Lawyers today welcomed a parliamentary report on whiplash that ‘finally recognised the realities’ of the claims system.
MPs on the Commons transport select committee called for the government to drop proposals to raise the small-claims limit and for greater medical evidence to be required to support a claim.
Law Society chief executive Desmond Hudson said the committee had reached the ‘inescapable conclusion’ that current practice by insurance companies encourages fraudulent or exaggerated claims.
‘It's time that insurance companies stopped blaming everyone else, be it government, lawyers or their own customers, and instead concentrated on getting their own house in order,’ he said.
‘Every whiplash claim, like any other claim, should be properly considered. Most are genuine; whiplash can cause life-changing injuries and accident victims deserve proper compensation. Those claims which are fraudulent or exaggerated need to be weeded out, and a change in the working practices of insurers would help achieve that, as would greater transparency in sharing data.’
Deborah Evans, chief executive of the Association of Personal Injury Lawyers, said the government must now ‘listen to reason’ over its plans to raise the threshold to £5,000. ‘To send whiplash claims to the small claims court will punish genuinely injured people by leaving them unrepresented,’ said Evans.
‘It will create an opportunity for claims management companies to take on cases in exchange for a share of the victim’s compensation, as we’ve seen with PPI claims, leading to a boom in cold calling and texting which could ultimately encourage more claims.’
Evans said she was pleased the committee had recognised claims numbers had fallen and recommended that insurers should now share data to combat fraud.
She added: ‘The transport select committee has acknowledged that the government has, so far, largely been influenced by the insurance industry in its plans to tackle high motor premiums, and called for insurers to get their house in order. I couldn’t agree more.’
Craig Budsworth, chair of the Motor Accident Solicitors Society, said the report was a ‘considered and thoughtful response’ to the problems of fraudulent claims that all sides want to tackle. ‘There needs to be more trust between all sides that information exchanged will be used for the right purpose and we would welcome the government playing a role in ensuring that this happens.’
The Association of British Insurers said the case in favour of fundamental change to the current system was still strong. James Dalton, the association’s head of motor insurance, said: ‘Following recent reforms to the civil litigation system, insurers committed to pass on cost savings to motorists. We have delivered on that commitment and average premiums have reduced by 10% in the last year.
‘The committee’s report has kicked into the long grass making the tough calls for reform that are needed to help insurers combat the whiplash epidemic and deliver further premium reductions for hard-pressed motorist.’
The Forum of Insurance Lawyers (FOIL) seemed to break ranks with the ABI response and praised the report as a ‘valuable, commonsense contribution to the whiplash debate’.
Nigel Teasdale, motor sector representative who gave evidence to the committee, said: ‘The Ministry of Justice holds the 'whip hand' here. FOIL hopes that it embraces the practical, sensible measures proposed by the TSC which will involve all sides of the industry in making adjustment to curb fraudulent claims, while dealing fairly with those suffering genuine injury.’