The Association of British Insurers has proposed a new compensation process for all personal injury claims under £25,000 to enable claimants to seek compensation without going through a long and costly legal process.
The ABI says Care and Compensation proposes a fast and fair compensation system which puts the interests of genuine claimants first and tackles the problems of the current system, which is too slow and expensive.
In addition, the proposals would reduce the “massive” £2bn which goes each year spent on claimants' legal and other costs. An average of 93p is currently paid in legal and other costs for every £1 paid out in compensation claims under £5,000, suggests the ABI.
Specifically, the new compensation process would include:
- An easy-to-use claim form to enable people to submit their claim without the need for legal advice;
- A faster timetable which would give insurers only three months to accept or reject a claim; and
- A new public scale of damages which will set out compensation payments for specified injuries.
The proposals also contain measures to improve the availability and quality of rehabilitation:
- Tax incentives for employers to provide rehabilitation care, through a new rehabilitation tax credit;
- Extending the role of the Health and Safety Executive and the NHS to include promotion of rehabilitation; and
- A new code of best practice to improve responses to accidents and ill health in the workplace.
Stephen Haddrill, director general of the ABI, says: “Our proposals are a blueprint for much-needed reform of the personal injury compensation system. Too many people are waiting far too long to get a fair payout. This is because the compensation system is so adversarial.”
Haddrill says the focus on compensation gets in the way of people receiving rehabilitation care and while the Compensation Bill is a “positive first step”, much wider reform is needed to ensure the UK has a compensation system which “cares about the people it is set up to help”.
He adds: “Reform will enable insurers to provide a better service to policyholders and claimants.”
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