Small claims limit action to be included in fraud report

Topics: Government & politics

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  • Caroline dinenage

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.

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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.’

Readers' comments (36)

  • Clearly protecting insurers' profit margins is of greater concern to this government than the rights of injured people.

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  • If the lunatic fringe get their way then my career which has largely been spent helping innocent and injured accident victims is at an end. What we will be left with I am unsure but I suspect it will mean victims get compensation at a level which is determined by an unqualified administration assistant employed by the at fault insurer.

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  • Having people attend A&E / HP walk in centers for whiplash is going to what exactly to the pressures on the NHS?

    The ban on paying for work was avoided before it was in force, Medco makes no effective difference and the number of claims is, as far as I understand it is not increasing faster than the number of vehicle miles driven PA, in fact it is in decline.

    The fixed costs regime has stopped the abuses (and by goodness there were abuses) of claiming £20k costs for a simple RTC that settled well before trial.

    In fact on almsot every measure there is already an inequality of arms between the insurers and the claimants.

    Perhaps this is where The Law Society should step in and warn the government of the jobs that would go in insurance, the claimant and defendant branch of the profession and all the related jobs in the Courts and so on.

    If you raise the SCT level to £5k you will, apropos Bolt, remove all the checks and balances and where then will you shelter from the fraudulent claimant?

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  • These proposals are like an abi wet dream

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  • If all of the current changes have made no difference, can we please reverse them?

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  • Insurance company mouthpieces. Grab a coffee and read - it's like mass hysteria:

    http://www.theyworkforyou.com/whall/?id=2015-11-18a.191.1&s=speaker%3A24790#g214.0

    I note they're still trotting out the There isn't too much money in the system, there are too many fraudsters and the fraudsters have been fed by insurer practices. The costs per genuine claim are tiny.

    They're right on two things though - string up everyone engaged with nuisance calls and with PI fraud.

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  • This was all dealt with by Louise Ellman last year before the Transport Select Committee. What was the point in Medco et al as well if the limit increases?
    This task force has got nothing to do with tackling fraud and it will be an absolute farce if the small claims limit is increased- how does leaving claimants in the hands of cmcs running hundreds of thousands of claims with no cost risk before the courts reduce fraud?!

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  • Does anyone know who is on this taskforce?

    A cross section of the Claimant and Defence side of things surely?

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  • I'm not suggesting that Karl McCartney is biased in any way or has been influenced at all by the ABI but here is a written question he asked in Parliament 2 weeks ago:-

    "To ask the Secretary of State for Justice, what assessment he has made of the quality of the evidence presented by the Association of British Insurers on the continuing increases to motor insurance premiums being a result of fraudulent personal injury claims; and if he will make a statement." and the response........"The Government is concerned about the incidence of fraudulent personal injury claims and the costs that they cause. The Insurance Fraud Taskforce is considering the evidence from a range of stakeholders, including the ABI, as part of its remit to make recommendations to tackle insurance fraud more generally."

    I'd be more than happy to have an open and honest debate about the practices in the personal injury field but when you get MP's spouting claptrap fed to them by the ABI it appears pointless.

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  • Maybe we should appeal to the government's pockets rather than their morals (they clearly couldn't care less about access to justice etc.).

    Have the government actually thought about the financial consequences of what is being proposed? If 90% of all claimant firms go under there will also be a huge reduction in size of the big Defendants - indeed we're already seeking that with some of hte big names - consequently the governments tax take will be significantly reduce. I know I for one would cease paying tax as I'd be on the dole. Also the IPT on ATE premiums should not be ignored - the government has a nice earner there.

    On top of the above the PI sector effectively subsidies the court system as the bulk of matters settle before trial but we still have to pay astronomical issue fees. Good luck to the rest of you civil litigators funding the system once you've got rid of us.

    I just hope the kickbacks from the ABI are worth it.

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