It is clear to anyone and everyone that the Government is currently massively distracted. The last few months have seen lots of infighting - firstly over the Budget (resulting in IDS’ resignation), but more recently and conspicuously over Brexit. This has meant that work on the policy front is at almost a complete standstill.
However, it has recently been made abundantly clear that there is no inclination to retreat from the commitments set out by George Osborne in his Autumn Statement last November. Just a few weeks ago, the Justice Minister Lord Faulks confirmed at the annual APIL conference in Birmingham that the Government is still fully committed to its reform and plans to publish the consultation after the EU referendum on 23 June.
He confirmed that 2017 was still on the cards in terms of implementation; the Government’s original timetable of April 2017 seems to have fallen away, but “2017” nevertheless indicates ambitious timing. The political driver of reduced insurance premiums was reiterated by Lord Faulks:
“We will be monitoring the effect of the reforms on the price of insurance and will consider further action if the premiums do not reflect reduced costs”.
Predictably, APIL members reacted cynically. His response was to say:
“I can hear the scepticism but it is a market. It is in the interests of insurance companies to attract customers, therefore they will have a significant incentive to reduce premiums.”
Hardly surprising. However, the suspicion that insurers are keen for this reform so that they can line their own pockets crops up regularly – not just from the claimant community, but from parliamentarians too.
This message is one that insurers need to counter loudly and publicly. Parliament needs to be convinced that it is in the public interest to give these reforms their two thumbs up. The Government may be keen to see this through but, because of the primary legislation element, support from backbench MPs and Peers is crucial.
“Reform for the Greater Good” – this is the message that the industry needs to get across. The notion that genuine claimants with compensable injuries should be protected, but that a minimal and insignificant level of discomfort is acceptable in the context of a system that is heavily abused.
It might not – on the face of it - sound as attractive as the claimant lawyer’s access to justice argument. But this is about frivolous claims being paid for by every premium paying customer. This is about the “have a go” culture that we are reminded of every time we take a call from an unknown number. This is about claims that – 30 miles across the English Channel – simply aren’t entertained.
It is important not to conflate fraudulent and frivolous claims. So much progress has been made to combat fraud – all very encouraging. But this work cannot address the current problem. The Government has recognised that more needs to be done. Their task – and one which the insurance industry must help them with – is to convince Parliament to agree.
The Keoghs Market Affairs team is continuing with its well-established proactive approach to MP/Lords engagement. If you would like to know more about our parliamentary engagement programme, please get in touch with one of the team.
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