My Lords, I declare my interests as set out in the register, particularly as a partner in the global legal firm DAC Beachcroft LLP and as chair of the British Insurance Brokers’ Association.
I return to matters I have raised previously. The context for the further concerns about the regulatory framework for claims farmers lies in the Government’s plans for whiplash reform, as outlined in the Queen’s Speech. The aim of that reform package is to crack down on,
“minor, exaggerated and fraudulent road traffic accident related soft tissue injury claims”.
That quote is from my noble and learned friend Lord Keen of Elie in his foreword to the Government’s consultation paper nearly a year ago.
Noble Lords expressed their dismay in Committee at the rich harvest of unsolicited and unwanted nuisance calls and texts, which Members of this House and millions of our fellow citizens continue to receive as I speak. I spoke previously about the need for every loophole to be closed and for a commitment that where there is a claim there is regulation.
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The first two of my amendments seek to close two loopholes: first, by extending the regulation of claims farmers to include those responsible for offering replacement vehicles on so-called credit hire; and, secondly, to those arranging medical reports. In reality, these two beasts of the field are involved in the claims process merely for what they can get out of it. While credit hire companies and medical reporting organisations both provide a service, they do so in an unregulated environment and, in particular, with no control on how much they can charge for their services. It cannot be right or fair that the reporting organisation should receive more remuneration for arranging the provision of a medical report than the doctor who is examining the claimant and then giving his or her professional opinion.
I am afraid that claimants for whiplash are treated as little more than a commodity—an entry ticket for commercial interests to gain access either to the damages they can recover or to the costs available to their lawyers. While I know that the Ministry of Justice’s plans for whiplash reform will go a long way to address that last point, I would welcome any commitments my noble friend the Minister is able to give on what can be done about these regulatory gaps.
My final amendment seeks to require the FCA to impose a cap on the fees claims farmers can charge in personal injury claims. There are real concerns that the Government’s plans will create an environment in which claims farmers offer claim-handling services to the public directly and are not too scrupulous about how much they charge. Of course, the Minister will say that the problem has not materialised yet. In a sense that is correct for we shall not know for certain that consumers are suffering until the whiplash reforms have been introduced, probably at the same time that the measures in Part 2 take effect. We can, however, confidently expect from all precedent that the opportunity to exploit consumers will not be passed up. Opponents of the proposed whiplash reforms will criticise anything that leaves claimants open to any exploitation not strictly controlled by the regulator.
It is far better in my experience to lock the figurative stable door while the horses are still in situ. I beg to move.