Britain’s ‘compensation culture’ is in the firing line today as the Ministry of Justice announces a crackdown on whiplash claims through a new Bill.
The introduction of the Civil Liability Bill will change the way personal injury discount rates are calculated in a bid to bring certainty and transparency to the system – meaning savings for the NHS.
It will set fixed amounts of compensation for whiplash claims and ban the practice of seeking or offering to settle the cases without medical evidence.
Justice Secretary David Gauke said: “The number of whiplash claims has been too high for too long, and is symptomatic of a wider compensation culture.
“We are putting this right through this important legislation, ensuring whiplash claims are no longer an easy payday and that money can be put back in the pockets of millions of law-abiding motorists.”
Personal injury claims as a result of a road traffic accident are 50% higher than 10 years ago, despite the fall in the number of reported accidents.
The government says the rise has been fuelled by the predatory parts of the claims industry that encourage minor, exaggerated and fraudulent claims, driving up the costs of insurance premiums for honest drivers.
The changes will provide a more balanced approach to compensation that fully compensates victims of catastrophic accidents, including the most vulnerable, while addressing issues around overpayment which could have a knock-on effect on public services with large personal injury liabilities – particularly the NHS.
ABI Director General, Huw Evans said: “If passed, these proposals would be great news for motorists. People and businesses are paying more for their motor insurance than ever before and we need changes to the law to tackle some of the root causes. Soft tissue injury claims have been rising year on year since 2014 as cold calling claims firms have thrived, driving up the cost of insurance.
“This Bill will ensure people in England and Wales receive fair compensation while reducing excess costs in the system. In a competitive market such cost benefits get passed through to customers, as they did after previous reforms in 2012 when average motor premiums fell by £50 over the next two years.”
This latest news is off the back of earlier reforms including the forthcoming ban on cold calling which, the ABI says, drives increases in insurance costs.
“Cold calling claims cowboys are driving it - there are more than 750 personal injury claims management companies in the UK, turning over nearly £200 million a year,” the ABI said.
“Since April 2017 the Claims Management Regulator has cancelled 69 licences in the sector, reflecting some of the poor practice in the sector.”
The government is further trying to tackle our compensation culture by clamping down on fake holiday sickness claims.
Figures from the Association of British Travel Agents show holiday sickness claims rose by 434% between 2013 and 2016, with the majority of claims lodged by British tourists.
Find out more about how fake holiday claims can affect your travel insurance.
07 Jul 2016
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