Civil Liability Bill [Lords]

Debate between Richard Bacon and Ruth Cadbury

2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons
Tuesday 4th September 2018 Commons Chamber

[Mr Richard Bacon (South Norfolk) (Con)]

It is a pleasure to take part in this debate and to follow the hon. Member for Cardiff Central (Jo Stevens). She mentioned that she has a history of involvement in this area. I would like to state at the outset that it is important to recognise that there are many personal injury lawyers who do a good job. Over the years, I have had quite a lot to do with personal injury lawyers in my capacity as a constituency MP, as well as in relation to a fatality involving my own family. I am happy to state that there are very, very good people out there doing the work of personal injury lawyers. As in perhaps every professional domain there are good, there are bad and there are the indifferent—and there are snakes. I do not think we should let this debate pass without recording that there are some very good people out there doing important work in the area of personal injury litigation.

It is also important to recognise—we have not heard anything from the Opposition on this—that there has been a significant rise in the compensation culture. I do not think that personal injury litigation lawyers—at least, not all of them—are tools of Satan. I have met one or two who have come close to that description, but listening to the Opposition one might get the idea that all insurance companies are tools of Satan. In fact, they are nothing of the kind. They are an enormously important and worldwide British success story. They manage huge amounts of funds through premium income, which pay many people’s pensions, including the pensions of many people represented by Opposition Members as well as by the rest of this House. A bit of balance on the nature of the problems facing insurance companies and the measures they have taken to tackle them would have been in order. I am afraid we heard nothing along those lines.

I strongly support the Bill. If I have one criticism it is that it is very overdue. I had a meeting with the head of fraud at Aviva—known to old fashioned people as Norwich Union—which is a big employer in East Anglia and of my constituents. In 2006, it set up the Insurance Fraud Bureau because it was so concerned about the scale of what are called induced car crashes—“crash for cash” was the popular phrase. On 16 January 2007, I held a debate in Westminster Hall on this very subject. In preparation for this debate, I glanced at it to see what I had said and to remind myself of some of the facts. Norwich Union’s 2005 report “Shedding Light on Hidden Crime” pointed out that the scale of fraud was growing at a very high rate—I won’t say it was exponential in case there are any mathematicians here to correct me—and that the proceeds from induced car accidents were routinely being used to fund other forms of organised crime, including drugs, people trafficking, benefits and credit card fraud, and money laundering.

The report estimated that between 1999 and the publication of the report in 2005 there had been 22,605 staged or induced car accidents. It broke them down city by city. At the top was Blackburn, with 1,710 staged accidents between 1999 and 2005. That was perhaps the reason that Jack Straw, who many of us remember fondly in this House and who was the MP for Blackburn, took a great interest in induced car crashes and fraudulent claims for whiplash injury. It took six or seven years to generate 22,605 induced accidents. Eleven years ago, the Insurance Fraud Bureau estimated that the rate of growth would mean a further 20,000 induced car crashes in the next 18 months. We heard the Secretary of State say that there are now 70,000 fraudulent claims for whiplash every year, so it has grown much, much more since this phenomenon became more publicly discussed 10 or 12 years ago. Just as it was then, it continues to be a direct threat to public safety.

[Ruth Cadbury]

Will the hon. Gentleman give way?

[Mr Bacon]

I will not, because I know there is a time limit and other Members wish to speak. I hope the hon. Lady will forgive me.

The Bill is very welcome. We need to be clear that the insurance companies have done a great deal and want to do more to try to tackle this problem. They said at the time that one of their main concerns was the rise in the cost of premiums for honest motorists. That continues to be a major concern. The fundamental problem, which I do not think I really heard the Opposition address but which the Government certainly did, is that road traffic accidents as a whole have been going down but personal injury claims have been going up. There is obviously something fundamentally wrong, and I am glad that the Bill is beginning to address it.

I shall comment in passing, in the Minister’s hearing, on two other issues that the Secretary of State referred to and which I strongly welcome. One is excluding vulnerable road users, such as cyclists—a welcome move. By the way, on what the hon. Member for Cardiff Central said, I should say that I support stronger moves against claims management companies. I had a phone call from one last week, talking about my accident on 26 January last year, of which of course I had no knowledge whatever. I am up for telling them where to go and for an argument with them at times—as many of us would be, probably—but my concern is that they prey on the vulnerable and deceive people who are not necessarily as robust as most of us in this House would be in such circumstances.

The second issue is about the proposal for a longer period of implementation for the IT system, which was a very welcome announcement from the Secretary of State. I sat on the Public Accounts Committee for 16 years and heard more stories about failed IT systems than about any other subject. The biggest red flag in relation to the putative or prospective failure of an IT system was the compression of the testing timetable. I am glad that the Government have recognised that.

Let us be clear: reform is needed. The Bill makes a proper link between whiplash claims and medical evidence, and that is long overdue. It provides a fixed tariff, which is fair and reasonable in the circumstances, given what has happened in recent years. There will be the possibility of an uplift and there will be flexibility. The tariff is perhaps unfortunate, but I think it necessary. Given what the Secretary of State said as a Treasury Minister about the independence of the Lord Chancellor, I do not have any fears on that score, as Opposition Members appear to.

I hope the Bill will go some way towards addressing my biggest concern: young people in rural areas who need a car to get to work. I represent a very large rural constituency of more than 300 square miles. Twenty or 30 years ago, car insurance premiums were higher for younger people, but they were not a “thing”—they were not so high that it became almost impossible for young people to get on the road. They were not more expensive than the car itself. That is no longer the case. The cost is hugely prohibitive and a direct result of the rise in the compensation culture, which has led to the penalising of honest motorists and which this Government are prepared to do something about. I strongly support the Bill.