15 August 2008
Insurers have attacked the government for not cutting the growing costs of claims procedures for workplace injuries.
Concern has been mounting about the costs of transactions, compared with the eventual damages received, and about the length of time it takes for claims to be settled. The Association of British Insurers estimates that the average is three years.
The costs and the delays are placing a huge strain on public sector organisations, according to Alarm, the national forum for risk management in the public sector. It said personal injury claims had caused 'significant financial problems, diverting funds away from frontline services'.
But workplace cases are excluded from a new streamlined claims process announced by the Ministry of Justice last month, which will apply only to road traffic accident injuries. The decision, which the ABI described as 'illogical and bizarre', followed the ministry's consultation paper, < i>Case track limits and the claims process for personal injury claims.
Steve Thomas, a technical claims manager at the largest municipal insurer, Zurich, told Public Finance that small employer liability claims would be appropriate for such a streamlined scheme.
He said local authorities would have liked to see some control on the costs when settling claims by creating a more transparent, quicker system.
'It's not about trying to reduce damages for injured people. We've never supported that. The opportunity that has been missed here for local authorities is to see government intervention to control transaction claim costs.'
Stephen Haddrill, the ABI's director general, said trade union pressure should not be allowed to block change. Trade unions offer legal representation for members making a claim and Thomas described the current procedure as 'lucrative' for unions.
Alarm's submission to the consultation said the costs of claims had risen considerably and it broadly supported 'improvements that focus on a faster, more effective care and compensation system, which places the citizen at the forefront rather than third parties'.
PFaug2008
