Insurers and Policyholders Should Benefit from Tightening of Whiplash Rules

Whiplash claims have been a substantial cause of the phenomenal increase in the frequency and value of claims in personal injury litigation. Figures provided by the Association of British Insurers demonstrate that the number of dishonest whiplash claims increased by 34 per cent in 2013, with a value of £811 million.

However, there is another side to the story. Lack of objective clinical signs has facilitated a ground for many claims that are extremely hard to disprove. This has paved the way for PI firms and other parts of the claims industry to transform the value of such claims into a commodity. However, significant changes are afoot to try and stem the flow of dishonest and exaggerated claims to reduce the cost to the industry and policyholders.

The Whiplash Reform Programme

In order to target the growth of “crash-for-cash” fraud whiplash claims, the Government has proposed a new system, known as “Whiplash Reform Programme” aiming to tackle speculative claims and ensure that those who have suffered a genuine neck injury get compensation. Subsequently, the Ministry of Justice has produced a consultation on the use of independent medical panels to combat the issue of questionable medical evidence and expert accreditation.

One of the main features of the programme is that an IT interface will be created placing an obligation of claimant lawyers to conduct research on the potential claimant’s history. The interface system will facilitate the obtaining of data from insurance companies with regard to the number of personal injury claims made by the claimant within the previous five years.

This obligation will also accompany the negative duty of the ban on claimant lawyers to make cash offers to potential claimants to make claims. These obligations should better enable representatives to make a proper assessment before sending the Claim Notification Form to the defendant’s insurer.

Improving the Quality of Medical Evidence

Another effort of the whiplash reform programme is to enhance the quality of medical evidence by removing links between those who commission the medical reports and the medical experts themselves. A self-funded accreditation scheme will be introduced where experts will be chosen from a pool composed of various professions and be allocated to claims.

The aim is to achieve this by creating a new independent medical online network, titled as “MedCo”. Consequently, it is hope that this will facilitate a process to detect factitious whiplash claims from claimants who have practiced what to say in advance of a medical examination.

Is there a Downside to the Whiplash Reform Programme?

Adverse responses of stakeholders to the proposed changes may arise in relation to issues of assessment of independency, data collection and cost of information search. One of the main concerns to be raised in respect to the consultation is the assessment of the independence of new medical report commissioning system and a new accreditation system. Establishment of an independent government system should include all the stakeholders in the creation process.

It is also evident that establishment of an accurate whiplash claim database will require extensive research and significant cost. On another point, processing of data may be subject to objections regarding the processing of data. There will be pressure for data processors to keep within legitimate grounds by not stretching to include information held in insurers’ private databases and not utilizing data in ways that have unjustified adverse effects on the individuals concerned.

For specialist advice regarding insurance litigation, the making or defending of personal injury claims, or for advice regarding whiplash claims in particular contact Peter Gourri today by email PGourri@rollingsons.co.uk or telephone 0207 611 4848.