Personal injury claimants are ‘layering’ their claims to fraudulently rinse the maximum level of damages from single incidents, defendant lawyers have suggested.

The Forum of Insurance Lawyers (FOIL) said this practice had already become more common following the creation of the Official Injury Claim (OIC) portal for whiplash cases. In evidence to the House of Commons justice committee inquiry, FOIL added that the problem has worsened since the claimant victory in Rabot, which allowed compensation claims for different heads of damages.

Defendant lawyers say there is an extra incentive to load up claims with non-whiplash injuries as they are not subject to a fixed tariff. The result, they say, has been that the claims industry has continued to thrive.

‘Claims for treatment for psychological injury have significantly increased since the whiplash reforms, with warning signs that the increase is bringing with it exaggeration and fraud,’ FOIL said. ‘Overall, there are concerns that the reforms have not overcome the "squeezed balloon" phenomenon: the concept that when claims and costs are limited in one area, activity switches to another to enable the claims sector to maintain claims volumes and costs.’

OIC data for October to December 2022 indicated that 28.9% of claims are tariff only while 67.8% are mixed claims. FOIL said there has been a ‘very significant increase’ in claims which, alongside whiplash, include a non-tariff claim for injuries including tinnitus, headaches, hand/wrist injuries and knee/leg injuries.

‘Prior to the reforms these claims were a lot less common and, if they were claimed, were included within the whiplash claim as an exacerbating factor, rather than a separate claim, and received modest compensation,’ the submission said. It added that the Rabot decision and the delay in cases proceeding through the OIC were both likely to increase the cost of claims.

On the fact that most claimants continue to be represented, FOIL said many solicitors were able to fund claims though legal expenses insurance.

The organisation also contested the idea that litigants in person might be disadvantaged. ‘The evidence from the OIC data has shown these concerns to be totally unfounded,’ added FOIL. ‘Liability is more likely to be admitted on claims by LIPs, LIPs on average receive a higher non-tariff settlement, a similar tariff award and, on May 2022 data, their claims are settled more quickly.’

 

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