The Select Transport Committee said Chancellor George Osborne only consulted with the insurance industry rather than the victims of motor accidents. The Law Society believes UK’s disadvantaged cannot have access to proper legal counsel with the lower claims amounts.
Chancellor George Osborne announced in his Spending Review that the UK’s insurance industry is losing £2bn to fraudulent and exaggerated injury claims. About £90 is added to a motorist’s insurance premium to address the expense.
Osborne proposed to increase the small claims court’s limit from £1000 to £5000. This would address all complaints, including minor soft tissue injuries.
The Law Society President Jonathan Smithers said many soft tissue injuries in car accidents include facial scarring, which is valued above £5000. This guarantees an unfair disadvantage to insurers, who could call on legal representatives to challenge a claim at any time.
However, the insurance industry finds it more convenient to pay out for the injuries rather than hire legal representatives to probe their numerous claims, according to an insider.
According to Steve Cornforth, a Senior Partner at EAD, Osborne has believed the lie of the “compensation culture”. He said media and the insurance industry itself had hyped the latter.