out in black and white in the Ministry of Justice press release right here.
The result has been predictable in almost every way. The tariff for setting compensation for RTA injuries lasting up to two years sets damages levels lower than before the act.
The portal set up (and run by the insurance industry) to process claims valued under £5,000 has faltered to the point where cases are taking more than a year to settle. The idea of easing lawyers out of the claims process by creating a portal user-friendly to litigants in person has been quietly forgotten.
Meanwhile, the number of claims themselves has fallen drastically. Motor injury claims dropped to the lowest ever recorded in the third quarter of 2024 and were 11% down on the year before. Over the year as a whole, motor claims are down 57% on their 2010s peak.
Interestingly it is not just motor claims that have been affected: employers’ liability and public liability claims are also down by 44% and 19% respectively from 2019/20. Could the inevitable exodus of firms from motor claims have also affected the pool of lawyers who are prepared to take on non-motor accident claims? If so, the benefits start to look counter-productive.
And what of that £35 pledge? Are we really feeling the effect in our purses and wallets? Categorically – and based on insurers’ data – the answer is no.
The Treasury yesterday published data from 30 insurers showing that over the three years following the reforms, motorists each saved a total of £31. By 2022/23 the average saving was £15 – not £35.
Meanwhile, insurers have collectively saved £198m in costs and the proportionate rate of saving (7.8%) far outstrips the fall in insurance premiums (4.18%).
The Ministry of Justice demonstrated rank indifference to the fact that savings are not being passed on at the same rate as they are accumulated, writing a 43-word analysis concluding the act was doing what it set out to do.
The motorist would surely not be as convinced if they knew the reality. Trade in your legal rights and access to decent compensation for (at best) an extra £15 a year? Given that option, you’d surely tell Des O’Connor to go swivel.
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