UK Government announces new whiplash claims reform
A consultation has been announced following the publication of proposed changes to govern whiplash claims
New proposed regulations for whiplash insurance claims could help save the average motorist up to £40 per year on their insurance premiums, as the Government looks to crackdown on the “rampant compensation culture” which has been increasing in recent years, despite falling auto collision numbers.
The UK Government has had its eye on fraudulent whiplash claims for a few years now. In 2012, new measures were introduced to tackle the issue, including the limiting of “no win, no fee” legal proceedings and the banning of referral fees under the Legal Aid, Sentencing and Punishment of Offenders Act 2012.
These regulations proved successful and whiplash claims dropped by 19% following their implementation. However, insurance providers were adamant that more needed to be done to further reduce fraudulent claims, which cost the insurance industry £1 billion every year.
According to official figures, whiplash insurance claims have increased by up to 50% in the last 10 years, despite the number of reported road collisions dropping within this time period.
The Ministry of Justice has now announced a new consultation period for a new set of proposed whiplash claims reforms for England and Wales.
The consultation report has been published for the perusal of all and has been welcomed by the insurance industry which has promised to pass on all savings to British motorists.
The major reform would see the amount people who can claim for a whiplash injury significantly reduced from the current average of £1,850 to a national maximum of £425. Claimants would receive a pay-out only on production of a medical report from a MedCo-accredited professional.
Other proposed reforms include:
1. The introduction of a tariff system for injuries more serious than whiplash.
2. No settlements without a medical report from an accredited medical professional.
3. Increasing the personal injury claims limit in small claims courts from £1,000 to £5,000. This will reduce legal costs for insurers.
Justice Secretary Elizabeth Truss commented: “For too long some have exploited a rampant compensation culture and seen whiplash claims as an easy payday, driving up costs for millions of law-abiding motorists.”
She added: “These reforms will crack down on minor, exaggerated and fraudulent claims. Insurers have promised to put the cash saved back in the pocket of the country’s drivers.”
The consultation period will close on January 6, 2017. Any changes that get the go ahead after the consultation period must first be approved by a parliamentary act before they can be implemented in England and Wales.
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