Care and Compensation
17 Jan 2006
Care and Compensation: ABI launches plans for reform of UK compensation system
Compensation payments to arrive much faster under ABI proposals.
The time taken to settle the average personal injury compensation claim would fall from three years to just six months under proposals announced today by the ABI (Association of British Insurers). The provision of care and rehabilitation for ill and injured people would also be significantly increased.
Care and Compensation proposes a fast and fair compensation system that puts the interests of genuine claimants first, and tackles the problems of the current system, which is too slow and expensive.
It would also reduce the massive £2 billion that goes each year 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.
Stephen Haddrill, Director General of the ABI, said:
“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. We are all paying more for our insurance than we need to as a result of the system’s legal costs. And the focus on compensation gets in the way of people getting rehabilitation care.”
“The Government’s Compensation Bill is a positive first step on the road to reform. But much wider reform is urgently needed to ensure we have a compensation system that cares about the people it is set up to help. Reform will enable insurers to provide a better service to policyholders and claimants.“
The ABI proposes:
A new compensation process for all personal injury claims under £25,000 that means claimants can seek compensation without having to go through a long and costly legal process:
- an easy-to-use claim form will enable people to submit their claim without the need for legal advice;
- a faster timetable would give insurers only three months to accept or reject a claim;
- a new public scale of damages will set out compensation payments for specified injuries.
Measures to improve the availability and quality of rehabilitation:
In 2004, 28 million working days were lost to illness; 7 million to injury. This costs employers up to £13 billion a year. The faster people get care, the faster they get better. To ensure claimants and employees receive the care they need quickly to help them recover and get back to work, the ABI proposes:
- 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;
- a new code of best practice to improve responses to accidents and ill health in the workplace.