Government sets out measures to tackle compensation culture, reduce legal costs and cut red tape.

The Prime Minister met with the insurance industry, consumer and business groups yesterday (14 February 2012) to discuss the rising premiums that many drivers, families, consumers and businesses are facing, and the action that the Government is taking to help bring these down. This discussion included issues raised through the Red Tape Challenge Health & Safety theme on levels of compliance.

There was a commitment from the Prime Minister that the Government will take action to tackle the compensation culture, reduce legal costs and cut health and safety red tape. The insurance industry committed to pass savings made on to consumers.

The Government and insurance industry agreed to work together in future to make progress on this.

Measures agreed include:

to tackle the issue identified by the Red Tape Challenge of health and safety ‘myths’, insurers will provide short guidance to all clients at the point of purchasing insurance setting out clearly what SMEs need to do, and critically what they don’t need to do, to comply with health and safety law and get insurance cover, to ensure that businesses are not asked to go beyond what is actually required by law;

…industry commitment to pass savings onto customers resulting from a Government commitment to reduce the current £1,200 fee that lawyers can earn from small value personal injury claims;

…industry committment to adjust premiums to reflect any reductions in legal costs created through the Jackson reforms that will reform ‘no win, no fee’ and ban referral fees; and extending the road traffic accident claims process to cover employers liability and public liability;

…the Government and insurance industry committed to work together to identify effective ways to reduce the number and cost of whiplash claims. Options include improved medical evidence, technological breakthroughs, the threshold for claims or the speed of accidents. Progress on this will be made in the coming months;

…insurers committed to challenge more vexatious health and safety civil claims in order to tackle the compensation culture;
the Government and insurance industry agreed to work together to look at what more can be done regarding young drivers’ risk and safety. This includes the wider use of telematics or ‘smartbox’ technology. This monitors driving behaviour, giving young drivers the chance of affordable car insurance by adopting safer driving.

Relevant Links

Read the No10 Press Notice here.

See the Health & Safety Red Tape Challenge spotlight here.

Read the Red Tape Challenge Health & Safety Announcement here.

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