Small claims limit action to be included in fraud report
Topics: Government & politics
Limitation periods for whiplash claims and potential changes to the small claims limit will be included in a report on tackling insurance fraud due out next month, the government revealed today.
The insurance fraud taskforce, set up almost a year ago by former justice secretary Chris Grayling, is expected to give its recommendations for reducing bogus claims by the end of the year.
Justice minister Caroline Dinenage (pictured) today confirmed proposals on the small claims limit - which the government opted not to increase from £1,000 to £5,000 two years ago - will be included in the report.
Dinenage also hinted that the three-year limitation period for making a whiplash claim may be re-examined.
‘This issue is going to be considered by the insurance fraud taskforce which will report shortly,’ she told a Westminster Hall debate.
‘The government has not ruled out further reforms to this market. The government takes this subject very very seriously and remains committed to continuing the reform process to the benefit of all.’
The Ministry of Justice had been pressed by Lincoln MP Karl McCartney to commit to a £5,000 small claims limit and 12-month threshold for making a whiplash claim.
His Conservative colleague Chris Philp, MP for Croydon South, went further and called for the government to require people to seek medical help within a week of an accident to be eligible to make a claim.
McCartney said reforms such as the ban on referral fees, a panel of independent whiplash experts and clampdowns on rogue claims management companies have had ‘little effect’ and claims numbers have reached a ‘record high’.
Dinenage later stated that whiplash claims have fallen by 70,000 since 2011.
McCartney said the government should remove damages compensation for road traffic accidents and instead require insurers to pay only rehabilitation costs.
He added: ‘It is still too easy to make a claim and the rewards have created and maintained the effects we see. There is too much cash in the PI system.’
Labour's shadow justice minister Andy Slaughter said increasing the small claims limit to £5,000 would effectively remove claimant lawyers from the process but do little to combat fraud.
‘Insurance companies try to get people a quick and early settlement without taking medical advice,’ he said. ‘The insurer is effectly settling a claim which may be fraudulent and the growth of third-party capture is something we should worry about.’