My Lords, I repeat my declaration of interests made at previous stages of the Bill. The noble and learned Lord, Lord Woolf, and others have advanced powerful arguments in favour of protecting the entitlement of those genuinely injured who seek compensation for whiplash. Coming from such a distinguished source, these arguments clearly demand a great deal of respect around the House. It is therefore—to adopt a phrase used by judges—my misfortune not to agree with the noble and learned Lord’s amendment. The noble and learned Lord, Lord Brown, referred to the fact that judges from time to time decide matters of policy and relied on the case of Caparo and the fair, just and reasonable test. It is of course for Parliament to decide fairness, justice and reasonableness, and it should approach this problem with that in mind.
It is undoubtedly true that some genuine claimants who have sustained whiplash injuries will be entitled to rather less than they would have been if the Bill becomes law, but we need to stand back and consider the policy driver behind these changes. At Second Reading, the Minister pointed out that there has been a 70% rise in 10 years in the number of road traffic accident-related personal injury claims. Of these, 85% are for whiplash-related injuries. In 2016-17, there were 670,000 whiplash claims—it is rather surprising that anybody gets into their car at all—yet we know that we have more of these injuries than any other European jurisdiction notwithstanding the considerable improvement in standards of road safety in this country and the adoption of neck restraints and the like. All this costs motorists and consumers a great deal, and the cost of premiums falls particularly harshly on those who live in rural communities and have to drive cars and on the young, who may find it difficult or impossible to pay premiums.
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Some of your Lordships may have suffered a whiplash injury. I declare an interest as having done so, many years ago. A car ran into the back of mine—I assure noble Lords that I was not part of any cash-for-crash scam. It caused considerable damage to the back of my car and some pain and discomfort in my neck for a few weeks, together with a little jumpiness in cars for about a month, particularly when I was stationary. There may be other noble Lords who have suffered whiplash injuries, but I suspect that almost none has escaped an invitation to take part in a claim, even though they have not in fact been involved in an accident. Such cold calling, by telephone or text, is a source of real irritation and I know that the Government are trying their best to stop it. Can there be any real doubt that there has been a widespread abuse of the system?
My noble friend Lord Hunt referred to the Chancellor of the Exchequer, in an Autumn Statement, announcing the possibility of there being no damages at all for pain, suffering and loss of amenity in relation to whiplash. This Bill is more generous; it allows for a tariff. That is only for the conventional sum; there will still be compensation for loss of earnings and for any medical expenses. The intention behind the imposition of a tariff is to at least reduce the incentive for false claims, and increase the likelihood of settling these claims. As we will debate on subsequent amendments, insurance companies generally have welcomed these reforms and promised to reduce premiums. I agree that they should be kept to this promise. However, it would be wrong to regard the Bill simply as a sop to the insurance industry. It is frankly offensive to society as a whole that this sort of abuse is allowed to continue.
If there was to be a reduction for really serious injuries, I can imagine why noble Lords would baulk at the imposition of a tariff. However, we are for the most part talking about pain and discomfort of a relatively transient nature, such as might be occasioned in all sorts of sporting or domestic contexts without any compensation being involved at all. So these reforms—quite modest though they are—are a proper response to what I would describe as a racket. Simply to say that judges can sort these matters out and that some genuine claimants will be deprived of as much compensation as they would have got before does not take sufficient account of the nature and scale of the problem.
Is this an overreaction? Should the Government not have done more before proceeding to the tariff? These reforms do not come out of a clear blue sky. It was Jack Straw, of the party opposite, who first identified the problem with whiplash reforms. The LASPO Act, which the noble Lord, Lord McNally, will remember very well, attempted to get control of some aspects of the compensation culture. Then there was the fixing of the costs of whiplash medical reports and attempts to establish independence by the MedCo system. The Criminal Justice and Courts Act 2015 banned inducements and introduced the fundamental dishonesty test, which has been remarkably successful, although I remember that the noble Lord, Lord Beecham, disapproved of it at the time. We have heard the commitment in the Conservative manifesto to tackle fraudulent whiplash claims to reduce premiums.
These changes will not solve all the problems that exist in this unattractive field at a stroke. The Government have spoken of a response at a number of levels, including better regulation of claims management companies and further control of cold calling. However, if we exclude the bulk of the Bill, as these amendments will, we are not reflecting public disquiet. Insurance companies have done much more than they are given credit for, on fraud and following up fundamental dishonesty.
Other amendments in this group, particularly those suggested by the noble Lord, Lord Marks, seem, with great respect, to be the worst of all worlds. They seek to hard-wire the Judicial Studies Board guidelines into the Bill and then provide some exceptions. As the noble Earl, Lord Kinnoull, pointed out, they are not
necessarily reflective of an average award, for the reasons that he gave. Indeed, they are guidelines—the clue is in the name—and they should not form the basis of a tariff.
Should we leave this to the judges? I have the greatest respect for judges—the noble and learned Lord, Lord Woolf cited what Lord Justice Jackson said about the role of judges—but one of the problems is that judges rarely see these cases. This is the murky world of grubby claims preyed on by a number of parasitic organisations which have created an industry. We can go on agreeing that there is a problem and restating the problem but these reforms will not drive it away—it will spring up elsewhere—but if we wreck this part of the Bill we will be failing to acknowledge the racket and walking by on the other side. Premiums for our children and grandchildren will continue to rise and our necks, collectively, will remain the weakest in Europe.