Claimant lawyers will be forced to check the claims history of potential clients before starting cases, the government proposed today in its latest move against whiplash compensation fraud. 

The Ministry of Justice said the mandatory system will prevent a whiplash claim from being started under the pre-action protocol unless a search has taken place.

The Gazette understands that the insurance industry will provide basic data on how many claims clients have made.

A new ‘IT interface’ will enable claimant representatives to obtain data on the number of whiplash claims made by potential clients within the previous five years.

The proposal – which appears in an MoJ consultation on whiplash opening today – sees a potential solution to the long-running issue of data sharing between insurers and claimant firms.

The consultation, which closes on 1 October, also proposes the creation of a new independent IT hub, the working title for which is MedCo, which will allocate medical experts to claims.

The system will have built-in filters to ensure the medical expert or reporting organisation does not have a ‘direct financial link’ with the commissioning party. This will not block a law firm, for example, from owning medical reporting organisations, but will mean that any such firm has to source work from elsewhere.

In addition to commissioning reports, MedCo will also operate a mandatory accreditation scheme for experts.

The government has said it will does not have funding to cover the start-up costs of MedCo, so the Association of British Insurers has agreed to build and fund the IT system. The scheme will then be self-funding from accreditation fees.

The government has already announced a new set of fixed fees for medical reports coming into force in October: fees for GPs and physiotherapists are set at £180, with £420 for a report from a consultant orthopaedic surgeon. The cost of obtaining medical records is set to be limited to £80 in total.

Justice Minister Lord Faulks said: ’Honest drivers should not continue to bear the cost of a system that has been open to abuse and it is time for change.  Our reforms will create an improved, robust system for medical evidence - so genuine whiplash claims can still be settled but fraud is driven out of the market.  We have already seen a fall in premiums paid by motorists – we are working to ensure this continues.’

Craig Budsworth, chair of the Motor Accident Solicitors Society, said the government has shifted the balance of justice in favour of defendants and the benefits must now be felt by the public. ‘We have yet to see all the savings being passed on by insurers from the changes so far and these changes will again save them money,’ he said. ‘The government must demand that consumers see the full benefits of these reforms in reduced motor insurance premiums.’