HMT and MoJ Meetings

Meeting with HM Treasury and the Ministry of Justice

Tuesday 9th February 2016

We thought you would appreciate an update on Tuesday’s meeting between A2J supporters Slater and Gordon and  HM Treasury and Ministry of Justice officials. This lasted an hour and a quarter and gave considerable insight.

Attending were  Mark Pragnell from Capital Economics, as well as Matthew Maxwell Scott, Cath Evans and Ken Fowlie of Slater + Gordon. The officials were from the MoJ in charge of the consultation, and from the insurance sector team at the Treasury (who are in charge of the policy implementation).

As officials they stressed that the government has stated its proposals and it is their job to implement them. However, they are clearly still at the early stages of political implementation and were reasonably receptive to ideas. They could not give a firm view on the likely timing of the consultation, let alone its content.

Concerns about the veracity of fraud data being used to make the case for reform were ventilated, and showed the likely extent of existing RTAs, the value of claims, their change over time, the root causes of higher premiums (namely, lower investment returns since the financial crisis) and the loose definitions, which the ABI encourages its members to use, to identify supposed fraud. It was made clear that the effects of LASPO currently remain unquantified, but are likely nevertheless, to be significant. The relevance to HM Treasury, of the size and importance of the personal injury sector in economic terms, both as a whole and regionally, was made abundantly clear to the officials .

The economic research was clearly set out as initial, draft and confidential.  Various anti-fraud proposals that came from the Slater and Gordon experience were given.

What was made clear to us was that the government is looking to tackle what might be termed the ‘compensation culture’ as well as ‘whiplash fraud’. The economic impact work is also of great significance, and more must be done to show the uneven effect that radical reforms could have in areas such as the North West, where the government’s ‘Northern Powerhouse’ is an important plank of its long-term political strategy.

Overall, it was a useful meeting in updating and understanding  the government’s position.

Post meeting commentary

We would be surprised if the consultation  came before Easter as impact assessments have yet to begin, and given the elections later this spring, the consultation could be published as late as the summer or even the autumn. In any event the timescales have not yet crystallised.

the  reference to ‘compensation culture’ as well as ‘whiplash fraud’ suggests that while we have a vital role in scotching myths about the extent of fraud (and its causes), as well as suggesting viable solutions to this issue, we need also to strongly raise public and parliamentary awareness about the full range of access to justice concerns, if we are to ensure these proposals are not enacted to the detriment of genuine victims.