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It was reported that a 47 year old female received £924,340 following injuries from a road traffic accident in 2001.
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The accident was due to an uninsured driver, who was on the wrong side of the road and therefore collided with the taxi that the defendant was a passenger in.
The award was due to multiple injuries, for which she had to undergo extensive reconstructive surgery, with subsequent complications. Prior to the accident she was also in line for a higher position within her job, including an enhanced package with all of its associated benefits.
15 per cent was deducted from the overall amount, due to the fact the claimant was not wearing her seat belt and so was deemed contibutorily negligent.
The claimant's solicitors believed that the case was the first time that the new discounting system of the 6th edition of the Ogden Tables had been adjudicated upon.
The claimant’s case was brought against the uninsured driver and Motor Insurers’ Bureau.
Whilst results from the Fourth UK Bodily Injury Awards Study confirm that total costs of bodily injury claims paid by UK motor insurers have risen over the past decade at 9.5% a year between 1996 and 2006. It is acknowledged that the rising cost of claims has resulted from various legislative and legal changes, including the introduction of insurers having to routinely reimburse the NHS for the cost of treating motor bodily injuries. The maximum repayment limit increasing by 1200% - from £3000 for accidents before July 1997 to £37,100 after April 2006.
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This has also been influenced by increased life expectancy in calculating compensation and growing amounts awarded to fund care regimes. Possible changes to the law on damages and an increased take up of periodical payments could both lead to further claims inflation in the future. The cost of medical treatment has also risen faster than average inflation.
Stephen Haddrill, Director General of the ABI, said:
"These figures underline the urgent need for reform of personal injury compensation. Genuine claimants need to get their compensation and have access to rehabilitation more quickly. Key to achieving this is reducing legal costs, which now account for 10% of every motor premium. The Government needs to implement its reform proposals quickly so that the genuine claimant is placed at the heart of a streamlined, cost-effective process"
Other findings from the Fourth UK Bodily Injury Awards Study include:
• Legal costs funded by insurers have continued to rise much faster than National Average earnings. Insurers pay lawyers 43 pence for every £1 of compensation that goes to claimants.
• A growing use of rehabilitation by insurers has gone some way to helping control the cost of claims, but rehabilitation is still far from being a routine part of the bodily injury claims process. An updated version of the Rehabilitation Code was recently published by IUA and ABI providing an approved framework for claimant representatives and compensators to work together.
• The speed of settlement of claims above £100,000 has increased substantially to the benefit of claimants and insurers alike.
• Uninsured driving costs around £500 million a year or around £30 for every motor insurance policyholder.
The Fourth UK Bodily Injury Awards Study is the biggest exercise of its kind ever undertaken, involving analysis of two million claims over a decade. It investigated trends in motor insurance injury claims in the UK and the key legislative and legal developments affecting them. More than 20 motor insurers supplied data for the research, focussing primarily on private car business and representing over 90% of the industry’s bodily injury claims for 2005 and 2006.
For further information on the study call:
International Underwriting Association
Tel: +44 (0)20 7617 4449
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