Call for Control over Whiplash Claims

MPs have called for motorists to face more resilient medical tests to prove that they have suffered whiplash injuries as the result of an accident. The House of Commons transport select committee believes that this will reduce fraudulent claims, as diagnoses of injuries like this are subjective and can be used in “cash for crash” frauds or by no win, no fee lawyers.

The committee’s report says that the increase in personal injury claims has been the main reason for the jump in insurance costs – and most of the claims have been for whiplash. In more detail, personal injury claims from road accidents have doubled in ten years, while lawyers are making money off the surge in whiplash compensation. Whiplash has accounted for 70% of all the personal injury cases, and insurance premiums jumped 16.4% last year because of it.

Between 2000 and 2005, the average number of road injury claims was 395,735, and this rose to 790,000 last year. However, the number of road accident casualties has declined 33% between 2000 and 2010 from 301,529 to 208,648. This report corresponds with research conducted by LV= car insurance, which found that as many 60% of GPs reported a jump in patients trying to make fake claims for road injuries during the last two years.

Transport select committee chairman Louise Ellman says that whiplash claims are costly for insurers to challenge, as the type of injury involves an often subjective diagnosis. The committee recommends that the bar be raised in relation to being awarded compensation for whiplash cases. If the amount of whiplash claims doesn’t substantially decline as a result, there could be a good case to consider primary legislation that requires objective evidence for whiplash or for the injury having a big effect on the claimant’s life. Claims management firms, solicitors and insurers have driven up the cost of motor insurance premiums by urging people in road accidents to claim for car hire, personal injury and other legal costs.

Ellman says that legislation through Parliament will ban referral fees paid to solicitors, but it isn’t enough. Although the committee strongly supports access to justice, motorists shouldn’t be pressured by cold callers into taking legal action. The car insurance industry has to scrap practices that hike premiums when car accident claims are dealt with – like passing the details of the motorists onto lawyers, “credit hire” firms that arrange for replacement courtesy vehicles and repairs, and garages – she added.

The legal and insurance industries have both tried to blame the other for the increase in charges. The committee is urging the government to impose a cross-departmental ministerial committee to look into cutting the cost of motor insurance.