Due to the increasing number of frauds committed in relation to whiplash claims, the Ministry of Justice has pursued a radical reform agenda. The impact of the reforms has been focused primarily on the soft tissue injuries that are caused by motor vehicle accidents. The changes will bring the need for fixed cost medical reports instead of the normal practice followed now where the insurer and the claimant firm can refer to any GP and the injured party need not go through any medical examination. The reforms have changed the rules so that practitioners providing medical reports are independent and cannot be incentivized by the claims process.
The major effects of whiplash reform
The major effect of this reform will be to reduce the costs of physiotherapy and cognitive behavioural therapy (CBT) that are unnecessarily carried out with the sole aim of increasing profits in the form of referral fees. Not only there have been cases of false invoices and absence of patients from treatment, but for every pound of compensation given to the patient the insurance companies are required to pay an additional amount of 77p. In this context it appears that the whiplash panel may be a crucial step in the fair assessment of injuries of victims.
Concerns about the whiplash reforms
There have been concerns raised about the reforms. One step in the reforms is the setting up of an independent medical reporting organization (MRO). The main issues that arise from the this are that there is still uncertainty as to the number of doctors that would be available in the list of doctors that will be enrolled in the panel, the qualification that is required in order for them to be enrolled and the also the working of the panel is still not clear.
These are not the end of the concerns. There have been fears regarding the lack of differentiation in doctors. This may be a loss to the doctors as there is no mechanism for the allocation of specific work to them. This question mark regarding the lack of specialization of the doctors may be taken care of once the minimum qualification for the doctors is clarified.
Protests regarding the reforms have also emphasized the risk that they will take away the general right to compensation for injured parties.
Benefits to insurers and their customers
Balanced against the concerns raised about the reforms are the benefits they are designed to bring. The insurance industry should no longer need to pay for the unnecessary claims that are being made by the victims and will no longer be treated as the mode of payment of other expenses in the name of care and rehabilitation. The reforms will prevent insurance companies being used as cash cows for injuries that do not justify such payment. Over time, this should in turn reduce the effect that false or exaggerated claims have on premiums.
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