A leading figure in the insurance industry has said that damages and costs for whiplash injuries should be linked to the time taken to lodge a claim – penalising those who leave it until the last moment. 

Andy Watson, chief executive of Ageas UK, said a sliding scale of awards would incentivise claimants to start their cases earlier and ensure insurers can properly analyse evidence of injuries.

Speaking at the Association of British Insurers conference today, Watson said recent initiatives such as the MedCo panel of independent doctors are welcome, but fail to address major issues affecting the industry.

He argued that the current three-year period led to claims management companies pursuing ‘aggressive’ direct marketing to catch claimants before their window for making a claim closes. 

‘The spurious reporting of whiplash claims two or three years after the accident makes it very difficult for us as insurers to disprove it and do anything other than pay,’ he said.

Calls from the insurance industry for a shorter limitation period are nothing new, but the idea of a sliding scale - in effect rewarding those who claim earlier - has rarely been discussed.

Watson said there remains ‘too much money sloshing around in the PI process’ and that if government is serious about reducing insurance premiums then limitation periods - as well as recoverable costs and general damages - need to be put under the microscope.

‘At the moment [government measures] don’t get to the core of the problem,’ he said. ‘It is politically difficult and not without hurdles, but there should be a sliding scale of recoverable costs depending on when the claim is notified.’

Susan Brown, chairman of the Motor Accident Solicitors Society, told the conference that reducing the limitation period was ‘throwing the baby out with the bathwater’.

‘Fiddling with limitation would drive the feeding frenzy earlier in the process and not reduce the problem.’

Richard Mason, deputy director for civil justice at the Ministry of Justice, said ministers are prepared to listen to any suggestion that addresses problems in the market.