Insurance companies have mostly made windfall bonuses from the 1979 Act. Why isn’t the polluter being made to pay more to the sufferers?
DWP has worked closely with the insurance industry on this issue. At present insurers can reduce the amounts they pay out in civil damages to take into account any 1979 Act payments the customer has received. This results in a windfall for the insurer. However, the new scheme has been designed to close this loop hole, so that 1979 Act payments will be recovered from any subsequent civil damages. The effect of this is that the insurer is now required to pay the full value of any compensation due. They will continue to pay the reduced amount to the claimant but they will be required to repay to DWP any lump sums paid under the 1979 Act. The claimant will be no worse off, as the 1979 Act payment and the lower rate of civil damages combined will amount to the full value of the civil award.
