Could the ‘Cost of Living Crisis’ Spark a Boom in Personal Injury Claims?

People across the UK are feeling the pinch of rising prices and stagnant wages. And with economic forecasts also looking gloomy, it is worth considering the effects this may have on personal injury claims.

It’s a sector which may not instantly spring to mind in connection with costs of living, but it has an important place in modern society.

A bit of background first. The personal injury sector has taken something of a beating at the hands of recent government legislation. In 2021, the much-delayed reforms to whiplash claims came into force. They were largely targeted towards road traffic accidents (the largest source of personal injury claims), reducing compensation awards and greatly restricting access to legal representation in many cases.

But amidst the current cost of living crisis, are personal injury claims set for a resurgence?

Greater incentives

Perhaps the most obvious effect from the financial climate is the greater motivation of injured people to claim. Those who might never have thought about claiming before could now embrace it as an opportunity to avoid further hardship.

And it is important to remember that personal injury compensation is intended to right a wrong. A genuine claimant will have suffered harm in the form of injuries, effects on their life, and financial losses. Amongst other things, they have to prove the extent of this harm – and that also determines any amount of compensation awarded. In other words, it is redress, not profit.

Of course, the key word above is ‘genuine’. The added incentive for bona fide claims is also present for fraudulent ones. And insurance companies have already reported an increase in bogus claims, which has naturally led to them passing on the associated costs to consumers through increased premiums. 

Safety standards at risk

Other, more-subtle, effects of the cost of living crisis can also be anticipated.

Halfords has raised concerns that the cost of living crisis is impacting road safety. The autocentre firm said that economic pressures were leading more people to buy older cars, and cut back on the costs of maintaining them. Poorly maintained vehicles represent serious hazards – both for those who travel in them and the road-users around them. An increase in road traffic accidents could easily follow.

And it’s not difficult to imagine similar effects rippling out across all areas of the personal injury sector. Take accidents at work, for example. All employers have a legal duty to maintain safe conditions and systems of work in the workplace. With the financial downturn, employers may feel forced into reducing costs, and the costs of upholding safety standards might not escape.

Reductions in staff numbers also hold inherent safety risks. Lone workers are at higher risk of being harmed in a workplace accident, and are far more vulnerable to an assault at work.

Second jobs and the dangers of fatigue

Research suggests that 5.2 million workers have been forced to take on additional jobs in response to the cost of living crisis. The resulting fatigue from these increased working hours could have drastic and extensive consequences for instances of personal injury.

According to the Health and Safety Executive, fatigue has ‘been implicated in 20% of accidents on major roads and is said to cost the UK £115 – £240 million per year in terms of work accidents alone.’

A perfect storm?

The factors we’ve considered above cover increased claim motivation, reduced safety standards, and heightened risks.  And it is the combination of these factors which most strongly signifies an increase in personal injury claims should be expected.

About Truth Legal

Truth Legal is an ethically-driven firm of solicitors with a history of successful personal injury claims. We also provide legal services covering immigration law, employment law, clinical negligence, and family law.

To find out more about the firm and the work we do, visit our website.