Motor Insurers Challenged Over Bogus Whiplash Compensation Claims
A report by the House of Commons Transport Committee has criticised the role of car insurers in encouraging fraud and exaggeration in whiplash claims. It has also dismissed the suggestion of increasing the small claims track limit from £1,000 to £5,000 as it would, amongst other things, have an impact on the public’s access to justice. If allowed, the increase would mean thousands of motorists would not be able to seek legal assistance when pursuing a claim against a third party and their insurer. This could lead to genuine claimants not being able to claim the compensation they would rightly deserve.
Headed up by Lousie Ellman MP, the Committee summarised: 'Insurers must immediately get their house in order and end practices which encourage fraud and exaggeration. If not, the government must take steps to protect motorists.'
The enquiry has called on the government to explain how it plans to monitor the practices of UK insurers in reducing premiums for the average motorist, and expressed surprise at how insurers can, in some cases, make claimants an offer of compensation before a medical to establish the extent of their injuries has taken place. The enquiry also highlighted the role of insurers themselves in encouraging claims, with reports showing 7 in 10 whiplash claims are the result of the claimant being directly contacted by their own insurer or a third party connected to their insurer.
The enquiry did agree with proposals for an official accreditation scheme for medical professionals who assess whiplash injuries and provide evidence in support of claims. Changes were called for which will see medical experts supplied with the claimant's medical history and full accident circumstances, whilst encouraging claimant's to seek immediate medical assistance to substantiate their whiplash claim.
Further proposed suggestions made by the Committee include a reduction in the timeframe within which those involved in a non-fault accident can make a claim to 12 months. Currently, claimants have up to three years from the incident date to bring a claim for compensation. However, research suggests whiplash symptoms typically subside within 12 months, thereby making a 3 year timeframe unnecessary and increases the opportunity for fraud.
‘This is a common sense approach and we welcome the proposed changes,’ comments Jigsaw Law MD Christian Lindley. ‘For too long insurers have been able to rake in huge profits without passing these savings on to motorists. It’s refreshing to see insurers finally being challenged and their practices questioned.’