12:25 22 March 2013
Is it any wonder the UK has been labelled the whiplash capital of Europewhen 1,500 people are said to claim for whiplash injury following a car accident every single day?
Proposals issued this week by the Association of British Insurers (ABI) aim to bring down these claim numbers by weeding out fraudulent whiplash claims through ensuring that anyone claiming this injury undergoes an examination by an accredited medical expert.
But the Transport Committee is today (Friday) calling for evidence that proposals like these will actually work and will reduce the number and costs of whiplash claims.
According to the ABI, reported whiplash has risen by almost a quarter in the last four years, even though the number of road accidents has fallen. It's thought that 70% of road accident personal injury claims are for whiplash in the UK, compared to 47% in Germany, 32% in Spain and just 3% in France.
Fraudsters have seized upon whiplash as a source of potential rich pickings because the condition is impossible to detect or disprove using x-rays and other medical techniques. This means it is easy to exaggerate levels of suffering from whiplash or to invent the injury entirely.
But the ABI points out that whiplash claims cost £2billion a year and add an extra £90 a year to the average motor insurance premium. It argues that, given that a proportion of these claims are fraudulent, honest drivers are being forced to pay the price.
However, the Transport Committee is now asking to see written evidence proving these extra costs are accurate, and if they are, what proportion of this additional cost is due to "exaggerated, misrepresented or fabricated" claims. It also wants to see evidence that proposals to challenge fraudulent or exaggerated claims are likely to reduce motor insurance premiums and, if so, to what extent.
Under the ABI's proposals, anyone claiming for whiplash would be examined by a medical expert who would have to show their financial independence from claimant solicitors. In other words, they would not be able to profit from referring the patient to a solicitor to make a claim.
Medical experts would also have to take the circumstances of the collision into account, rather than just the claimant's reported symptoms, and they would be required to undergo training in the latest diagnosis techniques.
Anyone found to be partly exaggerating a claim or making it up entirely would automatically have their claim dismissed.
The ABI is also calling for a "prescribed level of damage awards" for whiplash which would be set independently. It also wants to raise the limit on cases that can be pursued through the small claims court from £1,000 to £5,000 for all road traffic personal injury claims.
This would reduce the costs insurers have to pay when challenging claims. At the moment, it can be cheaper to simply settle a claim rather than dispute it.
James Dalton, the ABI's assistant director of motor and liability, said: "Our proposals will ensure better medical assessment of whiplash claims, offer a quick, simple way of paying genuine claims, provide certainty for claimants and compensators, and deter fraud that ends up being paid for through higher motor insurance premiums."
Is this the answer?
There is widespread agreement that the problem of fraudulent whiplash claims needs to be tackled, the Association of Personal Injury Lawyers (APIL) is concerned the ABI proposals will prevent people with real injuries from making a claim.
Karl Tonks, APIL president, said: "The vast majority of claimants have genuine injuries and these proposals will put off the genuine claimants and do nothing to stop the fraudsters. The real issue should be about getting the right level of compensation for genuinely injured people.
"We can all agree that there should be proper medical evidence in every case, but some insurers are still making offers of compensation without any medical evidence at all, and this needs to stop."
These are concerns shared by the Transport Committee. Louise Ellman MP, chair of the Committee, said: "Whiplash claims undoubtedly play a part in driving up the cost of motor insurance, but access to justice for injured people must be preserved. We want to hear the arguments on these points and will publish a report in the summer about the best way forward on this issue."
The Transport Committee's decision to look into whiplash in more detail has been welcomed by the Motor Accident Solicitors Society (MASS), which commented: "For too long now it has been characterised as a simple question of the so-called 'compensation culture'.
The fact is that it is a complex issue with many characteristics contributing to the undoubted problem of fraudulent whiplash claims. But it requires some sophisticated and holistic solutions rather than simple headlines.
"We look forward to the Committee unearthing all the facts, the motivations of the involved players and assessing the Government's proposals and will be actively participating in the inquiry."
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