In the fact of the incoming Civil Liability Bill, we expect Claimants to adjust their tactics to increase the value of claims.
The Civil Liability Bill is intended to fight fraud by reducing the financial rewards which have followed whiplash claims. We expect Claimants to adjust their tactics to increase the value of claims, including adding on injuries that sit outside the definition of whiplash contained in the Bill in order to escape the tariff system introduced.
On that basis, we predict the most significant problem facing insurers in the fraud arena is likely to be claims inflation through either exaggeration or layering. That exaggeration is likely to be rooted in not just the inflation of special damages (vehicle repair costs / physio and CBT) but also in an increase in general damages.
Whilst the threats of claims incubation and special damage inflation are expected to become more ingrained and widespread, an answer for insurers has been provided via the successful deployment of Section 57 of the Criminal Justice and Courts Act and we expect that weapon to be used more and more frequently in the Defence of exaggerated claims.
The judgment of Mr Justice Knowles in LOCOG v Sinfield provided some much needed direction on how courts should consider the issue of fundamental dishonesty in the context of exaggerated claims, which has assisted both practitioners and the judiciary alike.
Those who are effectively able to deploy arguments using section 57 will likely find they have the benefit of a judiciary who are better educated and knowledgeable as to the issues involved in making these findings.
As part of the overall culture of deterrence against fraud, we also expect to see a rise in awards of exemplary damages against claimants. We foresee a similar rise in committal proceedings for contempt of court, as part of the overall trend of using all available means to deter fraudulent claims.
You can read the rest of our insurance predictions here.