Insurer Urges End to Small Claims

Personal injury claims of less than £1,000 should not be allowed, insurer Norwich Union has said.

The group wants bruises and non-disfiguring cuts to be excluded from compensation claims. Also, successful claimants winning less than £5,000 should not receive payment to cover legal costs, NU argues.

The moves are necessary to end the UK's "have a go" compensation culture and put an end to "frivolous" claims, the UK's biggest insurer said.

High legal costs

Norwich Union said that such claims were clogging up the compensation system and leading to legal fees accounting for 40% of all payouts.

"Claims management companies and solicitors have exploited the public's expectations in terms of what is compensatable and the amounts that might be achieved", said Dominic Clayden, director of technical claims.

"The inevitable consequences have been an increase in frivolous and vexatious claims, and an explosion in claimant's costs. The latter now represents 40% of all payouts."

The insurer made a series of proposals for reform of the UK's compensation culture, including:

However, a report by market analyst Datamonitor, to be published on Friday, will describe the UK's compensation culture as a 'myth'.

"The level of media coverage that surrounds personal injuries claims has created a myth about the rise in numbers and there certainly is a degree of sensationalism about it. But the underlying trend is that claims numbers are falling", said David Stephenson, Datamonitor analyst.

source: BBC News (Last Updated: Wednesday, 8 December, 2004)

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