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January News Roundup

The final report of the Insurance Fraud Taskforce sets out hard-hitting recommendations for the government. However, while many insurers have welcomed the findings, they have been less well received by the claimant community…


Taskforce’s clampdown call brings mixed reactions


After more than 12 months of deliberation the Insurance Fraud Taskforce says more must be done by insurers, solicitors and regulators to reduce fraudulent claims.


Its report published in January 2016 called for wide-ranging reform of the personal injury sector to reduce insurance fraud, along with the Solicitors Regulation Authority and claims management regulator raising their game to combat fraudsters.


Its authors called for insurers to defend more claims and tackle inappropriate pre-medical offers, while another controversial recommendation is the reduction of costs if PI claims are made later than six months after an accident.


Insurers hail recommendations as way forward


The report found favour among many insurers, especially its recognition that tackling insurance fraud is a complicated challenge.


Among its supporters was James Dalton, Association of British Insurers general insurance director. He was quoted after its publication saying: "The industry will do whatever it takes to protect honest customers from the dishonest minority.”


Further backing came from Aviva UK claims director Rob Townend, who sat on the personal injury working group. "The taskforce's recommendation of a fixed recoverable costs regime for NIHL cases should also be applauded," he said in a statement.


Axa Group global chief fraud control officer Richard Davies also praised the report, although he was concerned it may not go far enough. "The taskforce could have been more radical in some respects and I hope this doesn't turn out to be a missed opportunity,” he said. “But, to be clear, having the focus and the weight of government in tackling insurance fraud is very much welcome."


Lawyers left frustrated


Unfortunately the report has not impressed personal injury lawyers, with many reacting angrily to its recommendations.


Jonathan Wheeler, Association of Personal Injury Lawyers’ president, accused the insurance industry of ‘hijacking’ the taskforce and expressed disappointment at its recommendations.


Wheeler reportedly said: "I was involved in some very valuable discussions in the taskforce's PI working group around fraud.


“It is then all the more disappointing that the outcomes of those discussions were seemingly not taken seriously by the taskforce; that the taskforce went far beyond its remit in its approach to issues such as the small claims limit and its recommendations to effectively cut legal representation for people whose claims are brought more than six months from the date of an injury."


Law firm identifies differing perspectives


The recommendations brought a more measured response from law firm Kennedys. The firm said: “Many of the recommendations aim to demystify data sharing and encourage collaboration and engagement in data sharing solutions to detect fraud. Being better equipped to fight fraud has many positive outcomes.”


However, Kennedys’ also took a more pragmatic approach: “In practice, such ideology needs to be balanced against the reality that many insurers operate on a case-by-case commercial basis where fighting fraud may not make economic sense – not least due to the foundation of fixed costs reforms that supports such an approach.”


Government will act, say ministers


Nonetheless, ministers are broadly happy with the report and have announced their intention to take an even tougher line against insurance fraud.


Economic secretary to the Treasury Harriett Baldwin told Post: "These recommendations will galvanise our collective efforts to tackle insurance fraud, and will ultimately reduce costs for consumers."


Minster of state for justice Lord Faulks added: "As the report notes, the government has already brought forward significant reforms to the way in which claims are dealt with and we will continue to take more action to drive down premiums for hard-working people."