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Ellman calls for car insurance working party15 Nov 2011by Emma Jamieson Louise Ellman, MP (pictured), Chair of the Transport Select Committee, who has presided over the Committee's enquiry into the high cost of motor insurance in this country, has told MPs: "I hope the  Government can agree
to setting a cross-departmental working party up so that insurance
premiums can become affordable and the growing outrage of people forced
to pay extortionate rates can be addressed."Referring to the AA's 'shop around' car insurance price index, she pointed out that premiums had doubled since 2006 and she blamed car insurance fraud and claims management firms for the high cost of motor insurance. She also quoted a figure of £80 per policy as the cost of fraud, consistent with the AA's estimate, and reminded MPs that the cost of car insurance had been rocketing despite marked improvements in road safety with dropping numbers of injuries and road deaths. Consistent with evidence provided by former Labour Home Secretary and current car insurance compaigner, Jack Straw, to her Committee, as well as other witnessses to the motor insurance hearing, she stressed that claims management companies encourage claims and warned that they would likely find ways around a referral fee ban. Certainly, with the advent of Alternative Business Structures (so-called 'Tesco law') to the delivery of legal services in this country, by becoming part of a unitory business, claims management firms could get around a referral fee ban or they could be paid item of service fees for work done, something that the current Government proposals would allow, albeit with a cap on the sum payable. Her intervention follows Jack Straw being given leave to introduce his Motor Insurance Regualtion Bill to Pariliament in January 2012. Straw's Bill is intended to curtail the sharing of accident victim details, render the claims industry less lucrative for its operatives, and raise the burden of proof in whiplash claims. It was largely as a result of Mr Straw's interventions that the Government was forced to reconsider its stance on referral fees, leading to the current plans to ban them in addition to introducing all the other key Jackson Report recommendations intended to reduce legal costs in litigation. That Ellman has called for a cross-departmental working party to address the high cost of car insurance is an acknowledgement of the complexity of this issue and that the Home Office, Ministry of Justice and Department for Transport all have a role in operationalising numerous necessary changes that will act to control the cost of car insurance. It won't be easy. Related articles: Jack Straw's Motor Insurance Regulation Bill proposals Jack Straw: Car Insurance 'parasites' cost motorists £2bn Djanogly: Referral fees are a 'symptom of a sick suing culture' Ken Clarke Jackson white paper - Insight and Opinion |
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