Whiplash claims by drivers involved in car crashes have had a negative impact on the insurance industry. The insurance industry believes the problem is so bad it is costing drivers an extra £90 on their insurance premiums.
From October 2014, the Government is changing the rules regarding medical assessment fees, which are paid to obtain an assessment regarding the extent of whiplash injuries. The fees can run as high as £700, which offers an incentive for medical professionals to exaggerate injuries.
Under the new proposals, the fee will be fixed at £180 to encourage doctors to make a more honest assessment of a driver’s injuries. The Government argues that the move will save drivers money.
Chris Grayling, the Justice Secretary, told the BBC “Honest drivers have been bearing the cost of a system that is open to abuse and it is time for a change.”
Eliminating the Compensation Culture
The reduction in assessment fees is not the only measure being taken by Government to tackle whiplash claim rates. Some changes have already been introduced.
In 2013, changes to no win, no fee agreements meant that the success fee, the additional fee on top of regular payments, could now be no higher than 25% of total damages and is no longer payable by the losing party. This was designed to discourage people from entering into such agreement simply to deprive the opponents of as much money as possible.
More changes are expected later this year which will force claimant personal injury firms to rethink the way in which they deal with personal injury claims. Adverts offering inducements, such as free technology or holidays for a successful claim will be made illegal, as well as so called “welcome payments” where by a firm pays the claimant an amount of money simply for instructing them.
The new laws are expected to come into force by the end of 2014. The Government believes that as a result people will think more carefully about claiming for whiplash injuries if the financial rewards are reduced and the risks increased.
Whiplash Changes Backed by Industry
The changes to whiplash claims have the support of the motoring industry, who says that the whiplash compensation culture is costing billions each year.
In fact, some insurers have suggested going further. In March 2014, the Association of British Insurers suggested scrapping compensation for low value whiplash claims altogether and instead paying only for treatment. However, claimant groups are opposed to this, arguing that many injuries are genuine and should be compensated.
Cutting the cost of the whiplash compensation culture, which is burdened by bogus complaints and exaggerated injuries, is a key priority for insurers and the Government. However, an appropriate balance must be struck between eliminating bogus claims but ensuring legitimate ones are dealt with appropriately.
For specialist advice regarding personal injury compensation or other insurance claims contact Peter Gourri today by email PGourri@rollingsons.co.uk or telephone 0207 611 4848.