MoJ altered the way payouts are calculated earlier this week leaving insurers seething
A leading law firm partner has come under fire after he publicly celebrated the Ministry of Justice’s (MoJ) decision to adjust personal injury rates, effectively handing successful claimants more cash.
Peter Todd — who is a partner at Hodge Jones & Allen, a London outfit which handles a substantial amount of personal injury work — sent a tweet to his managing partner, Vidisha Joshi, that read: “Is it too early to open the Moet?”. Responding to his celebratory tweet, personal injury specialist Joshi replied: “It’s midday somewhere in the world.”
The Twitter exchange, which was first spotted by an eagle-eyed journalist at the Mail Online, has now been deleted. Todd has since explained that he was simply “expressing his delight” at the news that seriously injured claimants will now receive the compensation they deserve.
Earlier this week Lord Chancellor Liz Truss thrilled personal injury lawyers across the country after adjusting the formula, known as the discount rate, that calculates how much insurers need to pay upfront to successful claimants. The move, which has been brought about due to low interest rates, is likely to leave insurance firms coughing up more cash.
Putting champagne-popping tweets to one side, 12 King’s Bench Walk barrister David Green stressed that the changes were about “compensation for victims of serious injuries” and not “lawyers’ fees”:
Things new #discountrate isn't about:
* lawyers' fees
Things it IS about:
* compensation for victims of serious injuries
— David Green (@itsdavegreen) March 1, 2017
Elsewhere Ben Handy, a personal injury specialist at St John’s Chambers, reminded his followers that lawyers “only want claimants to be properly compensated… Nothing more nor less.”
Claimant lawyers only want claimants to be properly compensated for the true measure of their losses. Nothing more nor less. #discountrate
— Ben Handy (@handybenhandy) March 1, 2017
But as you can probably imagine the adjustment has not gone down well with insurance bosses. With many of the big providers noting a dip in their share prices shortly after Truss’ announcement, the Association of British Insurers (ABI) warned that 36 million individuals and businesses will see a hike in their premiums.
Branding the Lord Chancellor’s decision “crazy”, Huw Evans, director-general of the ABI, said:
Claim costs will soar, making it inevitable that there will be an increase in motor and liability premiums for millions of drivers and businesses across the UK. To make such a significant change to the rate using a broken formula is reckless in the extreme.
Responding to the backlash, Chancellor Philip Hammond, stepping in to help Truss, met with insurance bosses on Tuesday. Having discussed the changes during an emergency meeting, Hammond — in a joint statement with insurers — said:
The government will progress urgently with a consultation on the framework for setting future rates, and bring forward any necessary legislation at an early stage.
If given the go-ahead, Truss’ new formula is due to kick in on 20 March. But don’t hold your breath.
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