Government reveals proposals to kill the whiplash claim “epidemic" that increases costs for law-abiding motorists.
Whiplash claims rise 50% in 10 years
The Ministry of Justice has proposed scrapping, or capping, the compensation motorists receive for minor whiplash injuries to cut the number of suspect claims and the typical cost of insurance by £40 per-annum. The Ministry explained that such claims are 50% higher than a decade ago despite a fall in the number of accidents.
The rise has been fuelled by a “predatory claims industry that encourages minor, exaggerated and fraudulent claims” that increase the cost of insurance for everyone, the Ministry said. It added that its proposals – as revealed via a consultation paper that closes January 6th 2017 – could save motorists £1 billion per-annum.
The proposed cap limits compensation to £425 whereas the current average is £1,850. Other proposed measures include:
- “introducing a transparent tariff system of compensation payments for claims with more significant injuries;
- raising the limit for cases in the small claims court for all personal injury claims from £1,000 to £5,000;
- banning offers to settle claims without medical evidence (and) all claims would need a report from a MedCo accredited medical expert before any pay out.”
Compensation culture existed for too long
Justice Secretary and Conservative Party Member for South West Norfolk, Elizabeth Truss, said: “For too long some have exploited a rampant compensation culture and seen whiplash claims an easy payday, driving up costs for millions of law-abiding motorists.” There is a whiplash claim every 60 seconds, the Ministry concluded.
Ms Truss added: “These reforms will crack down on minor, exaggerated and fraudulent claims. Insurers have promised to put the cash saved back in the pockets of the country’s drivers.”
She confirmed there is no plan to penalise those in genuine need, however. "If you need physiotherapy or there are issues with you going back to work there will be compensation", Ms Truss confirmed.
Insurance industry welcomes proposals
The Association of British Insurers welcomed the proposals. James Dalton, Director of General Insurance Policy, said: ”Introducing a range of measures, such as limiting the compensation payable for these injuries, will help create a more honest system that doesn't reward those who want to exploit it.”
He continued: “If implemented, these reforms will ease some of the pressure recent increases in insurance premium tax and repair costs are already putting on premiums.”
“We will need to study proposals carefully and look forward to participating in this consultation and the debate about how we can ensure fair compensation for genuine claimants and a fairer deal for motorists”, Mr Dalton concluded.